RBC-Oil Sands Financing

BUSINESS & GLOBAL SOCIETY

RBC – FINANCING OIL SANDS

Ankita BagriDiluk PereraGuy Pavlov

Mauricio BergamaschiShannta BadgettTroy Wei Yiqi

Introduction

SHOULD THE ROYAL BANK OF CANADA (RBC) CONTINUE TO FINANCE OIL COMPANIES INVOLVED IN THE EXTRACTION OF OIL FROM OIL SANDS IN THE PROVINCE OF ALBERTA IN CANADA?

Overarching Issue

Our Position“WE WILL TAKE A LEAD TO HELP THE OIL INDUSTRY ECOSYSTEM INTO A SUSTAINABLE FUTURE BY

CONTINUING TO FINANCE THE MOST ENVIRONMENTALLY FRIENDLY PROJECTS.”

System Fragility

RBC SWOT Analysis

System Dynamics

Recommendations

Agenda

Stakeholder Analysis

• OVER 10% OF THE RBC REVENUE IS GENERATED VIA FINANCING OIL SANDS INDUSTRY; AN INDUSTRY THAT HAS ATTRACTED LOT OF NEGATIVE ATTENTION.

WHY OIL SANDS INDUSTRY IS NOT SUSTAINABLE?

• CANADA COULD FIND ITSELF AN ENERGY SUPERPOWER OVERSPECIALIZED IN THE ‘OLD ECONOMY’ (RESOURCE EXTRACTION) IN A WORLD RAPIDLY TRYING TO CUT CARBON EMISSIONS AND AVOID CATASTROPHIC CLIMATE CHANGE

• OIL SANDS INDUSTRY IS RUNNING THE EXPLOSIVE CANADIAN GROWTH ENGINE- THE AVERAGE GROWTH IN ALBERTA’S GDP IS 12.7% PER ANNUM

• 90% OF THE NEW JOBS IN CANADA WERE CREATED IN ALBERTA, A PROVINCE WITH 11 PER CENT OF THE POPULATION

System Fragility

RBC SWOT Analysis on Financing Oil

Strengths Weaknesses

ThreatOpportunities

• Public opinion• Biggest financier of oil companies• Strong reputation • Spread across the globe

• Lead environmental initiative• Group Therapy with Banks• Alliance with Environmental Organizations• Balanced Approach

• Competition from other banks• Increased environmental objection• Regulatory and legal changes• Abandoned by consumers

Stakeholder Analysis - Oil Sands Financing

Levelof

Power

Level of Interest

Oil Companies (+)

Other Banks (+)

RAN (-)

First Nations (-)

Canadian Society (+/-)

Rest of the World Society (-)

Canadian Government (+)

RBC (+)

System Dynamic

Pollution

Negative Public Opinion

Government Perception

Banks Financing Oil Projects

B

BR

Economic Growth

R

PROFITSProject 1

Project 2

Project 3

Project 4

Project 5

Project 6

SUSTAINABILITYProject 5

Project 3

Project 2

Project 4

Project 6

Project 1

Finan

ce

Reject

Sustainability Evaluation

RBC

Oil compani

es

Banks

Government

Academy

RAN

Public

Research

Advise

Build Coalition

Take Initiative

Outline Plans

Invite

Other Banks

NGOs

Customers

Engage

Forum

Panels

Discussion

Public

Marketing Campaign

1 2 3

Sustainability

Evaluation

Build Coalition

MarketingCampaign

Recommendation

What kind of business leaders would you be?

“WE WILL TAKE A LEAD TO HELP THE OIL INDUSTRY ECOSYSTEM INTO A SUSTAINABLE FUTURE BY CONTINUING FINANCING THE MOST ENVIRONMENTALLY FRIENDLY PROJECTS.”