Canada’s big five banks will be forced out of the United Nations’ net zero banking club unless they present a credible plan to phase out support for fossil fuels and significantly increase their 2030 greenhouse gas reduction targets, according to a new report from Greenpeace Canada.
“The UN has called their bluff, and now Canada’s big banks must either get serious about phasing out their support for fossil fuels or get kicked out of the Glasgow Financial Alliance for Net Zero,” said Keith Stewart, senior energy strategist with Greenpeace Canada. “The banks’ current commitments fall woefully short of what the UN has set as a minimum standard.”
RBC, Scotiabank, TD, CIBC and BMO all joined the Glasgow Financial Alliance for Net Zero (GFANZ) in October 2021, which committed them to aligning their lending and investment portfolios with a science-based pathway to net zero by 2050. Yet in 2021, they increased funding to fossil fuels and all 5 banks now lie within the 20 largest funders of fossil fuels in the world.
Following repeated expressions of concern about greenwashing, the UN issued a clarification in June 2022 of the criteria for membership in GFANZ and other UN-backed Race to Zero initiatives [1]. The new criteria makes it clear that Canadian member banks must “phase down and out” support for unabated fossil fuels in line with a science-based pathway like the IEA’s 2021 Net Zero scenario, and commit to a minimum 50 percent cut in financed emissions by 2030. They are also required to align their lobbying and public relations campaigns with these more stringent targets.
The new report, Racing to Zero? Canadian Banks’ Dubious Net Zero Commitments, assesses the current commitments made by the banks and finds they fall far short of the UN criteria [2].
The UN is establishing a process for kicking out members who don’t meet their criteria [3] and that’s given them until June 15, 2023 to publish a plan on how they will do so. Rather than seeking to weaken the application of Race to Zero criteria [4], Greenpeace Canada is calling on Canadian banks to meet the UN deadline for releasing a plan on phasing out fossil fuels, increase their 2030 reduction target to at least 50 percent and stop advocating for oil production increases. These climate plans should integrate respect for Indigenous rights and strategies to protect and restore biodiversity as core elements [5].