Canadian banks | More than 140 billion in fossil fuels in 2023

Financing of fossil fuels by major Canadian banks has reached more than $140 billion in 2023, taking over a growing share of this sector that scientists are calling to abandon to curb global warming, the report reveals Banking on Climate Chaos (“Banking on climate chaos”), published this Monday.

15% of the world total

Five Canadian banks appear on the list of the largest financiers of fossil fuel projects in 2023, for a total of $142 billion. This sum represents almost 15% of the total of 962 billion from the 60 largest banks in the world. The Royal Bank of Canada (RBC) leads the way with $38.6 billion, placing it in 7th place.^e world rank. Since the Paris Climate Agreement in 2015, RBC’s financial commitments to fossil fuels total $350.6 billion.

Disproportionate funding

Canadian banks are also among those devoting the largest share of their financial commitments to fossil fuels. Scotiabank arrives at 2^e world ranking, with 2.33% of its assets devoted to hydrocarbons, just ahead of the Imperial Bank of Commerce of Canada (CIBC), at 2.24%. Bank of Montreal (BMO) and RBC tie for 7^e world rank, with 1.83%. Scotiabank and RBC are also among the 10 banks providing the most financing to fossil fuel expansion projects, the report highlights.

Oil sands

Canadian banks financed 49% of the $6 billion paid in 2023 to the 36 largest oil sands companies, a sector in which other banks around the world have reduced their investments, notes the report. Elsewhere in the world, it is the financing of liquefied natural gas (LNG) projects that is gaining importance. The industry presents gas as a transition energy, while “from a climatic point of view, this gas mainly comes from hydraulic fracturing, which makes it almost as [nuisible] than coal over the entire life cycle,” laments Patrick Bonin of Greenpeace Canada, who supports the report.

Global decline… insufficient

Total financing of fossil fuels by the 60 largest banks in the world amounted to $965 billion in 2023, down from the peak of $1,307 billion in 2019. “Those are still astronomical amounts,” says Patrick. Bonin. “Hundreds of billions are going into projects that aggravate the climate crisis when they should be going into solutions to resolve it,” he says. Canadian banks are following this downward trend to a lesser extent, led more by Chinese banks. On the other hand, Japanese and American banks are increasing their financing, slowing global decline.

Immediate action called for

The report calls on banks to “immediately” stop financing any fossil fuel expansion projects and adopt targets for reducing “financed greenhouse gas emissions” consistent with the goal of limiting global warming to 1 .5°C. “We must stop adding fossil fuels, there are already too many,” says Patrick Bonin, who recalls that the International Energy Agency is calling for emissions to be reduced by half by 2030. The funds thus made available should be devoted to solutions to the climate crisis, the report concludes.

Methodology: The report Banking on Climate Chaos is produced by a coalition of around ten non-governmental organizations, notably the American Oil Change International and Rainforest Action Network and the German Urgewald, and supported by more than 600 others. The data used comes from the London Stock Exchange Group, a stock exchange management and financial information dissemination company which notably owns the London Stock Exchange, and the financial group Bloomberg LP. The report presents the amounts of money in US dollars, which The Press converted to Canadian dollars.