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CALGARY - Even as a growing number of activists urge financial institutions to take action against climate change by reducing funding to the fossil fuel sector, executives with Canada’s largest bank say this country won’t reach its net-zero goals without the oil and gas sector.
In the past two years, Canadian banks have increased the amount of sustainability-linked financing (SLF) they extend to oil and gas clients. SLF refers to financing whose cost changes when certain environmental, social and governance (ESG) requirements are met at the company level but does not require the funds themselves to be used for climate-friendly purposes.
Canada’s banks just started on the path toward zeroing-out the carbon emissions of the companies they lend to, and already they’re running into conflicts between what climate activists and ESG investors want and what Canada’s oil-dependent economy demands.
Canada's big banks are still major funders of the fossil fuel industry. It remains to be seen how quickly they are prepared to move toward net zero
Canada's big banks are still major funders of the fossil fuel industry. It remains to be seen how quickly they are prepared to move toward net zero