The time has come for the big five Canadian banks to hold their annual general meetings. In addition to the usual financial reports and the election of directors, the banks will try to shine their ecological commitments and convince investors and the public that they take climate change seriously and that they are doing their part to fight climate change. this deepening crisis.
Posted at 11:00 a.m.
But there is a huge gap between their climate rhetoric and the reality of their business practices that could lead to their downfall.
According to the latest figures published by Rainforest Action Network1, the five major Canadian banks are among the top 20 financiers of fossil fuels. Collectively, they have provided more than $900 billion in loans and underwriting services since 2016, when the Paris Agreement was signed. In 2021, their support for the fossil fuel sector has increased by 70% compared to the previous year. And they show no signs of slowing down.
No concrete commitments
None of the banks have even committed to stop financing fossil fuel expansion. This is despite the fact that the world has already discovered more oil, gas and coal than can be burned if we are to limit warming to 1.5°C and the historic report published last year by the International Energy Agency says there should be no new fossil fuel supply projects on the road to carbon neutrality.
The banks TD, BMO, CIBC and Scotiabank have set some reduction targets for the emissions that they finance, particularly for the oil and gas sector, but these are based too much on targets based on intensity rather than on absolute targets. This means that they could meet their targets even if actual emissions remain stable or increase. RBC has not yet published targets for the issues it finances.
The gap between banks’ climate commitments and their actual business practices is clearly demonstrated by Scotiabank’s continued membership in Canada’s leading oil lobby group, the Canadian Association of Petroleum Producers (CAPP). The Association actively lobbies to weaken, delay and end climate action.
Recent examples include their efforts to increase subsidies for fossil fuel exploration projects, delay planned carbon price increases, and weaken the Clean Fuel Standard by excluding solid and gaseous fuels, a attempt which unfortunately proved successful.
In other words, Canada’s big five banks are trying to position themselves as part of the solution without addressing how they contribute to the problem. But reality is starting to catch up with them.
Banks may be forced to act
Banks’ refusal to fully align their business practices with scenarios to limit global warming to 1.5°C is leading to growing protests at their annual general meetings. Calls for government regulation are also becoming more frequent and insistent. During the last federal election, the Liberal Party promised to require “net zero” plans from federally regulated financial institutions – a promise that has yet to materialize.
For its part, the Bloc Québécois proposed to force the banks to stop financing new oil projects and to submit a timetable for completely eliminating fossil fuels from their portfolios. Just a month ago, Senator Rosa Galvez introduced a bill that would force banks to align with the goals of the Paris Agreement and dramatically increase the risk weighting in lending to development projects. fossil fuels.
A growing number of banks are looking to get ahead of the game themselves by adopting and expanding fossil fuel exclusion policies. In Canada, Vancity has already applied a fossil fuel exclusion policy for several years and, towards the end of 2021, the Laurentian Bank announced the end of all direct financing for the exploration and production of fossil fuels. The establishment explained that this decision was motivated by the desire to attract a new clientele concerned about the environment.
Bank overfunding of the fossil fuel industry is fueling the climate crisis, increasing our exposure to major risks and disasters like last year’s floods and wildfires in British Columbia. Banks need to accept this reality and start to walk the talk, and the sooner the better.