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Canada’s banks dragging their feet on net zero

2023 report card finds little progress and “sustainable finance” greenwashing

(Toronto, July 26 2023) A report card on the latest climate disclosures of Canada’s six largest banks finds little new policy to decarbonize their portfolios and raises concerns regarding bank pledges for “sustainable finance.” This is the second annual bank report card issued by Investors for Paris Compliance (I4PC), an organization that holds Canadian companies accountable to their net zero commitments.

“Canada is literally on fire but our banks are showing no urgency shifting their financing from activities that are making things worse,” said Kyra Bell-Pasht, Director of Research and Policy with I4PC. “The banks’ voluntary net zero pledges will need to be backed up by regulation if they continue to stall.”

Key findings:

  • The six banks score a range from B minus to D on disclosure of financed emissions, oil and gas and power sector targets, and transition planning. TD scores slightly better on target setting and BMO on transition planning, with National lagging overall.
  • New this year from some of the banks is target setting for additional sectors and a bit more clarity on how they will engage their clients on net zero.
  • Financed emissions reporting is plagued by methodological problems and a wide variety of approaches by the banks, making verification and comparison challenging.
  • Each of the banks continues to engage in financing of fossil fuel expansion projects such as Coastal GasLink and the Trans Mountain Pipeline, with no policy to stop.
  • The $2 trillion by 2030 “sustainable finance” pledges of the banks have no connection to the banks’ emissions targets. Worse, there are several examples of this financing going to companies increasing emissions.

“When sustainable finance is going to companies expanding pipelines, oil production, coal ports, and airports, that’s straight up greenwashing,” said Matt Price, I4PC Executive Director. “This is a growing reputational and liability risk for the banks, particularly as the climate crisis accelerates.”

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