RBC, BMO commit to racial equity audits after shareholder pressure

TORONTO — Royal Bank of Canada and Bank of Montreal have committed to racial equity audits after facing pressure from shareholders.

RBC said Friday it will conduct a third-party audit of employment practices next year and another on business practices in 2025.

“We remain focused on identifying and helping to address barriers that can impede the success of Black, Indigenous and other racialized groups,” said RBC spokesman Jeff Lanthier by email. 

Racial equity audits look to identify and fix practices that may negatively affect Indigenous peoples and communities of colour, and overall evaluates how well a company is addressing systemic racism.

The bank’s announcement comes after it met this week with shareholder advocacy group SHARE and the British Columbia General Employees’ Union, which had together put forward a resolution at RBC’s annual general meeting calling for an audit that received 42 per cent shareholder approval.

The two groups also filed a similar resolution at BMO that got 37 per cent support, which SHARE pointed out earlier this week as it raised concerns that six months on from the vote, neither bank had made a public commitment to carry out the audits.

BMO confirmed late Friday that it, too, would go through with one.

“BMO is committed to equity, equality and inclusion through BMO’s Zero Barriers to Inclusion Strategy and we will be conducting a third-party racial equity audit,” said spokeswoman Kate Simandl in a statement.

“We look forward to updating our shareholders on our progress in 2024 and we appreciate SHARE’s engagement with us on this topic.”

CIBC and National Bank made commitments earlier this year to carry out audits, while TD Bank said last year it would do one, with the results expected soon.

This report by The Canadian Press was first published Nov 10, 2023.

Companies in this story: (TSX:RY; TSX:BMO)

Ian Bickis, The Canadian Press