Canada's big banks say sustainable finance pledges may not curtail emission growth

investing.com:

By Nivedita Balu

TORONTO (Reuters) — Some of Canada's biggest banks have admitted for the first time that their climate-related finance efforts may not necessarily curtail emissions growth, following years of pressure from climate activists for banks to be more transparent about their claims on climate goals.

Canadian banks, said to be one of the biggest fossil fuel financiers globally, have drawn criticism from climate activists and investors for years claiming they are using sustainability-linked financing (SLF) merely for pretence of a lower carbon footprint rather than take meaningful steps in that direction.

In their latest annual climate reports released over the past week, many Canadian banks have pledged billions of dollars in sustainable financing to decarbonize high-emitting sectors, while highlighting major challenges to meeting their goals.

Bank of Nova Scotia, CIBC and TD noted that their sustainable finance targets may not necessarily curtail the growth of emissions.

«The question for regulators will be whether it's enough for the banks to insert these brief disclaimers deep in their ESG reporting or whether they need to do a better job telling their investors and the public that these huge financial numbers they promote as green aren't necessarily adding up to emissions reductions at all,» said Matt Price, executive director of Investors for Paris Compliance.

In January, the group urged securities regulators to investigate major Canadian banks on their climate-related claims and alleged misleading disclosures.

The complaint gave climate activists more fuel in their fight, that is part of a broader international push for accountability on corporate climate pledges.

Price said the latest revelations were