A recent study revealed that Canadian major banks provided approximately $200 billion in funding for fossil fuel ventures last year, in contrast to around $104 billion allocated to low-carbon energy projects. The research by BloombergNEF focused on the proportion of global bank financing directed towards oil, gas, and coal initiatives compared to investments in sustainable options like wind, solar, and electrical infrastructure to assess the role financial institutions play in the energy transition.
Globally, banks maintained a ratio of 89 cents towards low-carbon assets for every dollar channeled into fossil fuels in 2024, a rate consistent with the previous year. However, the lead author of the report, Trina White, noted that this ratio is not escalating swiftly enough to align with international climate targets.
In Canada, the Big Six banks displayed a ratio of 0.61 to 1 last year, a decline from 0.67 to 1 in 2023. Despite this overall trend, some banks exhibited an increase in financing for renewables while others experienced a decrease. The Canadian Bankers Association’s spokesperson, Nathalie Bergeron, emphasized that banks in Canada are dedicated to supporting clients in their transition efforts to combat climate change strategically.
Excluding National Bank, which notably surpassed the other major lenders by funding more renewables than fossil fuels, the ratio for the remaining banks in 2024 was 0.49 to 1 compared to 0.47 to 1 the previous year. RBC had pledged to disclose its energy supply ratio but later decided against public release due to new greenwashing regulations, while Scotiabank plans to unveil its findings in the upcoming year.
Ranking the Big Five banks, RBC emerged as the top performer with a ratio of 0.61 to 1 and a commitment to provide $35 billion in low-carbon financing by 2030. RBC’s spokesperson, Sarah Kennedy, emphasized the bank’s ambition to lead the transition to a sustainable economy by supporting clients in key sectors. Notably, TD Bank Group exhibited the lowest ratio among its Canadian counterparts, allocating 31 cents towards low-carbon energy for every dollar invested in fossil fuels.
Richard Brooks, the climate finance program director at Stand.earth, expressed disappointment in the lack of progress from banks in their voluntary actions towards achieving net-zero financed emissions by 2050. Brooks urged for government intervention to enforce regulations on banks and for misled investors and customers to demand a change in behavior. He highlighted BNP Paribas as a positive example with a 2:1 ratio in favor of low-carbon energy.
Canada’s major banks have collectively committed to achieving net zero financed emissions by 2050 in alignment with global climate objectives.