TORONTO (Reuters) – The heads of Canada’s five largest banks on Thursday reassured MPs of their commitment to combating climate change but said cutting back on fossil fuel financing will take time and more work needs to be done to achieve net-zero emissions.
In a rare meeting, MPs grilled the heads of Royal Bank of Canada, TD Bank Bank of Montreal, Bank of Nova Scotia and CIBC, who appeared via video link before a House of Commons committee to answer questions about any steps their banks are taking to reduce greenhouse gas emissions . gas emissions and avoid fossil fuel financing.
Canadian banks, which are among the world’s largest oil and gas financiers, have come under pressure in recent years to change their lending practices, which contribute to climate change.
Five banks financed about $104 billion in fossil fuel development last year, representing 13% of the value of deals done with global banks, according to a recent report.
The banking and oil and gas industries account for approximately 3% to 5% of Canada’s gross domestic product.
“Energy continues to be a significant part of the Canadian economy. And so we must continue to support the economy during the transition. You have to do both, you can’t just do one,” RBC CEO Dave Mackay said in response. to the deputy’s questions.
All banks have set climate targets, but members questioned the lack of commitment to fund companies only if projects can be proven to have an impact that results in significant reductions in greenhouse gas emissions.
“I think part of the problem is that the obligations are vague. We’re talking about sustainable investing. There is no real definition here. There’s not a lot of transparency around it,” said MP Leah Taylor Roy.
Banks’ short- and long-term emissions reduction goals include achieving net-zero operations and financed emissions by 2050, and helping customers make the transition.
Canada, the world’s fourth-largest oil producer, has pledged to cut greenhouse gas emissions 40% to 45% below 2005 levels by 2030.
TD CEO Bharat Masrani said he would pursue an “orderly transition” and support a responsible oil and gas industry, while ensuring the bank provides capital and investment for the transition to a net-zero emissions world.
Meanwhile, environmental activists have criticized the lack of an adequate action plan.
“The investments they are making are holding the country back from climate progress, and so far there has been no sign that they will be held accountable,” said Julie Segal, senior manager of climate finance at Environmental Defense Canada.