Canadian Banks at Odds with Net Zero

Canada’s five largest banks may be undermining their own net zero goals, according to new analysis from think tank InfluenceMap. Royal Bank of Canada (RBC), Toronto-Dominion Bank (TD Bank), Scotiabank, Bank of Montreal (BMO) and Canadian Imperial Bank of Commerce (CIBC) – all signatories of the Net Zero Banking Alliance – appear to be misaligned with climate science across climate governance, financing portfolios and climate policy engagement, according to InfluenceMap. For instance, all five banks are members of industry associations that have obstructed financial and real-economy climate policies in Canada. The analysis also found that all their financing and fossil fuel exclusion policies were “highly misaligned” with the International Energy Agency’s and Intergovernmental Panel on Climate Change’s science-based net zero pathways. “The report shows that despite their position of power, the big-five Canadian banks are failing to support ambitious climate policy in Canada in line with their net zero commitments,” said Catherine McKenna, CEO of Climate and Nature Solutions, Chair of the UN Secretary-General’s High-level Expert Group on Net-Zero Commitments, and former Canadian Minister of Environment and Climate Change. “These banks hold the keys to unlocking the green transition if they commit to using their climate influence and redirecting financial flows from fossil fuels towards clean energy and solutions. This would not only help tackle climate change but also create good jobs and increase Canada’s global competitiveness.” In other banking news, four of the world’s largest banks – Citi, Bank of America, JPMorgan Chase and Wells Fargo – reportedly left the Equator Principles last week. The principles aim to provide a global common baseline and framework for financial institutions to identify, assess and manage environmental and social risks when financing projects.

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