TORONTO and SASKATOON - April 5, 2023
"This is an important day" - shareholder vote at RBC a "turning point" for systemic racism in Canadian financial institutions
More than 44% of RBC shareholders voted in favour of a proposal filed by SHARE on behalf of the Atkinson Foundation and the B.C. General Employees' Union (BCGEU). The proposal asks Royal Bank of Canada (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.
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 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."
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. 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 segregation and unequal treatment of duly-appointed proxyholders who are Wet'suwet'en Hereditary leaders at the RBC AGM. "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: Proxy Alert: Racial Equity Audit Proposals at Royal Bank of Canada and Bank of Montreal:
Harvard Business Review: Racial Equity Audits: A New ESG Initiative https://corpgov.law.harvard.edu/2021/10/30/racial-equity-audits-a-new-esg-initiative/
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 network and amplifying their voices to improve corporate sustainability practices and implement better rules and regulations that governcapital 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.
Media Contact: Anthony Schein
Director of Shareholder Advocacy
BCGEU Capital Stewardship Officer
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BCGEU Headquarters is on the unceded and shared traditional territory of the xʷməθkʷəy̓əm (Musqueam), Skxwú7mesh (Squamish) & Səlí̓ lwətaʔ (Tsleil-Waututh) peoples.