TORONTO and SASKATOON | April 5, 2023 – More than 44% of shareholders voted in favour of a racial equity proposal at Royal Bank of Canada (RBC). Filed by responsible investing organization SHARE on behalf of the Atkinson Foundation and the B.C. General Employees’ Union (BCGEU), the proposal asked RBC to commission a third-party racial equity audit covering its employment and business practices.
A racial equity audit is an independent analysis of a company’s business practices, intended to identify and remediate potential and actual disparate outcomes for Indigenous people and communities of colour. The audit evaluates the merits of a company’s efforts, policies and practices to tackle systemic racism in light of its racial justice commitment. Over the past two years, racial equity audit proposals have been commonly filed in the U.S., however, this is the first ever proposal of this type voted at a Canadian bank.
“The Atkinson Foundation is dedicated to social and economic justice. We believe financial institutions must play a positive role in helping people build inter-generational wealth and grow their businesses,” said Colette Murphy, Chief Executive Officer at the Atkinson Foundation.
“Historically and persistently, banks have exacerbated the racial wealth gap, through overt policies, and unconscious bias. Royal Bank shareholders have spoken clearly with today’s vote: the status quo is unacceptable. RBC–and all other Canadian financial institutions–must act now to identify and eliminate racist policies and practices in their businesses,” Murphy added.
RBC has not engaged in efforts to evaluate the potential negative impacts that its products and services may have on people of colour or Indigenous peoples. Despite the bank’s assertions that its internal reviews are sufficient to address its racial equity risks, shareholders clearly disagreed.
“Any racial inequity in banking systems, services and practices will have outsized impacts for racialized and Indigenous people across the country, and for our economy as a whole,” said Kevin Thomas, CEO of SHARE.
“RBC should be just as concerned as we are about ensuring fair access to capital for Indigenous and Black-owned businesses, access to inter-generational wealth-building opportunities and effective services for underserved communities. They should also be just as concerned as we are that certain communities are being forced to rely on predatory payday lenders. RBC should want to know whether its next AI and fintech processes are baking in unseen biases. RBC should want to ensure that their current and future employees are able to access real opportunities,” Thomas continued.
Taking place in Saskatoon, this year’s AGM was the first in-person RBC AGM since the start of the pandemic in 2020.
Shareholders had brought forward proposals on climate action and Indigenous rights, in addition to SHARE and the BCEGEU’s proposal on racial equity audits. Upon starting the AGM, Wet’suwet’en Hereditary leaders were denied access to the plenary meeting room.
“The events at today’s AGM underline the urgent need for RBC to identify and eradicate racist practices in its business”, said Stephanie Smith, BCGEU president, referring to the AGM’s segregation and unequal treatment of the duly-appointed proxyholders, Wet’suwet’en Hereditary leaders. “And clearly shareholders agree. 44 percent of votes –representing roughly $40 billion in shareholder value–supported our proposal. A racial equity audit is an important first step to ensuring an unacceptable situation like this never happens again. Shareholders are watching.”
Three Canadian banks already committed to conduct racial equity audits: Toronto-Dominion Bank, Canadian Imperial Bank of Commerce and National Bank of Canada. The racial equity audit proposal was also supported by leading proxy advisor Glass Lewis.
SHARE and BCGEU have filed a similar shareholder proposal at Bank of Montreal to be voted at the bank’s upcoming general annual meeting on April 18th.
SHARE is an award-winning non-profit organization dedicated to mobilizing investor leadership for a sustainable, inclusive and productive economy. We do this by supporting our investor networks and amplifying their voices to improve corporate sustainability practices and implement better rules and regulations that govern capital markets. For more information on SHARE, visit www.share.ca
ABOUT ATKINSON FOUNDATION
The Atkinson Foundation is a Canadian charitable foundation committed to social and economic justice. Our highest priority is strengthening movements for decent work and a fair economy. We collaborate with community organizers, policy innovators and investors to challenge income, wealth and democratic inequality. Learn more about us here.
The B.C. General Employees’ Union represents over 85,000 workers in almost every community and economic sector in British Columbia. Under BCGEU’s capital stewardship strategy, the union has submitted shareholder proposals at some of Canada’s largest companies on topics like human rights, racial equity, and executive compensation. The union’s strategy has succeeded in achieving strong commitments on ESG issues.