Export Development Canada will need to stop financing fossil fuel projects, do a better job of climate reporting and disclosure, and show broader leadership on sustainable finance and climate justice if it plans to bring its investment and subsidy decisions in line with Canadian climate policy, according to a stinging technical assessment released earlier this week by Ottawa-based Horizon Advisors.
“By providing direct financing, credit, and insurance in carbon-intensive sectors like fossil-based energy,” EDC “is significantly undermining Canada’s international climate commitments,” Horizon states. While Canada’s Export Development Act gives EDC “the ability to provide its clients with stable and efficient financing underwritten by taxpayers,” the consultancy adds, its status as a Crown corporation also “confers important duties on EDC concerning transparency and public accountability.”
But while EDC has taken a “good first step” by promising a 15% reduction in its support to the most energy-intensive sectors, notes the report, commissioned by Oil Change International and Above Ground, “the target sets a low level of ambition and EDC continues to provide insufficient level of disclosure on carbon exposure.”
The analysis comes after reports of EDC lavishing C$45 billion in support on the oil and gas sector since 2016, against only $7 billion for cleantech projects, Horizon states. Earlier this year, it extended a “highly inappropriate” loan to support completion of the intensely-contested Coastal GasLink pipeline in British Columbia.
In 2018, EDC’s own figures showed a 12-fold difference between the $62 billion it had handed to fossils and the $5 billion it invested in cleantech, Oil Change and a group of Canadian organizations reported at the time.
The Horizon report lays out 17 recommendations that would see the agency do a better job of disclosing climate risk, “stress-testing” its investment decisions against national and international climate targets, matching its carbon intensity targets with the country’s climate goals, eliminating new support for fossil fuel projects, supporting lower-carbon and clean technology industries, and introducing a “comprehensive climate rights regime” with mandatory disclosure.