I probably won’t say anything here you don’t already know in your bones, but here goes – the banks of the world financing fossil fuels has been climatically imprudent for sometime, and is now officially immoral.
A huge amount of our energy mix still comes from fossil fuels (including the gasoline which took me to this morning’s dental appointment) and for most of us, it can’t yet be helped. As individuals we are at the mercy of a market which still offers alternatives at a premium, and until our transition to clean power runs its course, fossil fuels will remain a contender in our energy diets. But the transition is happening, supported not only by economic forces but by the deliberate workings of government and industry. We need to do away with fossil fuels, in all their forms, as quickly and painlessly as possible, and that’s hard to do when the world’s wealthiest banks are propping them up. But some banks are getting the message.
In mid November we learned the European Investment Bank (EIB) has agreed to eliminate financing for fossil fuels over the next two years, redirecting many billions of relevant dollars, some of which were flowing to Canada’s oil industry. In its announcement, this bank cited the climate crisis, saying this was its first step of many away from carbon intensive investing. EIB is the world’s largest multilateral financial institution, and by 2022, intends to become the world’s first “climate bank.”
By the same token, the Zurich Insurance Group, one of the largest insurance companies on the planet, announced this past June it would no loner underwrite or invest in companies which generated 30 per cent or more of their revenue from oilsands oil, another blow to Canada’s fossil fuel sector which, recently, admitted to a rough year in The Canadian Press.
But while Canada is a major supplier in the world’s oil addiction, our domestic banks have fallen short of bold action. A 2019 report from the Rainforest Action Network, Oil Change International and others, demonstrates that, of the 33 banks responsible for $1.9 trillion in fossil fuel financing globally from 2016-2018, five were Canadian, most of which were high on the list.
CIBC was 22nd overall with $37.4 billion in financing over the aforementioned three years; BMO was 15th with $56.6 billion; Scotiabank was 9th with $69.6 billion; TD was 8th with $74.2 billion; and RBC was 5th globally with $100.5 billion. Together they’re supporting the fossil fuel sector within Canada and without, tied into the Alberta Tar Sands, drilling in the Arctic, fracking and coal, making possible projects which would otherwise have not found funding, and lengthening the lifespan of our most destructive industries. The long term consequences to human health and indeed human life inherent in these dollars, can no longer be explained away. As with all of us, fossil fuels have become a habit for these banks, but there’s a moral imperative now to do better. So far, only Scotiabank has shown signs of life.
On the same day EIB announced its phasing out of fossil fuel financing, so too did Scotiabank commit $100 billion by 2025 to address climate change within their purview. These efforts will entail the retraining of staff to recognize the carbon intensity of the commercial and corporate clients, and other initiatives aimed at lessening Scotiabank’s own carbon footprint. Importantly, this did not come with a commitment to phase out fossil fuel financing, which is what must happen, but the outcome of this announcement is for better minds to predict than mine.
This time last year, when the fossil fuel financing of our largest banks first crossed my desk, I promptly closed my account with BMO, with whom I’d banked my entire adult life, and moved my money to the nearest credit union, whose financing is so safely local as to preclude oilsands, Arctic drilling, shattered shale and the rest. I did this to send the message, no matter how quietly, that a sustainable climate means more to me than the services and convenience of BMO, and that their $56.6 billion in support of fossil fuels is a mark against their character.
I know others who have sent similar messages, to their banks, their universities, their governments and elsewhere, that the financing, investing or subsidizing of fossil fuels is no longer a victimless endorsement, and I applaud all such declarations. If we are to hang onto the prosperity we’ve built here in Canada, in part with the help of fossil fuels, then we absolutely must go on without them. The transition is coming, and it’s time we stopped betting against it.
Zack Metcalfe is a freelance journalist, columnist and author active across the Maritimes.
Shown above are the Alberta Oil Sands. (Howl Arts Collective photo (CC BY 2.0)