Canada’s big banks lag on renewable energy investments
Canada’s financial institutions are falling short when it comes to the investment levels in renewables needed to reach net zero emissions, according to a new report.
Between 2016 and 2024, only three of the country’s largest banks, insurance providers, investment firms and pension boards hit a 2030 International Energy Agency target of having renewable energy account for 71 per cent of power-sector financing and investment, according to the report released Wednesday by Investors for Paris Compliance. The IEA target is part of a broader pathway to limit global warming to 1.5 degrees Celsius per the 2015 Paris Agreement, and to reach net zero by 2050.
Canada’s pension boards were some of the leaders in renewables: Caisse de Dépôt et Placement du Québec (CDPQ) and the Canada Pension Plan Investment Board met the IEA’s target for power-sector financing, and both have plans for a transition to net zero.
Big banks didn’t fare as well. Of Canada’s six largest banks, Bank of Nova Scotia ranked the lowest on renewable energy investing, the study found. National Bank of Canada, which in 2020 had 93 per cent of its electricity credit in renewables, has since seen those levels fall under the IEA threshold. Across Canada’s big banks, renewable credit financing increased by just one percentage point per year, on average.
“Despite all the banks assessed having made long-term, net zero commitments in 2021, and [having] adopted power sector-specific interim targets since, most have shown no real progress,” Investors for Paris Compliance wrote.
As of 2023, Canada had the world’s fourth-largest oil reserves and ranked as the fourth-largest petroleum producer, according to the U.S. Energy Information Administration, making banks’ commitment
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