Greenhouse gases: Canadian banks far from the targets set by the UN

By joining this alliance, they have pledged to align their loan and investment portfolios with achieving net zero greenhouse gas emissions by 2050, as well as setting interim targets for 2030 or earlier.

But instead of changing their practices and reducing funding for fossil fuel industries, banks are increasing their aid to this sector, Greenpeace deplores in a report released Wednesday.

“The banks’ current commitments are far, far below what the UN has set as minimum requirements” and “either they are serious about phasing out their financial support to fossil fuel companies or they will be excluded from the banking alliance. Net Zero said Keith Stewart, senior energy strategist at Greenpeace Canada.

In his report entitled “Aligned with Target Zero? The so-called zero net commitments of Canadian banks, “Greenpeace draws on data from the Banking on Climate Chaos study, published by a consortium of environmental groups last spring.

According to this study, between 2020 and 2021, financial support from Canada’s top five fossil fuel banks has increased to the point that they are now among the 20 largest fossil fuel lenders globally.

“After a sharp decline in fossil fuel lending in 2020 as a result of the pandemic, major Canadian banks’ support for the fossil industry increased by 70% in 2021 and represented the largest increase in globally funded emissions” , underlines the Green Peace report.

CBR, for example, virtually doubled aid to this sector from 2020 to 2021, from $ 19 billion to $ 39 billion (B $), according to data from the Banking on Climate Chaos study.

Paradoxically, in the same year in October, RBC, BMO, CIBC, Scotiabank and TD Bank announced in a joint press release that they have “worked with our customers to reduce carbon emissions, invest in renewable energy projects and support finance. “

Gradually phase out the financing of fossil fuels

The Net Zero banking alliance asks its members to “reduce and phase out all fossil fuels that cannot be subject to emissions control measures as part of a just transition”, but according to Greenpeace, none of the major Canadian banks have a policy to eliminate funding for the oil and gas industries.

The criteria of the Net Zero banking alliance also exclude the financing of any new project related to the combustion of coal.

But according to Keith Stewart of Greenpeace, the coal project financing policies of major Canadian banks are “weak”.

In an interview with The Canadian Press, he gave the example of the CIBC, which on its website indicates that it intends to “limit” its support to “building new coal plants.”

“But limiting doesn’t mean eliminating,” said Keith Stewart.

He added that “CIBC has $ 4.8 billion in coal-related loans or subscriptions,” citing the “Global Coal Exit List,” a report by the German NGO Urgewald on financing the global coal industry.

Financing companies that have a transition plan

The Net Zero Alliance guide “makes it clear that ongoing fossil fuel funding is only appropriate if the receiving company has a transition plan in line with the principle of carbon neutrality,” said Keith Stewart.

Still, he added, “Canadian banks are financing companies like Suncor or Imperial Oil, which don’t have a real transition plan.”

Under the rules of the Net Zero banking alliance, many members “can and must go beyond 50% emission reductions by 2030” and must reach a final state of net zero emissions well before 2050.

“It is time for banks to step up their game on climate finance and at least meet UN minimum standards, rather than support a race to the bottom,” the Greenpeace spokesperson said.

The UN is currently developing a procedure to expel members who do not meet the criteria, said Keith Stewart, stressing that “Canadian banks will have a tough awakening if they don’t abide by the rules.”

The banks respond

In email exchanges with The Canadian pressthe five banks defended themselves by saying they were making progress in their lending and investment portfolios towards achieving net zero greenhouse gas emissions by 2050.

Scotiabank reported The Canadian press to a document called “Carbon Neutral 2022” in which it indicates that it intends to reduce the intensity of CO2 emissions by 30% for its oil and gas portfolio by 2030.

However, this document emphasizes that the achievement of the various objectives depends on several factors, including “government policies and incentives; the extent and scope of actions taken by clients or sectors; the social acceptability of major economic changes; the pace of technological innovation; changes in consumer demand; and a myriad of other economic and social factors over which the Bank has little or no direct control ”.

TD also stressed that “the transition to a low-carbon economy will require long-term collaborative efforts in multiple sectors” and that it has “an important role to play in the transition to a zero-carbon world”.

“The biggest impact RBC can have is helping our clients make the transition. We work with clients across all industries through consulting and financing solutions to help them reach net zero, ”said Rafael Ruffolo, communications director at RBC.

In response to questions from The Canadian pressBMO has sent a document called “Climate Report 2021”, in which it is written in particular that the bank has set a goal of “reducing the intensity of portfolio emissions by 33% by 2030”, with the aim of achieving net zero by 2050.

The CIBC replied that it is “committed to making significant progress towards a low-carbon future and has” begun to set clear and measurable targets “to achieve net greenhouse gas emissions from its operations and financials by 2050.”

Asked to comment on the study showing that financial assistance from major Canadian fossil fuel banks increased in 2021, none of the five banks responded.

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