The CEO of Canada’s biggest bank has been touting the need for the country to ramp up oil and gas production and build new pipelines, and the Corporate Mapping Project is asking why.
In a recent speech to the Edmonton Chamber of Commerce, Royal Bank of Canada (RBC) CEO David McKay “called on the federal government to help get fossil fuel resources to market by approving new bitumen pipelines and other infrastructure,” the CMP reported last week. “Doing so, he argued, is essential to the transition to a ‘cleaner economy.’”
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RBC “has a big stake in Canada getting this right,” he added, describing the institution as “Canada’s leading energy bank for conventional, non-conventional, and renewable resources.”
As a lender, RBC devotes 4.6% of its investments—or C$7 billion—to oil and gas, the CMP reports. Those transactions account for 52% of the bank’s risky or delinquent loans, “so it’s not surprising that big banks like RBC would be anxious for a return to a booming Canadian oil and gas sector.”
But the bank’s vulnerability becomes much more clear when you look at where its direct investment has been going: through its various funds, it owns 8% of TransCanada Corporation, 7.9% of Enbridge Inc., 7.6% of Pembina Pipeline Corporation, 6.4% of Gibson Energy Inc., and holds an interest in 12 out of Canada’s 15 biggest fossil companies.
The Mapping Project says those investments may be “just the tip of the iceberg” after factoring in international investments in companies like ExxonMobil, Total SA, and Halliburton.
“Clearly, RBC is not an arms-length observer of climate policy in Canada,” write researchers Shannon Daub and Bill Carroll. “When its CEO says ‘we cannot get to the economy of the future without using all our resources, smartly and sustainably’—we should ask the obvious question: How can Canada possibly use all its resources and be sustainable?”
But McKay clearly has the ear of at least important federal decision-maker: Environment and Climate Minister Catherine McKenna retweeted his ‘economy of the future’ comment the day after she announced approval of a highly controversial, $36-billion liquefied natural gas project in British Columbia.
Daub and Carroll cast McKay’s speech as “a study in the new climate denialism—the idea that we can take effective action on climate change while at the same time ramping up oil and gas production and building new pipelines. But first, consider the source.”
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