A recent study revealed that Canadian major banks provided financing totaling around $200 billion for fossil fuel ventures last year, in contrast to approximately $104 billion allocated to low-carbon energy initiatives. The report by BloombergNEF, an energy transition research firm, emphasized the distribution of global bank funding between traditional oil, gas, and coal projects versus sustainable options like wind, solar, and electric infrastructure to assess financial institutions’ contribution to or hindrance of the transition.
Globally, BloombergNEF found that banks maintained a ratio of 89 cents toward low-carbon investments for every dollar allocated to fossil fuels in 2024, a consistent rate compared to the previous year. Lead author Trina White noted that this ratio is not accelerating at the necessary pace to meet climate targets worldwide.
In Canada, the ratio for the country’s prominent Big Six banks stood at 0.61 to 1 last year, a decline from 0.67 to 1 in 2023. The disparity in funding distribution among the banks varied, with some showing increased support for renewables while others regressed.
The Canadian Bankers Association spokesperson, Nathalie Bergeron, highlighted that banks support diverse projects across sectors and are dedicated to aiding clients in their transition efforts to address climate change strategically.
Excluding National Bank, which notably prioritized renewables over fossil fuels, the combined ratio for the remaining major lenders was 0.49 to 1 in 2024, compared to 0.47 to 1 in the previous year. While RBC committed to disclosing its energy supply ratio, the bank decided against publicizing it due to new greenwashing regulations. Scotiabank, on the other hand, plans to release its findings next year.
RBC, which aims to provide $35 billion in low-carbon financing by 2030, led the Big Five banks with a ratio of 0.61 to 1. The bank’s spokesperson, Sarah Kennedy, emphasized their commitment to supporting clients in transitioning to a sustainable economy while prioritizing key sectors.
Despite some banks’ efforts to disclose their clean-energy finance ratios, TD Bank Group faced criticism for having the lowest ratio among its Canadian counterparts, with only 31 cents directed toward low-carbon energy for every dollar invested in fossil fuels. The bank did not respond to requests for comment.
Richard Brooks, the climate finance program director at Stand.earth, expressed concerns over the lack of substantial progress from banks in meeting net-zero emissions commitments by 2050. Brooks called for governmental intervention to enforce regulations on banks and urged misled investors and customers to demand behavioral changes.
While acknowledging the strides made by certain banks, such as BNP Paribas with a favorable ratio of 2:1 for low-carbon energy, Brooks emphasized the need for a collective shift in the banking sector to align with climate goals. Canada’s major banks have collectively targeted achieving net zero financed emissions by 2050.
