Ottawa must force Canadian banks to respect their climate commitments, which would at the same time help them to face the current anti-energy transition which is gaining momentum in the United States, believes Greenpeace Canada.
Banks’ commitments to carbon neutrality by 2050 need to be regulated and flagged, says a report titled Climate Disengagement: What to do about the “silent quitting” of Canadian banks, released Wednesday by the environmentalist group.
Along with most of the world’s major financial institutions, Canadian banks are members of the Glasgow Financial Alliance for Net Zero led by Mark Carney and overseen by the United Nations, which has set itself the objective of financing the energy transition and the elimination greenhouse gas (GHG) emissions.
The outcry of some US states threatening to boycott and even sue investors who put forward environmental, social and governance (ESG) criteria for “collusion” against the oil and gas industry has scared banks, which threatened to leave the alliance of Mark Carney if the criteria of the United Nations to mark out their commitments were imposed on them.
The alliance responded by allowing its members to opt out of the UN benchmarks and self-assess their progress towards their climate goals. For participation in the alliance to be more than a public relations operation, an intervention from Ottawa is necessary, claims Greenpeace.
Because despite their carbon neutrality objectives, Canadian banks continue to finance the oil industry, which goes against the commitments they have made.
The Royal Bank is the champion of financing the fossil fuel sector, among the 60 largest banks in the world, notes Greenpeace. Four other Canadian banks, Scotia, TD, BMO and CIBC, rank among the top 15 global banks in financing oil and gas activity.
“Since bankers can’t, or won’t, act on their own, it’s time for our elected officials to finally lay down the law and regulate banks so they are part of the climate solution rather than a part of it.” ever greater part of the problem,” said report author Keith Stewart.
Regulation would also have the benefit of removing the threat of collusion lawsuits against the oil industry, according to Greenpeace, because a company cannot “collude” if it merely meets regulatory requirements.
Greenpeace laments that Canadian banks are “attempting to hide behind US antitrust laws to quietly abandon their net zero climate commitments.”
The outcry by some US politicians against investors who adhere to ESG criteria is actually a campaign orchestrated by the oil and gas lobbies to defend their interests, the report argues.
Giants like Blackrock, Credit Suisse and UBS have been banned from the financial markets of the State of Texas because of their climate commitments deemed to discriminate against companies in the fossil fuel sector.
A petition calling on the federal government to regulate banks to bring Canada’s financial system into line with the commitments of the Paris climate agreement has been launched by the environmentalist group, which can count on some support within the government.
Ontario Liberal MP Ryan Turnbull tabled a motion to this effect with the support of Bloc Québécois and New Democratic Party MPs. A senator, Rosa Gonzalez, introduced a bill that would impose targets on financial institutions.
Greenpeace also claims to have the support of the population, which 70% support imposing requirements on banks, according to a poll commissioned from Angus Reid.
