(Toronto) Canadian environmentalists blame banks for forgetting the root cause of the many fires that have turned many of the country’s forests into living hells: climate change.

“The Arctic is on fire, and so is Hawaii. A hurricane hits Baja California for the first time in 90 years. What more does our banks need to take action? asks Richard Brooks, a director of the Stand group. earth.

This group has long lobbied banks to cut funding for the oil and gas sectors in favor of clean energy. And while they finally seem to be starting to get the message, Brooks and other environmentalists believe they’re not doing it fast enough.

He recalls that BloombergNEF had indicated, in a report published earlier in 2023, that Canadian banks were lagging behind in their financial support for clean energy compared to what is needed to save the climate. .

For example, RBC invested only about 40 cents in clean energy for every dollar invested in the oil and gas sector in 2021. The global average is 80 cents to the dollar, itself well below the threshold of the ratio of four dollars for one dollar that must be reached by 2030 in order to avoid warming above 1.5 degrees.

When banks are asked if they are adjusting their plan against climate change in light of the many wildfires, they maintain their speech on their commitments to fight against global warming and to help their customers to make the transition from carbon to clean energy .

The RBC, dead last in the ranking established by a report by the Climate Chaos Bank, does not highlight any changes to its policy. She says she is, however, looking to expand her capabilities to help her clients make the transition and get her management to pay attention to the climate.

“We strongly believe in the need to take more rapid and concerted action to address climate change,” said Jennifer Livingstone, Vice President, Climate Strategy.

But because of high interest rates and economic uncertainty, banks aren’t finding enough green projects that meet their funding criteria, says Ryan Riordan, research director at the Institute for Sustainable Finance at Queen’s University. .

“I believe they realize that few renewable or sustainable energy projects fail the risk-return characteristics. »

Banks have generally become more cautious about lending, said Shilpa Mishra, Managing Director and Head of Capital Raising Advisory Services at BDO.

The accounting firm says loan growth fell to 5% in the second quarter compared to the 8.3% average for the corresponding quarters of the past two years.

“The loan market has slowed because large Canadian institutions are less risk averse,” says Mishra.

She admits to not having perceived any notable change in the behavior of banks towards oil and gas projects, but the environmental, social and governance criteria are increasingly considered before a decision to invest.

Banks are also constrained by the slowness with which the federal government reviews what can be considered a sustainable investment, says Professor Riordan.

The draft of a so-called “taxonomy” was published in March, but the measure became unclear until it was clarified by the Minister of Finance. A spokesperson said the government was still reviewing it and considering feedback from various stakeholders.

Alberta’s recent moratorium on large renewable energy projects is not helping to find a solution, says Professor Riordan.

Still, there are signs that investments are gaining momentum.

In May, the International Energy Agency claimed that for every dollar invested in fossil fuels in 2023, $1.70 would be invested in clean energy. Five years ago, the ratio was 1:1.

But the slope remains steep to go up. According to the agency, the ratio should be 9:1 by 2030.

The issue of financing the transition should be high on the agenda of the next COP28 in November.

Last week, the organizing committee of the international conference indicated that the flow of private finance is expected to grow much faster to reach the total investment of US$2.4 trillion by 2030 to fight climate change. in emerging markets and developing economies.

“Financing for the fight against climate change is at the heart of the COP28 agenda, because it is thanks to it that we manage to turn the objectives into reality,” said the President-designate of COP-28 , Sultan Ahmed al-Jaber, in a statement. The time for action has come. »