Royal Bank of Canada and its subsidiary, City National Bank, are responsible for significant pollution and discrimination in California; Rise Economy calls for urgent action after the banks cancel a meeting to discuss.

Oct. 22, 2024 – With the release of a new report today, Rise Economy, a leading economic, housing and racial justice nonprofit organization, joins environmental and community groups across North America in calling on the Royal Bank of Canada (RBC) and its subsidiary, City National Bank (CNB), to phase out financing for fossil fuels, address the environmental harm caused by their investments and end discriminatory lending practices. 

The report, titled: “The Climate Costs of the Banking Industry: Exposing the Role of the Royal Bank of Canada in California’s Climate Crisis,” peels back the layers of RBC’s fossil fuel financing practices and examines its negative impact on California communities. 

Over the last several years, RBC has emerged as a significant financier of fossil fuels, consistently ranking among the worst offenders globally. Research finds that RBC’s financing ratio of low-carbon to fossil-fuel projects is alarmingly low, with only 40 cents invested in green energy for every dollar spent on fossil fuels compared to the needed 4-to-1 ratio to meet global climate goals. Additionally, RBC and its subsidiaries, have financed companies responsible for significant pollution in California, including oil and gas operations that disproportionately affect Black, Indigenous, and People of Color (BIPOC) neighborhoods. These operations have led to adverse health outcomes for residents, including increased risks of asthma, cancer and other illnesses due to exposure to pollutants from oil wells and refineries.

RBC’s financing has heavily contributed to pollution and health risks in California. Key findings from the report include:

• Nearly $68 billion in financing to eight of California’s largest greenhouse gas emitters since the Paris Accords.
• Significant funding to Phillips 66, Marathon Petroleum Corp, and California Resources Corporation, major players in the state’s oil and gas sector.
• 64% of California Resources Corporation’s wells are in BIPOC neighborhoods, with new wells predominantly in these communities, leading to severe pollution and health disparities.

“As we witness the devastating effects of climate change, it is clear that BIPOC and low-income communities in California bear the greatest burden,” said Rise Economy’s Chief Executive Officer Paulina Gonzalez-Brito. “These neighborhoods are disproportionately affected by the harmful impacts of fossil fuel financing and the presence of oil wells. Our research highlights the urgent need for financial institutions like the Royal Bank of Canada to acknowledge and address their role in perpetuating this environmental injustice.”

The report reveals that from 2018 to 2022, California experienced climate-related losses ranging from $30 billion to $90 billion. With ongoing challenges such as wildfires, extreme heat, flooding, and droughts, these numbers will likely keep rising without strict policies in place.

“Ending financing for fossil fuels and investing in sustainable, equitable solutions must be a priority for California to protect climate change-vulnerable communities that have already been harmed by systemic inequities and underinvestment in their neighborhoods,” said Rise Economy Chief of Legal and Strategy Kevin Stein. “That’s why we’re calling on RBC and CNB to commit to a Community Benefits Agreement that phases out fossil fuel financing, supports the transition to cleaner energy, addresses the environmental harm caused by fossil fuel projects and ends discriminatory banking practices, including redlining and bluelining.”

In addition to environmental concerns, the report highlights CNB’s history of discriminatory practices, particularly redlining, where loans are denied or limited based on the racial or ethnic composition of neighborhoods. City National Bank was the subject of the largest redlining settlement with the United States Department of Justice, for bank redlining practices that harmed Los Angeles County from 2017 to at least 2020. CNB has shown significant disparities in mortgage lending, especially in BIPOC communities in California, performing worse than many of its peers in these areas, according to a Rise Economy analysis.

“We identified RBC as a major player in the financing of fossil fuel projects, which is the largest contributor to global climate change,” said Jamie Buell, lead researcher on the report. “The report underscores the need for RBC and CNB to prioritize environmental and social justice to help create healthier, more equitable communities in California.”

The release comes on the heels of an 11th-hour cancelation of a meeting with Rise Economy alliance organizations and representatives of RBC and CNB.

“Rise Economy members came to Compton to express our concerns, but Royal Bank of Canada and City National Bank did not show and were not willing to listen,” said Chancela Al-Mansour, Executive Director of Housing Rights Center and chair of the Rise Economy Board of Directors. “We are determined to be heard until RBC and CNB change their ways, stop harming our communities, and become part of the solution to the redlining and climate change challenges that plague BIPOC neighborhoods in our state.” 

Read the full report

About Rise Economy
Rise Economy, formerly the California Reinvestment Coalition (CRC), is a member-led alliance focused on creating a more equitable society where Black, Indigenous, and People of Color have access to resources and opportunities to build generational wealth. As the largest statewide community reinvestment alliance in the country, Rise Economy advocates for policies and practices that promote racial and economic justice and that address the root causes of inequality, redlining, and systemic racism.

Media Contact:
Brian M. Maxey, bmaxey@rise-economy.org
510-813-7552

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