Month: May 2022

When most people first learn that their financial institutions are contributing in major ways to making the climate crisis worse, one of the first questions they typically ask is, so where should I bank then?

While the issue is complicated, Matt Price of Investors for Paris Compliance recently wrote this helpful steer.

Canada’s banks are particularly carbon entangled, with our big five each featuring in the top 20 largest funders of fossil fuels in the world. While we need to keep lobbying governments to better regulate both the fossil fuel sector and the financial sector, climate-concerned Canadians can also take action by letting their bank know they are unhappy with its performance and either threatening to shift their business elsewhere or actually doing it.

But shift where? We get this question a lot because we carefully parse the climate disclosures of Canada’s banks to compare them with best practices given by science. They are each now talking a good game about getting to “net zero” by 2050, but the reality is unfortunately less than advertised. In this piece, we hope to provide a general ranking of where the banks are in their policy journey so that you can make your own decisions on how or whether to engage with them.

The best financial institutions tend to be credit unions, of which Canada has plenty of good ones that offer most banking services. You can find one near you using this tool. Regional bank Laurentian ranks second. After that, each choice is filled with challenges as the better banks have made some tangible commitments on fossil fuels, but continue to pour hundreds of millions into their expansion every year.

Dead last in the rankings? RBC:

As Spiderman fans know, with great power comes great responsibility. RBC is Canada’s largest bank and, as such, sets the tone. Unfortunately, RBC is Canada’s largest funder of fossil fuels, fifth largest in the world. Moreover, the tone we are hearing from RBC is decidedly pro-fossil fuels.

Incredibly, RBC is doing less than even the banks in the prior category. Unlike the other banks, it is yet to set any targets for its financed emissions and underestimates its current emissions by failing to account for what’s called “Scope 3” or downstream emissions.

Recently, RBC put out a report that called for increasing oil and gas production in Canada. Note that the International Energy Agency found getting to net zero means no investment in new fossil fuels — we already have enough to cook the planet. Only dodgy math could argue the opposite.

For these reasons, RBC is bringing up the rear.

Which is why RBC staff and customers are going to continue to see images like these, wherever they go. And hopefully more customers walking out their door.

 

Read the full article at the National Observer.

More and more attention has been paid recently towards the massive impact of banks and other big investors on climate change due to their continuing funding of fossil fuel expansion.

This article from VICE news last year sums up the problem nicely: The world’s biggest banks are still investing billions in fossil fuels, despite years of pledges on climate change. An excerpt:

It has been almost three years since the UN’s Intergovernmental Panel on Climate Change (IPCC), issued a stark warning: By 2030, the world must cut its carbon emissions by almost half of 2017 levels to keep global warming to 1.5 degrees above pre-industrial temperatures. Beyond this point, the risk of droughts, floods, famines and other ecological disasters becomes significantly higher. To adhere to the 1.5 degree target, the IPCC said the global economy must reach the point of carbon neutrality by 2050 – a date that has since become a de facto finish line for countries and corporations.

These days, almost everyone has a net zero by 2050 target, even airlines and oil majors. However, very few governments or companies have detailed exactly how they’ll get nearly halfway to carbon neutral in the coming decade. If the transition away from fossil fuels was truly underway, you’d expect to see financiers retreating from oil and gas and shifting ever-greater sums of capital towards renewable energy. That just isn’t the case for now.

According to Banking on Climate Chaos 2021, a report authored by the Rainforest Action Network and five other NGOs, fossil fuel financing from the world’s 60 largest commercial and investment banks was higher in 2020 than it was in 2016.

The numbers got even worse in 2022, especially for Canada’s banks who doubled down on fossil fuels and the tar sands in particular more than almost any other country on Earth.

Now about those Canadian banks, the National Observer recently wrote a great piece explaining the issue in Canada:

Despite making promises to achieve net-zero greenhouse gas emissions, Canada’s biggest banks play an outsized role in propping up the global fossil fuel economy: RBC, TD, Scotiabank, BMO and CIBC all find themselves among the world’s top 20 financiers of fossil fuels.

These five banks alone have pumped approximately $911 billion into coal, oil and gas companies since the Paris Agreement was signed in late 2015, and they are on track to cross the $1-trillion threshold later this year. That money is used to expand fossil fuel production, build new pipelines, construct liquefied natural gas (LNG) facilities and more, frequently at the expense of Indigenous rights.

Now, with a global energy transition underway, Canada’s bankers find themselves neck-deep in oil money with a choice to make: Turn their backs on fossil fuels — the main driver of climate change — or continue financing the very activity threatening all life on Earth.

Most banks don’t appear to want to make this choice. Instead, they’re trying to thread the needle by delaying climate action so there’s more time to squeeze revenue out of existing investments that can’t transition to a world without fossil fuels. Unfortunately for them, and us, time is running out to slash greenhouse gas emissions in half by 2030 — the only way scientists say the planet can buy time to prevent catastrophic warming.

Be sure to read the full articles at Vice, or the National Observer.