The Royal Bank of Canada is being singled out for the “dubious honour of punching above its weight” after a new international study identified 60 of the world’s biggest banks that have invested US$3.8 trillion in fossil fuels since the 2015 Paris Agreement.
The report is delivering a boost to RBC Revealed, a grassroot divestment campaign that calls out the country’s biggest bank, with 17 million customers, for promising “a bright future for local communities” while “making climate chaos worse” with its investments in carbon-heavy projects like the Coastal GasLink and Line 3 pipelines. It’s also the world’s 12th-largest funder of coal, with C$14 billion invested, RBC Revealed says.
“RBC says all the right things,” the campaign site states. “But its climate and human rights practices are dead wrong.”
CBC’s coverage of this year’s Banking on Climate Chaos report by Oil Change International, Rainforest Action Network, BankTrack, Indigenous Environmental Network, Reclaim Finance, and the U.S. Sierra Club, centres on the US$160 billion/C$208 billion RBC has poured into fossil infrastructure over the last five years, and the factors that have slowed down the transition in the Canadian financial sector. “There’s a lot in the Canadian psyche and history that is wrapped up in the fossil fuel economy, and we’re feeling some of that inertia right now,” said Laura Zizzo, co-founder and CEO of finance and strategy advisory firm Manifest Climate.
CBC cites an email from RBC that reaffirmed its commitment to net-zero emissions by 2050, its promise of $500 billion in sustainable investment by 2025, and its decision to withhold funds for projects in the environmentally sensitive Arctic National Wildlife Refuge in Alaska. “But in a country where there is so much political and economic pressure for oil and gas development, RBC said that to be successful, its move to net-zero must be gradual,” writes Don Pittis, the CBC business columnist who cited the bank for the “dubious honour of punching above its weight”.
When RBC made its divestment announcement last fall, veteran climate analysts called the move a “baby step” and just the first of many it will have to take.
“It’s good to see a Canadian bank has finally looked up and noticed global financial trends that are increasingly shifting away from fossil fuels and toward climate-safe investments,” Climate Action Network-Canada Executive Director Catherine Abreu told The Energy Mix. “But RBC remains one of the five largest financiers of fossil fuels in the world, so this is the first step of many it will have to take in order to move into a zero-carbon future.”
“It’s essentially the least they could do when it comes to responsibly restricting finance for fossil fuels,” agreed Shift:Action Director Adam Scott. “Any move towards restricting lending and investment for oil, gas, and coal is a step in the right direction, but these measures are far too little, too late.”
After RBC, the research released this week shows fossil investments worth US$121 billion from TD Bank, $114 billion from Scotiabank, $97 billion from Bank of Montreal, and nearly $67 billion from CIBC over the last five years.
Banking on Climate Chaos concludes that “even amidst a pandemic-induced recession that resulted in an across-the-board reduction of fossil fuel financing of roughly 9%, the world’s 60 largest banks still increased their financing in 2020 to the 100 companies most responsible for fossil fuel expansion by over 10%,” Oil Change International writes in a release. The list of beneficiaries “includes companies behind highly controversial projects like the Line 3 tar sands oil pipeline and the expansion of fracking on the land of Indigenous Mapuche communities in Argentina’s Patagonia region.”
The report “serves as a reality check for banks that think that vague ‘net-zero’ goals are enough to stop the climate crisis,” said Oil Change Senior Research Analyst Lorne Stockman. “Our future goes where the money flows.”
Banks “need to be focused on reducing fossil fuel production now, rather than on a far off and insufficient goal in the distant future,” Stockman added. “The time for half-measures is over.”
“We must understand that by bankrolling the expansion of oil and gas, the top banks of the world have blood on their hands, and no amount of greenwashing, carbon markets, unproven techno-fixes, or net-zero commitments can absolve their crimes against humanity and Mother Earth,” said Indigenous Environmental Network Executive Director Tom Goldtooth.
“Indigenous lands globally are being plundered, our inherent rights are being violated, and the value of our lives has been diminished to nothing in the face of fossil fuel expansion. For the sacredness and the territorial integrity of Mother Earth, these banks must be held accountable for covering the cost of her destruction.”