Canada's Big Five banks' fossil-fuel exposure outpaces U.S., European peers
Canada’s biggest banks are more than twice as exposed to the fossil-fuel business as their European and United States counterparts, according to a report from climate-change think tank InfluenceMap.
The country’s largest lenders — Royal Bank of Canada, Toronto-Dominion Bank, Bank of Nova Scotia, Bank of Montreal and Canadian Imperial Bank of Commerce — committed 18.4 per cent of their combined corporate lending and bond and equity underwriting to the sector in 2022, says the report, published Wednesday.
In contrast, fossil-fuel entities accounted for 7.2 per cent of overall financing among the largest banks in Europe and six per cent at the biggest U.S. lenders, said Daan Van Acker, program manager at FinanceMap, a research program run by the London-based organization.
The five Canadian banks committed most of the financing to domestic oil and gas companies, the report found, with pipeline operators Enbridge Inc. and TC Energy Corp. and oil producer Cenovus Energy Inc. receiving a combined $61.9 billion in financing via the Big Five banks between 2020 and 2022.
The report was critical of the lenders for not setting policies to exclude new oil and gas investments or to phase out the financing of thermal coal, which is used for power generation.
“Given Canada’s position as one of the largest producers of oil and natural gas, Canadian banks have an integral role to play in supporting the transition away from fossil fuels,” the report said.
Canada was the world’s fourth-largest producer of crude and other petroleum liquids in 2022, ranking just ahead of Iraq, according to the U.S. Energy Information Administration. The oil and gas extraction sector averages about five per cent of Canada’s gross domestic product, according to
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