Task Force on Climate-related Financial Disclosures Report ...

1 2020 RBC TCFD Report 1 HNW_NRG_B_Bleed_NoMaskRoyal Bank of CanadaTask Force on Climate-related Financial Disclosures Report 20202020 RBC TCFD Report 2 Caution regarding forward-looking statements From time to time, we make written or oral forward-looking statements within the meaning of certain securities laws, including the safe harbour provisions of the United States Private Securities Litigation Reform Act of 1995 and any applicable Canadian securities legislation. We may make forward-looking statements in this 2020 TCFD Report , in fillings with Canadian regulators or the Securities and Exchange Commission, in reports to shareholders and in other communications.

2 Forward-looking statements in this 2020 TCFD Report include, but are not limited to, statements relating to the causes and impacts of climate change globally, including our economies and communities in which RBC and our clients operate, our strategies to identify, mitigate and adapt to Climate-related risks, and our approach to identify and manage Climate-related opportunities. The forward-looking information contained in this 2020 TCFD Report is included to assist our stakeholders in understanding the ways we intend to address Climate-related risks and opportunities. This information may not be appropriate for other purposes. Forward-looking statements are typically identified by words such as believe , expect , foresee , forecast , anticipate , intend , estimate , goal , plan , strive , target and project and similar expressions of future or conditional verbs such as will , may , should , could or would.

3 By their very nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties, which give rise to the possibility that our predictions, forecasts, projections, expectations or conclusions will not prove to be accurate, that our assumptions may not be correct and that our strategies to mitigate and adapt to Climate-related risks and opportunities will not be caution readers not to place undue reliance on these statements as a number of risk factors could cause our actual results to differ materially from the expectations expressed in such forward-looking factors many of which are beyond our control and the effects of which can be difficult to predict include credit, market, liquidity and funding, insurance, operational, regulatory compliance (which could lead us to being subject to various legal and regulatory proceedings.)

4 The potential outcome of which could include regulatory restrictions, penalties and fines), strategic, reputation, legal and regulatory environment, competitive and systemic risks and other risks discussed in the risk sections and Significant developments: COVID-19 section of our Annual Report for the year ended October 31, 2020 (2020 Annual Report ) and the Risk management and Impact of COVID-19 pandemic sections of our Quarterly Report for the three-month period ended January 31, 2021 (Q1 2021 Report to Shareholders); including business and economic conditions information technology and cyber risks, Canadian housing and household indebtedness, geopolitical uncertainty, privacy, data and third-party related risks, regulatory changes, environmental and social risk (including climate change )

5 , and digital disruption and innovation, culture and conduct, the business and economic conditions in the geographic regions in which we operate, the effects of changes in government fiscal, monetary and other policies, tax risk and transparency, and the emergence of widespread health emergencies or public health crises such as pandemics and epidemics, including the COVID-19 pandemic and its impacts on the global economy and Financial market conditions and our business operations and Financial results, condition and caution that the foregoing list of risk factors is not exhaustive and other factors could also adversely affect our results. When relying on our forward-looking statements to make decisions with respect to us, investors and others should carefully consider the foregoing factors and other uncertainties and potential events.

6 Material economic assumptions underlying the forward-looking statements contained in this document are set out in the Economic, market and regulatory review and outlook section and for each business segment under the Strategic priorities and Outlook headings in our 2020 Annual Report as updated by the Economic, market and regulatory review and outlook and Impact of COVID-19 pandemic sections of our Q1 2021 Report to Shareholders. Except as required by law, we do not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by us or on our information about these and other factors can be found in the risk sections and Significant developments: COVID-19 section of our 2020 Annual Report and in the Risk management and Impact of COVID-19 pandemic sections of our Q1 2021 Report to RBC TCFD Report 3 Climate change is a significant threat to our environment, our economy and our communities.

7 The COVID-19 pandemic has focused attention on our interconnected world and reinforced the need to work together to accelerate a reduction of emissions in a socially responsible manner. RBC is fully committed to doing our part in the Financial system s efforts to scale up support for clean economic growth and transition to a net-zero economy. Given that climate change is one of RBC s top and emerging risks, the Board of Directors oversees management s plans and carefully assesses whether they effectively balance our strategic opportunities with appropriate risk Taylor Chair of the Board, Royal Bank of CanadaClimate change impacts every aspect of our life. As one of the largest banks in the world, we have to play an active role in helping our clients and communities make the transition to net-zero.

8 That s why we re focused on accelerating cleaner economic growth, a key tenet of the RBC Climate Blueprint. To support this, we have committed to net-zero emissions in our lending portfolios by 2050, aligning with global goals set out in the Paris Agreement, and we will measure and disclose our financed emissions in phases starting in 2022. We have also set a $500 billion sustainable financing target by 2025, which builds on our previous $100 billion target achieved last year well ahead of schedule. Additionally, our support of international initiatives and partnerships, such as The Financial Stability Board s recommendations for more effective Climate-related Disclosures will help all of our stakeholders develop a clear picture of RBC s opportunities and risks related to climate speed and scale of our collective response to the global pandemic showed a willingness from governments, businesses and communities to pull out all the stops to protect the health, safety and Financial well-being of those they serve.

9 As we move ahead, we must act with the same collaborative spirit in tackling climate change which presents far greater threats to our society than COVID-19. We have to act together and we can t fail. David McKayPresident & Chief Executive Officer, Royal Bank of CanadaRoyal Bank of Canada and its subsidiaries (RBC, we, our or us) support the recommendations of the Financial Stability Board s Task Force on Climate-related Financial Disclosures (TCFD) and committed to producing annual Disclosures that consider these recommendations. RBC first made this commitment in the 2017 RBC Climate change Position and Disclosure Statement, which was our first disclosure that addressed the TCFD is our fourth annual TCFD disclosure.

10 It supplements the TCFD content disclosed in our 2020 Annual Report (see TCFD Disclosure starting on page 95). We also provide relevant information in other public reports, including our 2020 Environment, Social and Governance (ESG) Performance Report , our RBC Climate Blueprint and our response to the 2020 CDP questionnaire. All information in this Report is as at October 31, 2020 and all amounts are in Canadian dollars, unless otherwise specified. Information contained in or accessible through the websites that we mention in this Report do not form part of this have a phased approach to implementing the TCFD recommendations, aiming to integrate them over time. Our Disclosures will also evolve to reflect our advancements in how we manage Climate-related risks and opportunities, and will improve in line with advancements in data availability and quality.