RBC Abandons $500B Sustainable Finance Goal Amid Greenwashing Law Scrutiny

Royal Bank of Canada (RBC), the country’s largest financial institution, has pulled the plug on its major sustainable finance commitment and is backing away from other climate-related disclosures. The decision follows recent changes to Canada’s Competition Act, which tighten rules around environmental claims and greenwashing.

RBC Cites Methodology Issues and Legal Risks

In its 2024 sustainability report, RBC revealed that it had retired its $500-billion sustainable financing target, citing flaws in its own methodology and the impact of newly strengthened anti-greenwashing rules. These rules, part of Bill C-59, require companies to back up environmental claims with internationally recognized standards — or face potential legal penalties.

The bank also decided not to release key climate metrics, including its energy supply ratio, a measure of how much it funds high- versus low-carbon energy. This comes despite having promised shareholders, such as the New York pension system, that it would disclose that ratio.

Critics Say the Move Lacks Transparency

Although RBC blames the Competition Act amendments, some legal experts argue that the law doesn’t prevent disclosure — it simply demands credible, verifiable claims.

Tanya Jemec, a lawyer with Ecojustice, said RBC’s refusal to disclose its energy financing ratio “suggests a lack of confidence” in its own data. She added that BloombergNEF’s methodology could have provided a framework for legitimate reporting — but it may also have exposed RBC’s poor performance relative to global banks.

Stand.earth’s climate finance director Richard Brooks called the decision “a step backwards,” arguing that it undermines climate progress in Canada. He urged Prime Minister Mark Carney to act decisively and replace voluntary climate reporting with mandatory regulations.

Broader Retreat From Climate Finance in Canada

RBC’s announcement is part of a wider pullback by Canada’s banking sector on climate action:

• Earlier in 2025, RBC and other big banks withdrew from the Net-Zero Banking Alliance, which was once spearheaded by Carney in his UN role.
• Canada’s provincial securities commissions also paused efforts to mandate climate-related disclosures, citing economic uncertainty.

RBC maintains that it remains committed to climate goals and is still funding low-carbon energy projects, including green buildings and renewable power. However, the bank now considers previous targets — including $35 billion in low-carbon energy financing by 2030 — as no longer valid.

The bank warned that external factors — such as cancelled EV incentives, geopolitical shifts, and underperforming technologies — have made its interim targets unrealistic.

Legal Experts Warn of a Dangerous Trend

While RBC says the new greenwashing laws limit what it can share, some legal experts caution this could become a loophole for corporations to avoid transparency.

Julien Beaulieu, a competition lawyer, said the intent of Bill C-59 was to improve accuracy, not silence reporting. “There is a risk of a dangerous trend,” he warned, “that companies begin using the law as cover to stop sharing sustainability data.”

With Prime Minister Carney now in office — a former UN climate envoy — many are watching to see whether his government will step in with stricter enforcement of climate disclosures.

Do you think Canada’s big banks should face stricter climate reporting laws, or should voluntary commitments remain the norm?

More…

• https://www.theglobeandmail.com/business/article-rbc-drops-sustainable-finance-targets-blaming-anti-greenwash-law
• https://halifax.citynews.ca/2025/04/29/rbc-scraps-sustainable-finance-commitment
• https://financialpost.com/pmn/rbc-scraps-sustainable-finance-commitment-holds-back-on-disclosures