After the Toronto Star ran a questionable editorial board interview featuring RBC CEO Dave McKay earlier this week, it was good to see a column that connected the dots between recent climate related disasters, record profits from oil and gas companies, and banks like RBC who continue to fund the endless expansion of fossil fuels that a climate safe world can no longer afford.
An excerpt from by Amir Barnea’s article:
Canada’s oil and gas industry is having a stellar year. Its best year ever, in fact. According to a report published last week by Pembina Institute, a non-partisan think tank focused on Canada’s clean energy transition, “Canadian oil and gas companies’ free cash flow is estimated to reach $152 billion in 2022. This is the highest level of profits the industry has ever seen.”
Those windfall profits could be used to get the oil companies to net-zero by 2050, a commitment made by the industry last year as part of the Pathways Alliance. Canadian oil and gas companies could invest in their own transition to renewable energy production as Europe’s largest oil companies, Shell, BP, and TotalEnergies, have done.
Instead, the industry is focused on delivering “short-term shareholder value” by paying dividends and executing massive share buyback programs (that help inflate their share prices), the Pembina report states.
While this is all unfortunate, none of it could have been possible without the co-operation of Canada’s big banks, the silent players who finance the climate crisis.
Since the Paris Agreement was signed in 2015, the Big Five banks (RBC, TD, Scotiabank, BMO, and CIBC) have invested $911 billion into coal, oil, gas, and tarsands. Even in the midst of a climate crisis, all of them increased their fossil fuel financing between 2020 and 2021.
It seems that for the banks — save for some long-term net-zero commitments — it’s mostly business as usual.
The article goes on to talk about recent efforts to rein in fossil fuel investments – and thus limit the climate risk in the Canadian financial system – via regulation.