RBC $20m Impact Fund breaks new ground in Canadian banking sector

Royal Bank of Canada (RBC), one of the 'Big Five' banks in Canada, has launched a huge impact investing initiative.

The bank has announced a $20m commitment to a new social and environmental initiative to help solve social and environmental problems.

A statement from the bank said that ‘impact finance’ was ‘expected to help drive the next wave of innovation and productivity growth in the global economy’. It described impact finance as ‘a range of financial vehicles and services that use private capital to finance solutions to social and environmental challenges while generating financial return’.

The initiative is comprised of:

• A new $10m capital fund – the RBC Impact Fund – to help finance projects by organisations and entrepreneurs tackling social and environmental challenges. Priority areas will include projects promoting environmental sustainability and water resource management, and providing employment opportunities for youth and newcomers to Canada;
• 
A $10m investment by the RBC Foundation of its own assets into Socially Responsible Investment (SRI) funds.

‘We've been waiting for the right moment to launch a program of this nature, and the moment is now,’ said Gordon M. Nixon, president and CEO, RBC (pictured).

‘We are confident that our initial investment of $10m in the RBC Impact Fund will not only spark entrepreneurship and innovation in Canada, but also catalyze similar investments from others in the business community. We are also proud to put our money where our values are by investing an additional $10m of our own funds through the RBC Foundation in socially and environmentally screened funds.’

This is the first such initiative announced by a major Canadian financial institution.

‘RBC's initiative will provide an exciting opportunity to support ventures that have a positive impact on people, planet, and profit,’ said Ilse Treurnicht, CEO of Canada’s MaRS Discovery District in Toronto, and chair of the Canadian Task Force on Social Finance. ‘This announcement is an important watershed moment for impact finance in Canada. RBC's commitment is both innovative and forward-thinking.’

MaRS recently launched a Centre for Impact Investing to support the development of the social finance marketplace in Canada.

Leading Canadian impact investing website SocialFinance.ca has a blog on the significance of the announcement, Today, Impact Investing Goes Mainstream in Canada.

RBC has had a history of innovation in the field of Socially Responsible Investing; in 2007, it launched the RBC Jantzi Funds suite of products and in 2008, the PH&N Community Values Fund became part of the RBC Global Asset Management suite of funds. Both offerings provide investors with socially and environmentally screened investment opportunities, allowing them to help sustain the planet and support communities, while generating strong returns on their investments.

In the next few months, RBC will assemble an advisory panel to assist an internal group in developing criteria for the RBC Impact Fund (including types of organisations eligible for funding, terms of funding, geographical limitations, etc.), an appropriate governance structure, and processes. More detailed information on the eligibility criteria and application process for the Fund will be communicated in the coming months.

RBC employs approximately 74,000 full and part-time people who serve more than 15 million clients in Canada, the United States, and 56 other countries. RBC is listed in the 2011-2012 Dow Jones Sustainability World Index, the Global 100 Most Sustainable Corporations, and the DJSI North American Index. RBC has been named one of Canada's Greenest Employers, one of Canada's Best Diversity Employers, one of Canada's 50 Most Socially Responsible Corporations and one of the Best Workplaces in Canada. RBC is also listed on the Jantzi Social Index, the FTSE4Good Index, and the Canadian Carbon Disclosure Project Leadership Index.

In 2011, RBC contributed more than $98m to causes worldwide through donations of $64 million and sponsorship of community events and organizations of $34m.