Big banks' 'sustainable finance' label misleading: securities complaint
TORONTO — Canada’s Big Five banks are potentially misleading investors with their use of terms like sustainable finance, according to a complaint to securities regulators by a climate advocacy group.
Banks are using the term “sustainable finance” too broadly and not backing up the claims with data, Investors for Paris Compliance said in its submission Jan. 9 to the Ontario Securities Commission and the Autorite des marches financiers of Quebec.
Canadian banks including Royal Bank of Canada, Toronto-Dominion Bank, Bank of Montreal, Canadian Imperial Bank of Commerce and Bank of Nova Scotia have all made pledges on sustainable finance that together total $2 trillion by 2030.
Sustainable finance covers a range of lending activities aimed at advancing mostly environmental and social causes. The financing can be anything from green bonds funding a specific renewable energy project to loans that go to general corporate use but are tied to sustainability-linked performance targets.
The commitments form a key part of their sustainability efforts, but banks are providing little to back up their effectiveness, said Matt Price, executive director of Investors for Paris Compliance.
“They’re putting this in the window as one of their core responses to climate change and net zero, when they’re not rationalizing or justifying or providing any evidence or proof about that.”
The advocacy group is concerned not only with the overall lack of disclosure, but that some of the deals that have been disclosed have been with oil and gas companies whose emissions are on the rise.
In 2021, RBC, CIBC and Scotiabank were all involved in sustainable finance deals with Enbridge Inc. as the company was expanding its oil export capacity, while BMO
Read more on financialpost.com
