Canada’s Big Banks Face MPs Over Their Financing of the Climate Crisis

OTTAWA/UNCEDED TRADITIONAL TERRITORY OF THE ALGONQUIN ANISHINAABEG PEOPLE – The House of Commons Standing Committee on Environment and Sustainable Development (ENVI) will be hearing from the CEO’s of Canada’s Big Five banks (Royal Bank of Canada (RBC), Toronto Dominion Bank (TD), Canadian Imperial Bank of Commerce (CIBC), Bank of Montreal (BMO) and Scotiabank), as part of its study of the impact of the Canadian financial system on the climate and the environment. 

Ecojustice, Greenpeace Canada, Stand.earth, Environmental Defence Canada, Keepers of the Water, Leadnow, For Our Kids, and Change Course call on the five major Canadian banks to take responsibility for the impact of their investments in fossil fuels, which are exacerbating the climate crisis. 

This unprecedented summons follows mounting evidence that Canadian financial institutions are fueling the climate crisis while hiding behind empty “Net Zero” pledges. 

Canadian banks remain among the biggest backers of fossil fuels in the world and are lagging behind in clean energy financing. RBC is under investigation by Canada’s Competition Bureau for allegations of “greenwashing”. Securities complaints in Ontario and Quebec for misleading information about their sustainable financing activities have also been filed against all of the Big Five. 

Canadian banks’ support for fossil fuels is undermining Canada’s prospects of meeting its greenhouse gas targets, exposing the whole economy to unacceptable climate risk, and missing out on a golden opportunity to profit from the energy transition. Now more than ever, the financial industry must be aligned with the country’s climate objectives. RBC, TD, CIBC, BMO and Scotiabank must commit to being part of the solution. 

The work of the ENVI Committee is running in parallel with the Senate’s study of Bill S-243, the Climate-Aligned Finance Act (CAFA). Testimony from renowned experts highlighted the growing importance of sustainable finance internationally, the urgency of aligning finance and climate, and the lack of progress on these issues in the Canadian financial and political ecosystem. 

Former Governor of the Bank of Canada, Mark Carney’s testimony to the Senate Standing Committee on Banking, Trade and Commerce warned that Canada’s financial sector “significantly lag[s] international peers” in climate disclosures and that “Canada risks falling behind” on transition planning. The sector’s lack of regulation represents a real risk to Canada’s competitiveness to attract the sustainable finance needed to future-proof our economy.

If Canadian banks are serious about their transition, they need to take responsibility for the environmental and climate impact of their investments. They must also support the adoption of a framework that aligns their activities with Canada’s climate commitments such as CAFA. 

QUOTE SHEET

Richard Brooks, Climate Finance Director at Stand.earth: 

The House of Commons summoning the CEOs of Canada’s biggest fossil fuel financing banks to answer for continued financing of dirty industries, particularly oil and gas, is unprecedented. As we experience increasingly year-round extreme weather enabled by these banks’ over-financing of fossil fuels, this hearing must escalate accountability for climate damages that communities are enduring coast-to-coast. Just as Big Tobacco and Big Oil hearings led to increased regulation and accountability, this kicks-off moving toward financial regulations for Canadian banks to be part of climate solutions and stop worsening the crisis.

Tori Cress, Communications Manager at Keepers of the Water: 

For Indigenous Peoples, banks’ investment in tar sands development means funding climate chaos, displacement, deforestation, poisonous water, toxic tailings, cancer, criminalization, and the further colonization of our bodies, minds, and homelands. The Parliamentary Standing Committee on Environment and Sustainable Development (ENVI) hearing is an opportunity for this committee to cut through banks’ greenwashing and rewashing—public relations attempts to use climate action and the reconciliation project to distract from the financing of fossil fuels and human and Indigenous rights violations. This is a unique moment for immediate, meaningful government intervention and the centring of Indigenous traditional knowledge in financial decision-making, where there’s still hope for a balanced and justice-led energy transition for generations to come.

Karine Péloffy, Sustainable Finance Project Lead at Ecojustice: 

It’s up to Canadian banks to demonstrate to the public that they are part of the solution. The Banking on Climate Chaos report unequivocally illustrates their failure to take responsibility for their exposure to fossil fuels, despite their promises to do so. The Big Five banks have a choice: either work with legislators to chart a change of course or have new laws – like the Climate-Aligned Finance Act –imposed on them.

Keith Stewart, Senior Energy Strategist at Greenpeace Canada: 

We would be fools to believe that banks are going to do the right thing on climate change out of the goodness of their hearts, any more than we would expect them to pay their taxes if we made that optional. The time for asking politely is over. We need our elected officials to regulate the banks so that the immense financial resources they control help, rather than hinder, in the fight against the wildfires, floods and ever-more extreme storms that come with unchecked climate change.

Julie Segal, Senior Manager, Climate Finance at Environmental Defence Canada:

While each of the Canadian banks have climate commitments, none of them have a commensurate plan of action. The investments they make are holding the country back from climate progress and, until now, there had been no signs they would be held to account. The House of Commons summoning the banks’ CEOs to explain their overinvestment in oil and gas, and underinvestment in clean climate solutions, is momentous. New rules are needed to ensure the banks start helping instead of hindering our climate progress, like by implementing the Climate-Aligned Finance Act, and requiring credible plans from these banks to cut emissions and build resilience.

Gabrielle Willms, Organizer at For Our Kids:

As families face another summer of wildfires, drought and extreme weather events and struggle with the rising cost of living, parents are fed up with Canada’s big banks continuing to fund the climate crisis. Since the Paris Agreement in 2015, Canada’s 5 big banks have invested over $1.1 trillion in fossil fuels, all while greenwashing their business and misleading regular Canadians about their climate commitments. Parents want to see real accountability from banks, investment in climate solutions and strong financial policy to bring our financial system in line with a green, just future for our kids. 

Levi Clarkson, Campus Organizer at Change Course:

Students and young people are deeply concerned about our futures, which are being wrecked by the Big 5 Canadian banks’ unchecked financing of fossil fuel extraction projects that are driving the climate crisis. Until big banks take tangible action to divest from fossil fuels and stop financing projects that violate Indigenous rights across the globe, they are not welcome on our campuses. If the Canadian government truly cares about young people, then we urge them to act swiftly to ensure that Canadian banks change course and stop funding climate chaos.

Cheryl Randall, Campaigns Manager at Leadnow: 

This hearing is a crucial moment to shine a spotlight on Canada’s biggest banks – the world’s biggest financiers of the fossil fuel industry – and their complicity in fuelling the climate crisis. As we face the prospect of Canada’s most intense wildfire season and the stay-inside advisories, evacuations, lost homes & communities that will follow, Canada’s banks’ addiction to fossil fuels is increasingly impossible to justify. The time for hoping and praying that banks act to meet Canada’s climate commitments is over. The government needs to act and ensure our banks are in line with sustainable finance practices. 

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