The Royal Bank of Canada will retrofit its 1,200 Canadian branches to help reduce carbon emissions.

The bank is investing $35 million over three years in the first phase of the decade-long project, which is slated to begin in 2025.

The first phase will involve the installation of energy-efficient, low-carbon cooling systems, such as electric heat pumps, which will replace aging heating, ventilation and air-conditioning (HVAC) systems. (Despite their name, heat pumps also function as air-conditioners during warm summer months.)

“The reason we’re undertaking this project is, approximately 40% of the bank’s operational emissions stem from the retail locations here in Canada,” said Jon Douglas, RBC director of global sustainability, in an interview.

“So, retrofitting these HVAC units is one of the largest opportunities that we have in the branch network to reduce our operational [carbon] footprint.”

The bank estimates that the HVAC updates will reduce branch emissions by 30%.

RBC is funding the retrofit program on its own without any support from government green building sources. The bank’s corporate real estate group will implement the HVAC-renewal effort.

RBC will decide on further investments following the initial three-year period as future costs of installation and equipment are determined, said Douglas.

Through ownership or tenancy agreements, RBC is responsible for controlling 62% of the HVAC units in its retail branches. The remaining 38% of the units are fully controlled by landlords.

“I think this is really supporting our RBCs climate blueprint,” said Douglas. “One of the pillars in that blueprint is advancing our own operations to net zero. So, this funding announcement really is associated with that kind of commitment.”

RBC leases most of its branch locations. The bank said it will work with landlords on its retrofit effort.

“We have over 500 landlords in the retail network, so we have a large group to engage with there,” said Douglas.

RBC operates within 22 million square feet of real estate globally. Douglas expects RBC’s engagement with landlords to help drive more climate action across the real estate sector.

RBC and Cadillac Fairview have already begun to collaborate on emission-reduction efforts in one of the bank’s flagship locations in downtown Toronto.

Buildings rank as Canada’s third-largest source of greenhouse gases, behind oil and gas facilities and transportation systems, and contribute about 14% of total emissions annually.

RBC is a founding partner of the Climate Smart Buildings Alliance, which was established in 2023 to
help reduce emissions in Canada’s buildings sector. The alliance’s key focus areas include increasing the use of low and zero-carbon building materials; reducing combustion in buildings and supporting a clean electricity grid; and reducing emissions through retrofits and net-zero new construction projects.

Pictured: Installation of an energy-efficient electric heat pump HVAC unit at the RBC Morningside and Milner branch in Scarborough, Ont.

Photo: Courtesy of RBC