RBC CEO defends pipeline funding, calls for net-zero incentives

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April 7 (Reuters) - Royal Bank of Canada's (RBC) chief executive on Thursday defended the bank's funding of the Coastal GasLink pipeline and called for incentives to help the shift to a net-zero economy, as investors and indigenous groups denounced its support of fossil fuels.

Chief Executive Dave McKay was speaking at the bank's annual shareholder meeting, which had been changed to a virtual-only format late on Wednesday after confirmation of a positive case of COVID-19 among its staff.

Chiefs of the Wet'suwet'en indigenous people had traveled from British Columbia to Toronto to express their opposition in person to RBC's financing of the pipeline's construction on traditional indigenous land. The pipeline is 65% owned by private equity firm KKR & Co Inc (KKR.N) and the Alberta Investment Management Corp.

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Calling into the meeting, they accused the bank of funding a project that they said has damaged rivers and wetland forests and limited their ability to hunt wild life. read more

McKay said the project has been extensively reviewed and approved by regulators and has the support of all 20 nations along the route, including some Wet'suwet'en elected leaders. He added that 16 of them have taken the option to have an economic interest in it.

RBC shares fell 1.2% to C$135.48 at midday on Thursday, compared with the Toronto stock benchmark's (.GSPTSE) 0.7% decline.

Canada's major banks including RBC, the biggest, have released plans to lower their financed emissions, but continued funding of fossil fuel companies and pipelines has riled some investors and communities. read more

Last week, Canada released a C$9.1 billion ($7.24 billion) plan to meet its 2030 emissions-reduction targets. read more

Spending on green technologies is set to be a focal point of the 2020 budget, to be released later on Thursday. read more

The Canadian government's plan to reduce carbon emissions will lead to "a massive shift in this decade," which will require "public and private capital to support both growth and the green transition," McKay said.

"That's why investment and tax policies, as well as incentives must be considered."

McKay also reiterated his concern about a proposed tax on banks' profits. read more

Two shareholder proposals urging RBC to exclude fossil fuel activity and projects opposed by indigenous groups from eligibility for sustainable financing, and refrain from funding and advising on the privatization of pollution-intensive assets were defeated, in line with the board's recommendation.

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Reporting by Nichola Saminather in Toronto; Additional reporting by Mehnaz Yasmin in Bengaluru; Editing by Shailesh Kuber and Barbara Lewis

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