An investor group has criticized Canadian lenders for investing heavily in fossil fuels despite the Paris Agreement, noting that all of the largest Canadian banks still need to be ready for net zero.
In a report titled Net Zero Policy Report Card, Investors for Paris Compliance graded Canada’s largest banks on several indicators, including fossil fuel investments, climate targets, and emissions reporting.
In fossil fuel investments, all banks were revealed to have increased their exposure between 2020 and 2021, by between 25 percent—TD and BMO—and 132 percent for CIBC.
According to the report, RBC invested $48.5 billion in fossil fuels last year, up 101 percent on 2020, and Scotiabank increased its exposure to the sector by 87 percent to $38 billion.
TD’s fossil fuel investments rose to $26.4 billion, and BMO’s went up to$23.5 billion. CIBC invested $27.8 billion in fossil fuels in 2021, Investors for Paris Compliance said, noting that the sixth bank under review, National Bank, had no data published on its fossil fuel industry exposure.
The report is the latest example of investor pressure on financial institutions to reduce their lending to the fossil fuel sector and focus on emission reporting and reducing measures in line with international Paris Agreement commitments.
This, however, stands in stark contrast with warnings, including from the IEA, that not enough is being invested in the new supply of fossil fuels, including coal, which this year saw a real renaissance.
Despite this growing pressure from investors, banks around the world increased their exposure to fossil fuels last year. Earlier in 2022, a report produced by a group of climate nonprofits said that the world’s biggest banks had invested $742 billion in the fossil fuel industry, almost unchanged on 2020.
The level of financing was higher than in 2016 and 2017 despite the fact that the global economy was still in recovery mode after the pandemic, the report, released in March, said.