Climate group urges regulatory investigation
Canada’s largest banks might be misleading consumers and the general public when using labels like “sustainable finance” for their products, according to climate advocacy group Investors for Paris Compliance.
In a petition submitted earlier this week to the Ontario Securities Commission and the Autorité des marchés financiers of Québec, Investors for Paris Compliance argued that the top banks’ deployment of green-adjacent terms is not supported by any verifiable data.
“They’re putting this in the window as one of their core responses to climate change and net zero, when they’re not rationalizing or justifying or providing any evidence or proof about that,” said Matt Price, executive director of Investors for Paris Compliance.
Among the top banks that have made commitments to sustainable finance – which cover a broad umbrella of activities and products including green bonds and loans specifically for sustainability initiatives – are BMO, CIBC, RBC, TD, and Scotiabank.
Combined, these banks’ sustainable finance pledges amount to $2 trillion by 2030, The Canadian Press reported.
The stocks of Canadian banks have seen a significant uptick despite issues such as the country’s economy stalling, a rising unemployment rate, and housing costs.
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Investors for Paris Compliance called on regulators to provide greater oversight and ensure transparency when it comes to banks’ statements and disclosures involving sustainable finance.
Price stressed that the “sustainable financing” term should have a much more rigid rubric that disqualifies companies involved with oil and gas production.
“It’s a pretty basic question, right?” Price said.
The named banks have yet to provide direct comment as of press time.
Canadian Bankers Association spokesperson Maggie Cheung said that the Canadian banking sector adheres to North American market standards on environmental disclosure and other similarly crucial transparency drives.
“Banks in Canada understand the important role that the financial sector has in an orderly transition to a low-carbon future,” Cheung said. "Sustainable finance is one tool for helping companies mobilize capital toward this effort and a range of other environmental and social goals.”
