Nearly two-thirds of the directors of Canada’s five biggest banks have past or present ties to high-carbon industries, making “climate-conflicted” bank directors a far more common phenomenon in Canada than in the United States, Europe, or the United Kingdom, according to a database compiled by DeSmog UK.
The analysis shows 62% of the directors of the Bank of Montreal, the Royal Bank of Canada, CIBC, Scotiabank, and TD Bank with past or present connections to industries like oil and gas, metals and mining, or coal, compared to 44% in the U.S., 34% in Europe, and 31% in the UK, Toronto-based Shift Action for Pension Wealth and Planetary Health notes in a release to complement the DeSmog exposé.
Among current directors, the totals come in at 19% of Canadian bank directors, compared to 9% in Europe, 8% in the UK, and 7% in the U.S.
“It used to be normal and even expected for a bank to have directors with deep ties to the fossil fuel industry,” said Shift Action Director Adam Scott. “But in this new net-zero era, having all these ties to polluters on your board is only going to stand in the way of following through on promises to be greener. It’s a competitive disadvantage.”
DeSmog’s wider analysis spanned 39 banks across 15 countries and traced the backgrounds of 565 directors, 368 of whom “had 940 past or current connections to industries that could be considered climate-conflicted.” Those numbers “raise concerns over a systemic conflict of interest at a time when the international financial sector is under increasing pressure to stop funding fossil fuels,” the UK-based investigative news platform states.
“Directors with affiliations to companies involved in extracting oil, gas, and coal—the world’s most polluting energy sources—were well-represented across bank boardrooms, with 16% of all board members having current or previous roles in the polluting energy sector,” DeSmog writes. “There were also significant ties to banks and investment vehicles supporting polluting industries, as well as to think tanks and lobbying groups with a history of campaigning against climate action.”
The Shift Action release connects that observation back to the Canadian directors, whose past affiliations include the Business Council of Canada, the American Petroleum Institute, and the Canadian Association of Petroleum Producers.
The overall results of the analysis are “predictable, yet shocking” Harvard University researcher Geoffrey Supran told DeSmog.
“The fossil fuel industry has a well-established track record of ingratiating itself with society’s opinion leaders and decision-makers, and because of the revolving doors between the corporate leaderships of incumbent industries,” he said. “Having its fingers in all the pies allows the fossil fuel industry to quietly put its thumb on the scales of institutional decision-making, helping delay action and protect the status quo.”
Though financial institutions are increasingly promising to decarbonize their holdings by 2050, “bankers too often have vested interests in pumping up the carbon bubble, which is why we need central banks to play their role as regulators of the financial system and stamp out risky fossil fuel lending,” added Simon Youel, head of the influencing program at London, UK-based Positive Money.