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Banks face rising shareholder pressure through climate resolutions as AGMs loom

Critics say banks’ climate action going too slow
Na’moks, a spokesman for the Wet’suwet’en hereditary chiefs, holds a press conference in Smithers, B.C., Tuesday, Jan.7, 2020, on the one-year anniversary of RCMP enforcement of an injunction granted to Coastal GasLink. THE CANADIAN PRESS/Amy Smart

It was only after his flight landed in Toronto last year that Wet’suwet’en hereditary chief Na’Moks learned that Royal Bank of Canada had cancelled its in-person annual general meeting with less than a day’s notice.

The bank cited COVID-19 as the reason it moved the event entirely online, but those assembled to protest the bank’s climate record were left wondering if there was more to it and Na’Moks says he was insulted that executives weren’t willing to face him.

Undeterred, he is trying again this year. Na’Moks will head to Saskatoon for the bank’s April 5 meeting, where he plans to share his concerns about its fossil fuel funding and encourage the assembled shareholders to support a resolution related to respecting Indigenous rights.

“Dave McKay, he’s the CEO, but he has to listen to the people that do business with him,” said Na’Moks.

The resolution he’s pushing, put forth by the B.C. General Employees’ Union with the support of the Union of British Columbia Indian Chiefs, is just one of many Canada’s big banks face as climate activists increasingly look to shareholder proposals to shift corporate policy.

“They’re a really important tool for investors to catalyze change,” said Catherine McCall, executive director of the Canadian Coalition for Good Governance, which represents the interests of institutional investors.

“They can introduce issues to management and the board that are important, and they can signal how important they are to investors.”

RBC faced its first climate-related shareholder proposal in 2018, while this year it has five going to a vote. There are also three resolutions at Toronto-Dominion Bank going to a vote, two at Bank of Nova Scotia, and one each at Bank of Montreal, Canadian Imperial Bank of Commerce and National Bank of Canada as activists increasingly focus on banks as key intermediaries in the climate fight.

“They’re invested everywhere, and they lend everywhere,” said Jennifer Story, associate director of climate advocacy at the Shareholder Association for Research & Education (Share).

“So they have a phenomenal ability to accelerate change on behalf of corporate issuers in Canada and elsewhere, if they choose to leverage it.”

Share, on behalf of its institutional clients, has put forward a resolution for Scotiabank’s April 4 AGM looking for more detail on how the bank will be assessing the transition plans of its high-emission clients.

Scotiabank said in its proxy circular response that the proposal was “overly onerous, prescriptive, and not aligned with industry practice,” and that it was surprised to see it filed as it was in ongoing engagement about it.

It was only after talks stalled that Share decided to elevate the issue with a shareholder proposal, said Story.

“In essence the dialogue broke down, and we were disappointed in the lack of progress over almost a year and decided that this was the best route to take.”

Those pushing resolutions emphasize that it’s not so much about a simple pass or fail on these votes (they are non-binding even if they pass), but more about allowing them to engage with other shareholders, a way to communicate and create dialogue around the issues.

“There are ripple effects that go on throughout the year after the dust has settled at the AGM, that’s not the end point,” said Matt Price, director of corporate engagement at Investors for Paris Compliance, which filed a resolution at TD pushing for more details on how it will achieve its 2030 financed emissions targets.

The proposals do also give the option for major shareholders to make a statement, with even small percentages of support representing billions of dollars of investments, said Richard Brooks at

“The resolutions are meant to send a message to management,” said Brooks, head of the group’s climate finance program, which submitted a proposal calling for RBC to set a deadline for when it will stop funding new fossil fuel developments.

The message is getting louder, he said, as bigger shareholders step into the fray.

The Public Sector Pension Investment Board, which has $231 billion in assets under management, said on March 22 that it would be using its voting power to promote corporate practices that address climate change, and that it’s ready to vote against directors when boards fail to prepare.

And this year RBC also faces a proposal about setting absolute emission reduction targets from the New York City Comptroller, which oversees the city’s US$242 billion portfolio of pension funds.

“Absent a concrete plan to reduce absolute emissions in the real world in the near term, any net zero-plan rings hollow,” said Comptroller Brad Lander in a statement announcing the proposal, while noting that BMO and numerous international banks have already set hard targets on emission reductions.

RBC said in its response, recommending shareholders vote against it, that while it recognizes the importance of reducing absolute emissions, only intensity-based ones are “appropriate at this point in the bank’s transition journey.”

As with its response to’s proposal, RBC went on to note the need to continue to engage with clients in high emitting sectors, rather than simply reducing emissions by cutting off their funding, as part of an orderly transition.

“This is why RBC’s goal to achieve net-zero in our lending by 2050 is intended to balance the needs of people and planet.”

For Na’Moks, the bank’s talk is little more than greenwashing.

“It really bothers me when you read their statements of ‘by 2050, we’ll do this’. You know how much damage is going to happen to this planet by 2050 if they continue the way they are?” he said.

“Things have to happen now. We’ve had decades to prepare, and make sure we’re not in the climate crisis we’re in, and it was all about money and they kept moving forward.”

He’ll be looking for allies within RBC investors for the resolution on how the bank assesses how well clients have implemented free, prior and informed consent of Indigenous peoples, as well as on climate action.

“Money talks; that’s the world right, that is their world,” said Na’Moks. “It will be the shareholders and those who do business with RBC that will make the difference. That’s how it operates. So they just need to listen.”

Companies in this story: (TSX:RY; TSX:TD; TSX:BNS; TSX:BMO)

Ian Bickis, The Canadian Press

READ ALSO: Protestors across Canada demonstrate against RBC’s fossil-fuel funding

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