SOCIAL JUSTICE
INVESTING IN
DISASTER Banks are boosting emissions by funding fossil fuels Canadian banks continued financing of the fossil fuels industry coincides with increased greenhouse gas emissions in Canada. PHOTO FROM PEXELS CHRISTIAN KINDRACHUK
ckindrachuk@cjournal.ca
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ompared to banks in other countries, those in Canada have poor climate policies that result in them investing billions into greenhouse gas emitting fossil fuels projects. Some of those banks are taking steps to gradually make their climate change policies better. However, individuals can help speed that process by putting pressure on banks to change their policies and practices so they are in line with international commitments to help reduce greenhouse gas emissions. The poor environmental performance of Canadian banks was highlighted in a report prepared by the Rainforest Action Network, a San Francisco-based group dedicated to protecting climate and challenging corporate power. According to that report, the 35 banks it surveyed “have together funded US$2.7 trillion into fossil fuels in the four years since the Paris Agreement was adopted” - a legally binding international treaty
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that commits signatories to limit global warming to well below two degrees Celsius. As a result, the report concluded “the private banking sector as a whole continues to take a position of extreme irresponsibility in the face of the climate crisis.” However, even by this low standard, Alison Kirsch, one of the report’s lead architects, said Canadian banks are lagging behind in their policies and practices, having failed to follow the climate leadership of European banks such as Crédit Agricole, RBS and UniCredit by phasing out fossil fuel financing. As a result, Canadian banks ranked the lowest in their climate policies. Toronto Dominion (TD) got the best score out of the Canadian banks with three points out of the 200 available to be given. The other banks - Scotiabank, the Bank of Montreal and the Canadian Imperial Bank of Commerce were even lower, being awarded just half a point. While Canadian and United States banks are peers in the banking sector, Kirsch notes the clearest difference in their policies can
be found around coal. “It’s just the fossil fuel that’s kind of most agreed to have no place in a climate stable future, and the Canadian banks really have very few policies on coal.” While coal is one fossil fuel that contributes to climate change it’s not alone. Oil and gas are also warming the planet, along with emissions from other sources such as raising livestock and logging forests. Those emissions need to be reduced around the world to curb the impacts climate change will have, as outlined in the Intergovernmental Panel on Climate Change (IPCC) 2018 special report. Those impacts will include more flooding and droughts across Canada, as well as increased global conflicts and mass migration. While emissions need to go down, the connection between increased investments from banks in fossil fuels and increased emissions in Canada is evidenced by a report from the Canadian Energy Regulator. The report from 2020 highlights the
change that needs to happen in order for Canada to reach its international commitments and achieve net zero emissions by 2050. However, it shows how much oil sands emissions have gone up over the past decade instead of down. “In 2005, the oil sands accounted for approximately five per cent of Canada’s GHG emissions. By 2018, it increased to approximately 11 per cent. Absolute oil sands emissions increased by 51 per cent from 2011 to 2018,” read the report. The banks continued funding of oil sands projects provide little incentive for that to change, even as demand for their product declines. “Acknowledging oil demand will not disappear overnight, most outlooks predict demand will plateau or decline within the next decade,” states a report from the environmental Pembina Institute. “Subsequent global shifts toward lowerintensity energy options are likely to put more carbon-intense crudes — such as the bulk of oilsands products — at risk over the next decade.”
