Royal Bank of Canada eliminates climate, ESG roles amid reorganization, sources say

By Nivedita Balu

TORONTO, Nov 12 (Reuters) - Royal Bank of Canada RY.TO has eliminated at least three senior climate, sustainability and environmental, social, and governance (ESG) roles, according to three people familiar with the lender's decisions, as the biggest Canadian bank reorganizes its teams and creates a new vice presidency of public policy.

The shakeup comes as North American banks have moved to reduce their focus on climate and ESG businesses, reflecting changing economic and political priorities in the US and Canada.

US President Donald Trump has said he believes climate change is a hoax and has withdrawn the country from global efforts to combat it, while proposing looser rules for oil and gas drilling operations. In Canada, Prime Minister Mark Carney has prioritized the oil and gas sector, hoping to find new markets for Canadian energy and protect the country's economy from US tariffs.

The roles that RBC eliminated include vice presidents of climate strategy, ESG risk and also sustainability strategy and performance, the people told Reuters.

Spokesperson Andrew Block said RBC had "moved the climate team in its entirety into a newly created Public Policy group to give us a stronger voice with more impact on important policy issues, with climate and sustainability as its main focus."

RBC has also moved the sustainability reporting function into the finance unit, Block said, adding that about half a dozen jobs were lost due to duplication of roles. Employees who have moved to the new team will have an expanded mandate, which will include climate, he said.

RBC, which has a large US operation and is one of the world's biggest fossil fuel lenders, was among the major banks last year to withdraw from a global banking sector climate coalition that Carney helped set up in 2021 when he was a UN climate envoy.

RBC also dropped its sustainable finance goals in 2025, citing recent changes to Canada's Competition Act that it said had limited the type of information it could disclose.

The bank named Emily Head as its vice president of public policy, where she will oversee policy issues such as AI, payments, fraud and scam prevention as well as climate, sustainability and a host of other issues, according to a LinkedIn post on Monday.

Head has been with the bank for nearly 17 years with experience in ESG law, most recently serving as vice president and associate general counsel. She will report to Kirsten Sutton, the US-based senior vice president, global government affairs and public policy.

"We have embedded teams across all our businesses focused on advancing our climate commitments and supporting our clients as they navigate the transition — and these teams continue to grow," Block said.

Richard Brooks, the climate finance director at advocacy group Stand.Earth, said the move could mean the bank loses specialization skills and dilutes its focus.