RBC's Net Zero Leasing
RBC's Landlord Engagement Program Secures Net Zero Commitments by 2040
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Royal Bank Plaza, Toronto's iconic gold-windowed skyscraper, has committed to achieving net-zero operations by 2040 — making it the latest landmark to join RBC's fast-growing Landlord Engagement Program. The bank has now secured net-zero pledges from landlords covering more than 2.5 million square feet of leased office space worldwide, roughly the size of 147 hockey rinks, according to Stratford Beacon Herald.
The plaza's owner, Spanish real estate giant Pontegadea — the investment arm of Zara founder Amancio Ortega — will develop a decarbonization roadmap to hit the 2040 target. The deal is backed by RBC's climate lease program, which the bank launched in 2023 to cut carbon emissions in spaces it rents but does not fully control.
How RBC's Green Lease Program Actually Works
Most large banks face a stubborn problem: they lease the majority of their office space. That means landlords control the heating and cooling systems, not the bank. RBC set up its Landlord Engagement Program in 2023 to fix this. The program adds climate-focused clauses to new and renewing lease deals, requiring landlords to share energy data and commit to emissions targets, according to Mitchell Advocate.
Jon Douglas, RBC's Senior Director of Climate Operations, has said that "alignment of owners and occupants is an important factor" in cutting building emissions. The bank leases roughly 22 million square feet of space globally. Without landlord buy-in, RBC cannot meet its own operational emissions goals — no matter how many solar panels it puts on rooftops it owns.
Pontegadea and Cadillac Fairview Sign On as Key Partners
Pontegadea acquired Royal Bank Plaza in January 2022 for approximately $1.15 billion CAD. Its commitment to net zero by 2040 follows a similar deal RBC struck with Cadillac Fairview in April 2024 for the RBC Centre tower, also in Toronto's Financial District. CT REIT signed a Memorandum of Understanding with RBC in June 2025 for retail-specific building upgrades, according to Daily Herald Tribune.
The 2040 target is no accident. It matches Toronto's TransformTO Net Zero Strategy, which set a city-wide emissions deadline of 2040 — a decade ahead of most national timelines. Buildings account for 57% of Toronto's total emissions, making commercial real estate a top priority for the city's climate plan.
Heat Pumps and Branch Retrofits Power the Broader Push
Beyond its leased towers, RBC is overhauling its own branches. The bank has invested $35 million to install heat pumps across its 1,200-branch Canadian network. Heat pumps replace gas-fired furnaces with electric systems that pull warmth from the air. RBC controls heating and cooling in 62% of its branches and aims to complete heat pump upgrades by 2035, according to Mitchell Advocate.
The branch retrofit program is expected to cut roughly 10,000 tonnes of carbon dioxide per year. RBC has also set a target to reduce its total global operational emissions by 70% by 2025, compared to 2018 levels. By early 2024, the bank reported it was 67% of the way there, according to Clinton News Record.
Critics Call Operational Cuts a Distraction From Bigger Emissions
Not everyone is cheering. Environmental groups argue that RBC's focus on its own buildings misses the bigger picture. Richard Brooks of Stand.earth says the bank's operational savings are a "tiniest fraction" of the impact caused by its lending to oil and gas companies. He calls moves like this "greenwashing" — using small climate wins to mask much larger fossil fuel financing.
The criticism lands harder given RBC's recent moves. In January 2025, RBC quit the UN-backed Net-Zero Banking Alliance. In April 2025, it retired its $500 billion sustainable finance target, citing legal uncertainty tied to Canada's anti-greenwashing law, Bill C-59. The bank says it now follows its own independent sustainability framework, according to Stratford Beacon Herald.
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