A group of investors has filed a complaint with the Financial Markets Authority and the Ontario Securities Commission against five Canadian banks that committed to reducing their emissions to zero while continuing to invest in companies that increase their emissions.
According to Investors for Paris Compliance, which closely monitors the environmental commitments of Canadian public companies, the banks in question all set quantitative targets for reducing emissions, but they provide no information on the results of their strategies.
“On the other hand, there are examples of sustainable finance activities that have led to an increase in emissions,” the complaint said. In summary, the practice of greenwashing is widely recognized in the field.
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 committed to achieving the goal of net zero financial emissions by 2050. Green bonds and other sustainable financial instruments are used and promoted to achieve this goal.
“Many examples show that sustainable finance activities conducted by banks have contributed to increasing emissions rather than reducing them,” according to the complaint, which notes that much of the sustainable finance activities are not public.
However, examples include a billion loan linked to sustainable development by Royal and CIBC banks to Enbridge, which was used for the expansion project of the pipeline, Line 3. “We estimate that adding 50 new coal-fired power plants will have the same climate impact.
The organization is calling on regulators to investigate the five banks' sustainable financial practices and force them to disclose the impact of the measures they list in their annual emissions reports.
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