Canada’s major banks provided around $200 billion in funding for fossil fuel ventures in the past year, while only allocating roughly $104 billion towards low-carbon energy projects, a recent report reveals. The study, conducted by energy transition research firm BloombergNEF, analyzed the distribution of global bank investments in oil, gas, and coal compared to renewable sources like wind, solar, and electric grids to assess the financial sector’s role in facilitating the transition.
Globally, the ratio of bank funding for low-carbon initiatives to fossil fuels stood at 89 cents to the dollar in 2024, similar to the previous year, indicating a stagnant pace in alignment with climate objectives. The report’s lead author, Trina White, emphasized the insufficient rate of increase required to meet climate targets.
In Canada, the Big Six banks exhibited a ratio of 0.61 to 1 last year, down from 0.67 to 1 in 2023. While some banks showed an increased focus on renewable funding, others experienced a decline in their ratios. The Canadian Bankers Association’s spokesperson, Nathalie Bergeron, highlighted the banks’ commitment to aiding clients in their transition efforts to combat climate change across various sectors.
Excluding National Bank, which notably surpassed the others by financing more renewables than fossil fuels, the combined ratio for the remaining major lenders was 0.49 to 1 in 2024, slightly up from 0.47 to 1 in the previous year. RBC pledged to disclose its energy supply ratio but later decided against it due to new greenwashing regulations, while Scotiabank plans to reveal its findings next year.
Among the top five banks, RBC emerged as the leader, committing to $35 billion in low-carbon financing by 2030 and boasting a ratio of 0.61 to 1. The bank’s spokesperson, Sarah Kennedy, emphasized their support for clients in transitioning to a sustainable economy while prioritizing key sectors for investment.
TD Bank Group, however, lagged behind its peers with a ratio of 31 cents for low-carbon energy for every dollar allocated to fossil fuels. The bank did not respond to requests for comments on their funding strategies.
Climate finance experts, like Richard Brooks from Stand.earth, expressed disappointment in the lack of progress in bank actions towards net-zero emissions targets. Brooks called for governmental regulations to drive meaningful change in banks’ practices and urged misled investors and customers to demand accountability.
Despite the slow progress, some banks are making strides towards sustainable financing, with BNP Paribas cited as a positive example with a 2:1 ratio favoring low-carbon energy. Canada’s major banks have committed to achieving net-zero financed emissions by 2050, aligning with global climate goals.