Forcing the hand of the Canadian financial sector to participate in the fight against climate change is the objective of the bill tabled Thursday by Senator Rosa Galvez in the Upper House. She hopes it could be sent to the Senate committee to study it before the summer.
“With this bill, we want to solve two problems that are interconnected,” explained to the Homework Ms. Galvez – the first being that climate change poses a growing risk to Canada’s financial and economic stability, and the second that the current financial system is fueling the climate crisis.
“It’s the elephant in the room!” We know that climate change and the extreme events associated with it affect the economy, but the financial sector – despite this situation – continues to fuel the crisis by financing projects that go against our commitments to the climate,” stresses Rosa Galvez. “Of course, the financial sector is concerned about the effects of climate change but, so far, it is only recommending the publication of risks, on a voluntary basis. However, it stops there, ”laments the senator.
Climate commitment, overriding interest
With this bill, any federally regulated institution in the financial field should make alignment with climate commitments a “matter of overriding public interest”. This includes the Bank of Canada, but also the Office of the Superintendent of Financial Institutions (OSFI) or Exports and Development Canada (EDC).
If this Senate bill passes, covered financial institutions would also have to meet target-setting, planning and reporting requirements for alignment with climate commitments, unless they can demonstrate that their production emissions was nil or negligible. Annual reports should also be made public and easily accessible online.
Furthermore, if an institution covered by the text is required to present financial statements or annual reports, a report on alignment with climate commitments should be part of it.
Progress to be made
In a new white paper, Rosa Galvez takes stock of a still lagging financial sector in Canada. For example, “the crown corporation Export Development Canada (EDC) provides oil and gas companies with an average of more than $10 billion each year in the form of financing, loan guarantees and insurance” he mentioned. With this support, Canada now ranks second among G20 countries in total public funding for fossil fuels, and first in per capita funding.
The big Canadian banks are not doing well either. Five of them – RBC, TD, Scotiabank, BMO and CIBC – are among the top financiers of fossil fuels globally, “accounting for 17.5% of all lending to the oil and gas sector, and three d ‘among them are ranked among the top 12 lenders to this sector’, according to the report Banking on Climate Chaosmentioned in the white paper.
“The financial industry is concerned about the systemic impacts of climate change, but not doing enough. To go further, someone from the outside has to come and force the institutions to be subject to the same rules to achieve the climate targets,” explains Rosa Galvez. “That’s what we want to do with this bill. »