The chief executives from Canada’s 5 largest banks confronted exhausting questions from MPs on Thursday over their local weather commitments and plans to assist spur transition to renewable vitality.
Representatives from RBC, CIBC, TD Bank Group, BMO Financial Group and Scotiabank appeared Thursday earlier than the standing committee on surroundings and sustainable growth. All 5 attended by video convention, avoiding an in-person listening to.
NDP MP Matthew Green took intention at David McKay, the top of RBC, the nation’s largest bank, for “touting” his local weather file, whereas “continuing to be one of the largest financiers of fossil fuels in the world.”
“This is a transition,” McKay mentioned in response.
“It’s a complex transition. We are not getting off fossil-based fuels immediately. To just stop is not an option for us. We have to commit to finding green sources of energy.”
Canadian banks have been criticized for the way gradual that transition has been, provided that they continue to be among the many largest financiers of oil, gas and coal globally.
A recent report calculated that Canada’s prime banks pumped a mixed $103.85 billion US into fossil gasoline tasks in 2023.
The 5 largest banks have made each short- and long-term emissions discount targets, together with net-zero financed emissions by 2050, however confronted questions on whether or not these are on monitor.
Another recent report, from InfluenceMap, a worldwide local weather coverage watchdog, discovered that Canada’s largest 5 banks haven’t aligned “their short- and medium-term emissions reduction targets with their long-term net zero commitments.”
Banks stress significance of oil and gas
None of the executives dedicated to limiting investments in the oil and gas sector to tasks that would cut back emissions, and a number of burdened the significance of the sector.
“Energy has been very important to the economy and will continue to be important to the economy,” McKay mentioned.
At one level, Brandon Leslie, a Conservative MP, targeted on how banks have made investments in renewable vitality with out being compelled by authorities.
He then requested Scott Thomson, the CEO of Scotiabank, if an oil and gas undertaking must be held to a distinct commonplace — apart from whether or not a mortgage will be paid again.
(A invoice proposed by Quebec senator Rosa Galvez might make it more durable for oil and gas tasks to safe financing.)
“I don’t think energy projects should be held to a different standard than that,” Thomson mentioned.
Thomson later added that Canada generally is a “leader in the energy transition,” however instructed oil and gas can proceed to play a task in the approaching years.
“We should move away from emissions reductions at all costs to a comprehensive strategy that encompasses all sources of energy,” he mentioned.
Banks accused of ‘fickle’ commitments
Thursday’s testimony comes per week after the identical committee questioned the CEOs of Canada’s top oil and gas producers. The committee is exploring how Canada can meet its dedication to scale back emissions.
Julie Segal, a local weather finance specialist with the advocacy group Environmental Defence, mentioned Thursday the banks’ “voluntary climate commitments have proven fickle” and extra laws are sorely wanted.
“We need credible climate transition transition plans from these banks and financial institutions, and since they are not designing these on their own we need rules to ensure they happen and are delivered.”
Scroll the most recent headlines and it’s simple to really feel local weather defeated, however between the missed targets and dire warnings are indicators of progress. CBC’s Nicole Mortillaro breaks down 3 ways the clear vitality transition is beginning to take form.
Galvez’s proposed invoice, often called the Climate-Aligned Finance Act, that will impose new guidelines on Canadian monetary establishments to verify they’re aligned with the nation’s local weather objective.
The invoice was tabled greater than two years in the past, however it stays on the committee stage in the Senate. It faces a number of extra hurdles earlier than it will be put to a vote in the Senate, and then make its strategy to the House of Commons.
The Canadian Bankers Association, which represents the nation’s largest banks, is opposed to the legislation, saying it will add pointless laws on the sector.