The CEOs of Canada’s big five banks on Thursday reassured members of parliament about their commitment to fighting climate change, but said reducing funding for fossil fuel extraction would take time and more works need to be done to reach net zero emissions.
In a rare meeting, MPs grilled the heads of Royal Bank of Canada (RY.TO), opens new tab, TD Bank (TD.TO), opens new tab Bank of Montreal (BMO.TO), opens new tab, Bank of Nova Scotia (BNS.TO), opens new tab and CIBC (CM.TO), opens new tab appeared via videolink before a House of Commons committee to answer questions about any steps their banks are taking to help reduce greenhouse gas emissions and steer away from fossil fuel funding.
Canadian banks, among the biggest oil and gas financiers in the world, have come under pressure over recent years with demands to change their lending practices that contribute to climate change.
The five banks financed about $104 billion to fossil fuels last year, 13% of the value of the deals covered from global banks, according to a recent report.
The banking and oil and gas industries contribute roughly about 3% to 5% to Canada’s gross domestic product.
“Energy is still a big part of the Canadian economy. And therefore, we have to continue to support the economy as we make the transition, you have to do both, can’t just do one,” RBC CEO Dave McKay said in response to a member of parliament’s questions.
The banks have all set climate goals but members questioned the lack of commitment to only finance companies if the projects are verified to have an impact that will reduce the greenhouse gas emissions significantly.
“I think that’s part of the problem- is that the commitments are vague. We’re talking about sustainable investments. There’s no real definition around it. There’s not a lot of transparency around it,” MP Leah Taylor Roy said.
The banks’ short and long-term emissions reduction targets includes net-zero in operations and financed emissions by 2050, while helping clients to make the transition.
Canada, the world’s fourth-largest oil producer, has pledged to cut greenhouse gas emissions 40% to 45% below 2005 levels by 2030.
TD’s CEO Bharat Masrani said it would follow an “orderly transition” and support responsible oil and gas industry responsible while making sure the bank provides capital and investment to move to a net-zero world.
Meanwhile, environment activists criticised the lack of a commensurate plan of action.
“The investments they make are holding the country back from climate progress and, until now, there had been no signs they would be held to account,” said Julie Segal, senior manager of climate finance at Environmental Defence Canada said.
