On March 6, ESG Today reported that the Royal Bank of Canada (RBC) plans to introduce a medium-term climate-based objective to its mid-term incentive (MTI) and long-term incentive (LTI) programs for senior executives from 2023. This addition is part of RBC’s ongoing efforts to incorporate environmental, social, and governance-related (ESG) considerations into its executive compensation program and improve leadership accountability in advancing positive change. Prior to this new objective, RBC had already incorporated climate-related considerations into its executive compensation program. On the same day, RBC published its 2022 ESG Performance Report, 2022 Climate Report, and 2022 Public Accountability Statements (PAS), which outlined the bank’s strategies and progress in complying with ESG principles, managing climate-related risks and opportunities, and contributing to the Canadian economy and society.

The new climate-based objective aligns with RBC’s strategic priorities, as outlined in the RBC Climate Blueprints. It aims to facilitate USD500bn in sustainable financing to help clients transition to net zero, expand climate-related products and services, and support climate literacy through research and education. RBC recognizes that climate change is an increasingly important consideration for its shareholders and stakeholders, and expects the new climate modifier to provide an additional incentive for the CEO and Group Executives (GE) to accelerate progress on key priorities through innovation and collaborations with governments, businesses, and individuals to facilitate global progress towards net-zero targets.

Sources:

https://www.esgtoday.com/rbc-ties-incentive-comp-for-ceo-top-execs-to-climate-strategy/

https://finance.yahoo.com/news/rbc-publishes-2022-environmental-social-121600439.html

https://www.rbc.com/community-social-impact/_assets-custom/pdf/RBC-Climate-Report-2022.PDF