The Royal Bank of Canada (RBC) is the collective name for RBC and its subsidiaries. It is Canada’s largest bank in terms of assets and market capitalization, and among the largest banks in the world in terms of market capitalization. It offers personal and commercial banking, wealth management services, insurance, corporate and investment banking and investor services globally. It has offices in Canada, the USA and in 49 other countries.
Bloomberg named RBC the fourth Strongest Bank in the world in May 2013. Four of Canada’s banks were named in the top 10 of this list reflecting Canada’s status as one of the most stable economies.
RBC employs over 80,000 people who serve an estimated 15 million personal, business, public sector and institutional clients.
RBC’s sustainability reporting suite includes at least seven different reports with varying formats and frequencies, as well as its website www.rbc.com/community-sustainability. Of this it says, “We strive to produce transparent and accessible reporting, and use a range of formats designed to meet the needs of a variety of audiences.”
At 139 pages the Corporate Responsibility Report and Public Accountability Statement is excessive but highly navigable thanks to a 12-page Content Index and an 8-page GRI Index. RBC has self-declared a GRI Application Level C using G3.1 and the Financial Services sector supplement. This declaration seems conservative considering the GRI Index states most Profile Disclosures and 47 Performance Indicators have been reported against. However, the GRI Index lacks any information on the level of disclosure the company has achieved for each indicator. The report covers Corporate Responsibility at RBC, Corporate Integrity, Economic Impact, Marketplace, Workplace, Environment and Community.
A main function of sustainability reporting is to be a tool through which a company can both engage with its stakeholders and respond to important events and issues that have arisen throughout the reporting period. The content should therefore be a reflection of those issues most relevant to stakeholders, as identified through a comprehensive materiality process and stakeholder engagement. RBC states that the content of this report has been shaped by engagement with stakeholders and events that occurred during 2012, namely acquisitions and sales of assets. The methods used, issues covered and purpose of engagement with each stakeholder group are reported. However, the outcomes of these engagements and how the content of this report is specifically relevant to stakeholder issues are not. As a result the link between stakeholders and how this report functions as a tool to respond to them is broken.
That said, the report points out that RBC clients are not afraid to ask challenging questions and so it tries “not to shy away from having conversations about some of the tough issues.” A number of these ‘challenging’ questions and statements have been littered throughout the relevant sections of the report. For example in the Environment chapter it states “Banks should stop doing business with customers who harm the environment.” RBC’s response includes information on its risk management policies and refers to its active role with the Equator Principles. In the Community chapter a question asks “You made record profits in 2012. How are you giving back to communities?” The answer given is that in 2012 RBC gave over $61 million in donations and sponsorships for community events and organizations. Now, there’s no disputing that $61 million is a lot of money but if profit in 2012 was $7.5 billion (RBC Annual Report 2012) then that amounts to less than 1%. This information fails to answer the question posed and the report does not tell readers where they can access further information on what RBC does with the remaining 99%.
In each chapter the priorities, performance highlights for 2012 and plans for 2013 are detailed but there is no reporting of progress against last year’s plans, no firm targets are set and no detail is given on RBC’s strategies.
This report is well-written but has the feel of a company that is new to reporting, when in fact RBC have produced a corporate responsibility report every year since 2003. There are no pictures in this report; it is page after page of text and graphs with little colour and nothing that really draws the reader in. In particular, some pictures of events or community groups supported by RBC would help to personalize the Community chapter, bring it to life and show RBC’s presence in its communities.
RBC states that this report is for “all stakeholders of Royal Bank of Canada” but a link needs to be created between the intended audience and the actual content of the report. Re-structuring the report by stakeholder group would make it easier for readers to find information of most interest to them.
The company’s Community and Sustainability website, where readers are occasionally directed for more detail, is very easy to use and information is easy to find but it doesn’t add much more to that available in the report.
The main issue facing the banking sector today is still the global financial crisis and the resulting facts that:
The RBC CEO statement says “the financial and economic crisis has caused a significant deterioration of trust and credibility across all industries, particularly banking”. Later, the report also states “We believe in transparency and accountability and will continue to improve our practices and reporting in response to both regulatory changes and emerging best practices.” But that’s as close as this report gets to addressing any of the major issues facing the banking sector or discussing the need for change. These issues have gone unaddressed and RBC has missed an opportunity to reassure stakeholders. One would expect one of the world’s largest banks, operating in over 50 countries, to devote some space in this report to talk about its perspective on these issues, even if it is in the enviable position of being one of the world’s strongest banks.
This report has not undergone external assurance, which would increase reader’s confidence in the credibility of the statements put forward.
Samantha Eyre is an independent sustainability consultant specialising in corporate sustainability reporting: http://www.linkedin.com/pub/samantha-eyre/1a/803/ab0