Offerings include risk-sharing solution with EDC, will support corporate banking clients in advancing their sustainability goals while delivering on RBC's commitment to provide $500 billion in sustainable finance by 2025
TORONTO, Nov. 15, 2022 /CNW/ - Royal Bank of Canada (RBC) today announced the introduction of a new solution to its suite of sustainable finance products aimed at supporting businesses in realizing their climate objectives. Launched today, the RBC-EDC Sustainable Financing solution will join RBC's existing Sustainability-Linked Loans and Green Loans products to offer a range of options to address the needs of Corporate Client Group clients. It represents another step toward meeting the bank's commitment to provide $500 billion in sustainable financing by 2025.
"Climate change is one of the most pressing issues of our time. At RBC, we are committed to helping businesses across sectors and regions accelerate their climate goals, prepare for an orderly transition to a net-zero future, and support their social objectives," says Andrea McLane, Senior Vice-President and Head, Corporate Client Group, RBC. "We are proud to provide these finance products to support a more sustainable future."
RBC-EDC Sustainable Financing
Through a risk-sharing, pilot solution with Export Development Canada (EDC), RBC will provide up to US$1 billion in financing over the next three years to support Canadian businesses in their transition towards greener business operations.
RBC's collaboration with EDC will open up funding to companies in a variety of sectors, with financing available for eligible green activities, as defined in RBC's Sustainable Finance Framework. Eligible activities are those that address key environmental objectives, including but not limited to climate change mitigation, climate change adaptation, biodiversity and ecosystem protection, sustainable use and protection of water and marine resources, pollution prevention and control, and the circular economy.
EDC will guarantee 50 per cent of an RBC term loan – up to a maximum of US$60 million per obligor, for a period of up to seven years – providing more capacity for RBC to support its clients' low carbon transition.
"EDC's goal with sustainable financing is to enable real progress towards a more sustainable future," said Justine Hendricks, Chief Corporate Sustainability Officer at Export Development Canada. "Working with financial institutions like RBC gives Canadian businesses access to the support they need to transition to more environmentally-responsible practices while also promoting sustainable trade in Canada. As part of EDC's commitment to achieve net-zero by 2050, we are helping Canadian companies by providing them with the tools they need to be part of that journey."
In addition to the RBC-EDC Sustainable Financing Guarantee, the bank also offers the following sustainable finance products:
Sustainability-Linked Loans
This solution incentivizes and supports businesses in working towards their climate or social objectives by tying the terms of the finance agreement to their achievement of pre-determined sustainability targets.
Companies will set ambitious sustainability performance targets that relate to the borrower's core sustainability and business strategy. Companies will be required to track and report progress towards these targets, as measured by predefined Key Performance Indicators, with adjustments in the loan's interest rate made upon achievement of these targets.
Green Loans
RBC's Green Loans offer financing to businesses for a broad range of green projects that are intended to achieve environmental benefits, including but not limited to initiatives that help clients reduce their emissions, address natural resources depletion, loss of biodiversity, and air, water and soil pollution.
RBC Sustainable Finance Framework
Criteria for transactions classified as eligible towards RBC's commitment to provide $500 billion in sustainable financing by 2025 are contained in the bank's Sustainable Finance Framework. Published in October 2022, the Framework outlines RBC's approach and methodology for sustainable finance.
Corporate banking clients interested in learning more about RBC's sustainable financing solutions should contact their RBC Relationship Manager to assess the solutions that work best for their business needs, and for more information about the eligibility criteria and application process.
For more information about our strategy to support our clients in sectors across the economy in a socially inclusive transition to net-zero, and the risks and opportunities we face, visit rbc.com/climate.
About RBC
Royal Bank of Canada is a global financial institution with a purpose-driven, principles-led approach to delivering leading performance. Our success comes from the 92,000+ employees who leverage their imaginations and insights to bring our vision, values and strategy to life so we can help our clients thrive and communities prosper. As Canada's biggest bank and one of the largest in the world, based on market capitalization, we have a diversified business model with a focus on innovation and providing exceptional experiences to our 17 million clients in Canada, the U.S. and 27 other countries. Learn more at rbc.com.
We are proud to support a broad range of community initiatives through donations, community investments and employee volunteer activities. See how at rbc.com/community-social-impact.
Caution Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of certain securities laws, including the "safe harbour" provisions of the United States Private Securities Litigation Reform Act of 1995 and any applicable Canadian securities legislation. Forward-looking statements in this press release include, but are not limited to, statements relating to Royal Bank of Canada's (we, us or our) climate-related objectives, vision, goals, metrics and targets, including our support for the transition to a net-zero economy, our commitments to and role in helping our clients transition to net-zero and accelerate their climate goals and objectives, our commitment to supporting our clients' sustainability goals and social objectives, our ambition to play a role in financing the climate transition to a net-zero economy, certain funding to clients, with or without collaboration with third parties, being considered eligible for classification as sustainable finance as defined in our Sustainable Finance Framework, and our commitment to providing $500 billion in sustainable finance by 2025 and measuring our progress against this commitment. The forward-looking information contained in this press release is presented for the purpose of assisting our stakeholders, including holders of our securities and financial analysts, in understanding the ways we intend to address climate-related governance, strategy, risks, opportunities, and metrics and targets, and may not be appropriate for other purposes. Forward-looking statements are typically identified by words such as "believe", "expect", "expectation", "aim", "foresee", "forecast", "anticipate", "predict", "intend", "estimate", "commit", "goal", "plan", "strive", "objective", "target" and "project" and similar expressions of future or conditional verbs such as "will", "may", "might", "should", "could" or "would".
By their very nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties, which give rise to the possibility that our predictions, forecasts, projections, expectations or conclusions will not prove to be accurate, that our assumptions may not be correct and that our objectives, vision, commitments, goals, targets and strategies to mitigate and adapt to climate-related risks and opportunities, and our objectives, including our net-zero commitment and sustainable finance commitment, will not be achieved and that our actual results may differ materially from such predictions, forecasts, projections, expectations or conclusions. Moreover, many of the assumptions, standards, metrics and measurements used in preparing this press release continue to evolve and are based on assumptions believed to be reasonable at the time of preparation, but should not be considered guarantees.
We caution readers not to place undue reliance on these statements as a number of risk factors could cause our actual results to differ materially from the expectations expressed in such forward-looking statements. These factors – many of which are beyond our control and the effects of which can be difficult to predict – include the need for more and better climate data and standardization of climate-related measurement methodologies, our ability to gather and verify data, our ability to successfully implement various initiatives throughout our enterprise under expected time frames, the risk that initiatives will not be completed within a specified period or at all or with the results or outcomes as originally expected or anticipated by us, difficulty in identifying transactions, products and services that meet the sustainable finance classification criteria, the risk that eligible transactions or related initiatives will not be completed within any specified period or at all or with the results or outcome as originally expected or anticipated by us, our ability to track transactions and report on them as performance against our commitment to provide $500 billion in sustainable finance by 2025, the compliance of various third parties with our policies and procedures and their commitment to us, the need for active and continuing participation and action of various stakeholders (including governmental and non-governmental organizations, other financial institutions, businesses and individuals), technological advancements, the evolution of consumer behaviour, varying decarbonization efforts across economies, the need for thoughtful climate policies around the world, the challenges of balancing emission reduction targets with an orderly, just and inclusive transition and geopolitical factors that impact global energy needs, the legal and regulatory environment, and regulatory compliance considerations (which could lead to us being subject to various legal and regulatory proceedings, the potential outcome of which could include regulatory restrictions, penalties and/or fines). Additional factors that could cause actual results to differ materially from the expectations in such forward-looking statements can be found in the Risk sections and Impact of COVID-19 pandemic section of our Annual Report for the year ended October 31, 2021 and the Risk management section of our Quarterly Report to Shareholders for the three- and nine-month periods ended July 31, 2022.
We caution that the foregoing list of risk factors is not exhaustive and other factors could also adversely affect our results. Except as required by law, none of RBC or its affiliates undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by us or on our behalf.
SOURCE RBC Royal Bank
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