Ms. Jennifer Livingstone reports

RBC UNVEILS RETAIL BRANCH RETROFIT PLAN TO HELP REDUCE CARBON EMISSIONS

While you may not see it, your local Royal Bank of Canada (RBC) bank branch is working toward being powered differently in the coming years. A multimillion-dollar plan to retrofit RBC's Canadian 1,200-branch network aims to cut 10,000 tonnes of on-site carbon emissions from its operational footprint.

The bank will embark on a major initiative that will accelerate the retrofit of its extensive branch network in Canada, investing $35-million over three years in the first phase through the installation of energy-efficient, low-carbon heating and cooling systems such as heat pumps, which will replace aging heating, ventilation and air conditioning (HVAC) equipment. RBC will first begin to convert the 62 per cent of branches where it is responsible for HVAC, aiming to accelerate this work to be completed by 2035. The bank will continue to work on electrification with landlord partners in the remaining locations. The bulk of the retrofit program is planned to begin in spring 2025.

Approximately 40 per cent of the bank's operational carbon emissions stem from its retail locations across Canada. By updating this essential equipment, RBC estimates total branch emissions can be reduced by 70 per cent.

This initiative will help accelerate the operational goals outlined in the bank's climate report 2023 by reducing RBC's own global GHG (greenhouse gas) emissions and increasing sourcing of electricity from renewable sources. In 2023, the bank's continuing shift to renewable energy sources led to a 67-per-cent reduction in its emissions for global operations since 2018, RBC's baseline year. Additionally, the bank now sources 100 per cent of its total global electricity consumption from renewable sources.

"Progress is needed to reduce emissions that come from the buildings we work in, which largely stem from their heating source," says Jennifer Livingstone, vice president, enterprise climate strategy, at RBC. "Which is why we have made this ambitious commitment to our clients, colleagues and other stakeholders, including our investors. It is one of our largest opportunities for emissions reduction within RBC's operations."

Buildings are Canada's third-largest source of greenhouse gases, contributing about 14 per cent of total emissions annually. If the country is to meet its net-zero ambitions, RBC estimates 65 million tonnes of carbon emissions must be saved from this source by 2050. Emissions per square metre have fallen in recent years. However, residential buildings have made more progress than commercial since 2000, at about 25 per cent compared with 7 per cent.

"Achieving Canada's climate targets requires the building sector to prioritize energy efficiency and eliminate its reliance on combustion for heating, cooling and hot water service for all new and existing buildings," said Thomas Mueller, president and chief executive officer of Canada Green Building Council.

"Industry commitments, such as RBC's to accelerate the electrification of their properties, is a positive first step in achieving wider decarbonization across building portfolios. Verification of performance through trusted third party certifications is also critical in measuring and reporting on progress."

Space heating is estimated to generate 85 per cent of carbon emissions in commercial buildings, and existing technologies are available to make meaningful reductions. RBC owns or, through lease agreements, has the responsibility for controlling 62 per cent of the HVAC units across its retail branches. The remaining 38 per cent are fully controlled by its landlords.

Jon Douglas, director of global sustainability at RBC, says the bank has embarked upon an outreach program to understand its landlords' climate targets and to look for ways where both parties can work together in achieving mutually desirable goals. With 22 million square feet of real estate, most of it leased from 500 landlords, Mr. Douglas anticipates engagement will help drive more climate action in the real estate sector. He went on to say the bank is already in collaboration with a landlord of a flagship property to achieve net-zero greenhouse gas emissions at the office site by 2040.

RBC is also a founding partner of the Climate Smart Buildings Alliance, which was established in 2023 to help reduce emissions in Canada's buildings sector. Key areas of focus for the Climate Smart Buildings Alliance include increasing the use of low-carbon and zero-carbon building materials; reducing combustion in buildings and supporting a clean grid; and reducing emissions through retrofits and net-zero new builds.

About Royal Bank of Canada

RBC is a global financial institution with a purpose-driven, principle-led approach to delivering leading performance. The bank's success comes from the more than 98,000 employees who leverage their imaginations and insights to bring the bank's vision, values and strategy to life so RBC can help its clients thrive and communities prosper. As Canada's biggest bank and one of the largest in the world, based on market capitalization, RBC has a diversified business model with a focus on innovation and providing exceptional experiences to its ore than 18 million clients in Canada, the United States and 27 other countries.