Green Bond debut for Royal Bank of Canada

The Royal Bank of Canada (RBC) has announced a maiden EUR500 million five-year Green Bond offering.

The money raised will fund a portfolio of new and existing assets focusing primarily on renewable energy and green buildings. Other eligible categories for the allocation of Green Bond proceeds include: clean transportation, sustainable water and wastewater management, environmentally sustainable management of living natural resources and land use, energy efficiency, and pollution prevention and control.

According to David Power, Vice-President, Corporate Treasury, RBC, “The issuance of Green Bonds will further diversify our funding sources and satisfy the needs of investors that have green mandates.”

Pathway to sustainability

Since their introduction in 2007, Green Bonds have become mainstream in the financial community with the annual issuance of Green Bonds reaching $167 billion in 2018, according to the Climate Bonds Initiative.

Green bonds provide fixed income investors with a way to invest sustainably within their portfolios, without necessarily compromising on risk and return objectives, through liquid and tradeable investments.

As climate change becomes an undeniable long-term risk to be managed by politicians, corporations, pension funds and asset managers alike, the demands on treasury operations are growing. Long-term investors are on the look-out for assets resilient to the impact of climate change and that brings with it additional obligations on companies in terms of data collection and transparency.

Environmental leadership

RBC has a history of environmental leadership, dating back to 1991 when it launched its first corporate environmental policy. In 2017, RBC published a Climate Change Position & Disclosure Statement outlining the steps it is taking to manage climate risks and opportunities, as well as its ongoing commitment to climate-related disclosures.

“RBC is a purpose-driven organization, and how we act is just as important as what we achieve,” said Valerie Chort, Vice-President, Corporate Citizenship, RBC.

“We are proud to finance environmentally responsible businesses and projects that promote the transition to a more efficient and sustainable lower-carbon economy,” said Patti Shugart, Managing Director and Global Head, Corporate Banking and Global Credit, RBC Capital Markets.