A group of investors has filed a complaint with the Financial Markets Authority and the Ontario Securities Commission against five Canadian banks that have pledged to reduce their emissions to zero while continuing to invest in companies that increase their polluting emissions.
According to Investors for Paris Compliance, which closely monitors the environmental commitments of Canadian public companies, the banks involved have all set quantitative emissions reduction targets, but do not provide any information on the results of their strategy.
“On the other hand, there are examples of sustainable financing operations that have resulted in an increase in emissions,” the complaint specifies. In short, the practice of greenwashing in this sector is widely recognized.
The financial institutions targeted by the complaint are Royal Bank, BMO, TD, CIBC and Scotia.
The five institutions joined the Net Zero Banking Alliance in 2021 and have committed to achieving the goal of net zero financed emissions in 2050. Green bonds and other sustainable financing instruments are being used and deployed to achieve this goal.
“Several examples show that sustainable financing operations implemented by banks contributed to increasing emissions rather than reducing them,” according to the complaint, which specifies that the majority of sustainable financing operations are not public.
However, Investors for Paris Compliance point to examples, including a $1 billion sustainable development-linked loan by Royale and CIBC to Enbridge that was used for the pipeline expansion project, Line 3, “which we estimate will have the same impact.” climate change, such as adding 50 new coal-fired power plants.
The organization is calling on regulators to investigate the five banks' sustainable financing practices and force them to disclose the impact of the measures they include in their annual emissions reports.
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