VANCOUVER – Despite Canada’s climate change commitments, the country’s “big five” banks continue to finance and support expansion of fossil fuel industries, says a new Corporate Mapping Project report released today.
The extent of the banks’ support since the oil price collapse in 2014 shows how that this backing hinders Canada’s progress on reducing emissions, report author and academic Donald Gutstein writes.
“When the banking sectors in many other countries committed to helping the world meet the goals of the Paris Agreement on climate change, the big Canadian banks did not join in,” says Gutstein. “Their record makes it clear why—they are continuing to rely on profits from financing the fossil fuel industry despite the danger those investments pose for the future of our planet.”
The report looks at the banks’ financing of the fossil fuel sector and finds it has not only been maintained, but has continued to grow.
“Canadian banks provided record-high financing to the fossil fuel industry in 2020 through a massive $137 billion in lending and lending commitments,” says Gutstein. “In addition, they invested $54 billion of their clients’ money in fossil fuel and pipeline company shares in 2019. These forms of financial support from the banks are allowing fossil fuel development, and therefore emissions, to continue to grow.”
Two of the banks, TD Bank and Royal Bank of Canada, recently pledged to reach net-zero emissions by 2050, but recent actions call into question the sincerity of these commitments.
“Despite committing to net-zero emissions by 2050, TD and Royal Bank have been two of the banks providing the highest levels of support to fossil fuel corporations,” says Gutstein. “TD increased its lending to the industry by 160 per cent over seven years to a total of $33 billion in 2020, and Royal Bank invests the most in fossil fuel and pipeline companies to a tune of $21 billion as of November 2019.”
The report also highlights the various non-financial ways the banks support fossil fuel corporations, including through interlocking directorates, executive transfers, conference sponsorships and public boosterism of the industry.
“The banks and the fossil fuel industry are deeply intertwined in Canada,” says Gutstein. “Banks have the potential to make a real impact in helping Canada meet our emissions reduction targets, but so long as that close relationship exists, progress will be difficult. It’s past time the banks treated climate change like the threat it is.”