Environmental activists are increasingly relying on shareholders to convince big banks to tackle climate change.
For example: Na’Moks, Hereditary Chief of the Wet’suwet’en Nation, will travel to Saskatoon at the Royal Bank of Canada (RBC) meeting to encourage shareholders to support a resolution on respecting Indigenous rights .
“Dave McKay is the CEO. He has to listen to the people who do business with him,” he says.
The resolution he is advocating is presented by the British Columbia General Employees Union with the support of the Union of BC Native Chiefs.
” [Les assemblées] are important tools for investors seeking to channel change, says Canadian Good Governance Coalition Executive Director Catherine McCall. They can then present important topics to management and the board of directors and explain to them why they are important for investors. »
A first climate-related resolution was presented by a Royal Bank shareholder in 2018. Five years later, five proposals are on the agenda for its next meeting. There are three at the Toronto Dominion Bank, two at the Scotiabank, one at the Bank of Montreal, one at the Canadian Imperial Bank and one at the National Bank of Canada.
Environmental activists are increasingly looking to banks as intermediaries in the fight against climate change.
“They invest everywhere, they lend money everywhere,” says Jennifer Story, associate director at the Shareholders’ Association for Research and Education (Share). They therefore have a phenomenal ability to accelerate change if they decide to put their weight in the balance. »
Share, on behalf of its institutional clients, will present a resolution at Scotiabank’s April 4 meeting asking management to “issue a report outlining its expectations for carbon neutral transition plans. of its customers who are major GHG emitters.
In a circular, the management of Scotia recommended the rejection of this proposal. “The additional information requested is overly onerous and burdensome and does not follow industry practice,” she said. She is also surprised by the proposal, “which was presented while a dialogue was in progress”.
Ms. Story points out that the decision to bring the subject to the shareholders’ meeting was taken because the discussions were stalling.
“The dialogue has been broken. We are disappointed with the lack of progress over the past year. We decided that was the best way to go. »
Those who present such resolutions are aware that they are not binding, but they allow them to launch a debate with other shareholders. It is a way of communicating and creating a dialogue on these issues.
“There is a ripple effect in the year following the assemblies. This is not a full stop,” said Matt Price, director of Investors for Paris Compliance, a group that is presenting a resolution to the Toronto-Dominion assembly asking the bank “to disclose a transition plan that outlines the how it intends to bring its financing activities closer to its sectoral emission reduction targets for 2030”.
These proposals also give major shareholders the choice to take a stand.
“The resolutions are meant to send a message to management,” says Stand’s Richard Brooks. earth. The group presents a resolution calling on Royal Bank to adopt a policy providing for a fixed-term phase-out of lending and underwriting activities for projects and companies engaged in new exploration, development and transportation of fossil fuels.
The message is getting stronger as it reaches the biggest shareholders, Brooks adds.
Unsurprisingly, the management of the Royal Bank recommends the rejection of this proposal. She says she “prefers to help her clients with their energy transition […] which requires collaboration and commitment on the part of all parties”.
“That’s why RBC’s goal to achieve carbon neutrality in our lending business by 2050 is about creating a balance between the needs of people and the planet. »
Na’Moks is not impressed with the defense presented by the Royal Bank.
“It bothers me to read in her circular that she is going to do this, that by 2050. Does she know the damage that will occur on the planet by 2050 if we continue in the same way? Changes need to start now. We’ve had decades to prepare and make sure we don’t experience this climate crisis. But only the money counted and we didn’t change anything. »