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RBC announces new restrictions on financing coal, oil developments

A person walks by the Royal Bank of Canada building on Bay Street during the COVID-19 Pandemic in Toronto on Wednesday, May 27, 2020.
A person walks by the Royal Bank of Canada building on Bay Street during the COVID-19 Pandemic in Toronto on Wednesday, May 27, 2020. THE CANADIAN PRESS/Nathan Denette

Canada’s largest bank is putting new restrictions on lending to some fossil fuel developments.

In a policy released Friday, RBC says it won’t lend money to new coal-fired power generators, thermal coal mines or coal mines that require mountaintop removal.

“We are committed to finding ways to balance the transition to a low-carbon economy while supporting efforts to meet global energy needs and our energy clients,” said bank spokesman Andrew Block in an email.

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The policy will apply to new investments and not the bank’s current investment portfolio.

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The bank says it won’t lend to new clients that get more than 60 per cent of their revenue from thermal coal or coal-fired power generation. It will lend to new clients that get some revenue from those industries if they can show they’re moving away from coal or reducing their greenhouse gas emissions.

Financing Arctic oil exploration will have to be approved by a special committee and no financing will be provided to oil drilling in Alaska’s Arctic National Wildlife Refuge, “due to its particular ecological and social significance and vulnerability,” said Block.

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RBC is believed to be the first Canadian bank to join its international peers in backing away from the refuge.

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Environmental groups and First Nations praised the bank’s decision not to back drilling in the sensitive Alaska reserve.

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“Refusing to fund Arctic refuge drilling is the right ethical choice and a good business decision,” Chris Rider of the Canadian Parks and Wilderness Society said in an email.

“The pressure is now on the rest of Canada’s banks to step up and release their own policies.”

READ MORE: As Canadian oil firms blacklisted, Trudeau warns climate action is key to investments

Others have pointed out that RBC remains Canada’s top financer of oil, gas and coal.

In a study released earlier this year, the Rainforest Action Network placed RBC first among Canadian banks financing fossil fuels and fifth globally. The study says RBC has provided more than $140 billion in all types of financing to fossil fuel industries since 2016.