Canada’s Big Six banks together announced Friday that they will join the global Net-Zero Banking Alliance championed by former Bank of Canada governor Mark Carney.
The commitment by the banks, which include Bank of Montreal, Canadian Imperial Bank of Commerce, National Bank of Canada, Royal Bank of Canada, Bank of Nova Scotia, and TD Bank, comes ahead of the UN climate summit set to start in Glasgow at the end of the month, where a major focus will be on finding the finances to fund the climate promises, The Canadian Press reports.
The industry-led alliance commits signatory banks to aligning their lending and investment portfolios with net-zero emissions by 2050, as well as to setting intermediate reduction targets for 2030 or sooner.
The six banks join Vancity and HSBC, the only banks operating in Canada to sign on to the alliance when it was first announced in April, as well more than 60 other institutions that together represent more than US$40 trillion in assets. The Canadian banks have faced sustained community pushback for their lavish funding of new fossil fuel projects.
The alliance, part of the wider Glasgow Financial Alliance for Net-Zero chaired by Carney, also requires members to publish emissions data and take a “robust approach” to carbon offsets, CP says.
Carney said in a statement that the financial systems needs to transform to ensure a “prosperous and just transition to net-zero” and that by joining the alliance, Canadian banks are “bringing their deep expertise and strong balance sheets to drive solutions for the sustainable economy.”
The alliance has, however, come under criticism for not going far enough, including ads published last week by more than 90 environmental groups that urged Carney to be more ambitious with membership requirements and stop giving “green cover” to high-carbon investments.
The groups want to see more immediate targets laid out to phase out fossil fuel funding, a prohibition on financing any new fossil fuel projects, and a goal of halving financed emissions by 2030.
Greenpeace Canada Senior Energy Strategist Keith Stewart said Canadian banks have to do more than join the alliance.
“The world is accelerating toward a zero-carbon economy and Canadian banks are still playing catch up,” he told CP in an email Friday. “Until they commit to a near-term phasing out of all financial support for fossil fuels and to fully respect Indigenous rights, they will still be part of the problem.”
In September, campaigners at Stand.earth singled out the Royal Bank as an institution that is still using “sustainability”-linked funds to prop up the country’s financially fraught tar sands/oil sands and pipeline industries. “In the lead up to the critically important COP26 climate summit,” Stand said in a release, RBC “inked a new deal to underwrite a C$1.5-billion bond for Enbridge which is currently expanding fossil fuel infrastructure across North America, including building the highly contested, Indigenous rights violating, Line 3 tar sands pipeline.”
Last week, an Abacus Data poll released by Stand showed majority support for “swift” federal climate action, across partisan lines and almost all geographies.
On LinkedIn, RBC CEO Dave McKay said the bank would work with businesses, including fossil fuel companies, to establish and accelerate their climate plans.
“This includes working with clients in emitting sectors, whose reduction strategies and increased investment in renewables and clean tech projects are critical to reaching Canada’s emissions targets.”
Canada’s big banks have made various other climate commitments in the past, including individual pledges in the past year to achieve net-zero by 2050.
In June, a new database showed that 62% of the directors of Canada’s five biggest banks have ties to “climate-conflicted” industries.
On Corporate Knights last week, Sussex Strategies senior counsel Shawn McCarthy argued that “dramatic” progress on greening Canada’s investment sector “cannot come too soon”.
The main body of this report was first published by The Canadian Press on October 15, 2021.