Will Canada’s big banks live up to their climate commitments? Details on plans are thin

Corporate commitments to become net-zero by 2050 became so trendy this year, Canada's big banks made them twice.

Corporate commitments to become net-zero by 2050 became so trendy this year, Canada’s big banks made them twice.

First came a string of promises one by one, starting with TD Bank late in 2020 followed by the other banks throughout 2021. In November, they all recommitted to the goal as they joined former Bank of Canada governor Mark Carney’s Glasgow Financial Alliance for Net Zero.

But while the round numbers seem like a neat solution, the U.N. and others have emphasized that much of the heavy lifting on emission reductions needs to happen this decade, and only through details to be released in the next year or so will it start to become clear how quickly Canada’s big banks are prepared to move.

Pressure is certainly mounting as Canadians live through the very real effects of climate change, and activists increasingly focus their efforts on the financing behind fossil fuel production.

Governments are also increasingly moving toward climate action, including the huge shift in direction brought by U.S. President Joe Biden, raising the spectre of regulation if the industry doesn’t change fast enough.

And the finance industry is increasingly talking about the importance of action, and putting the standards and data together that will allow for potentially meaningful moves on climate change.

“There’s nobody who’s not aware of it, there’s not a single continent that isn’t deeply impacted,” said Margaret Franklin, chief executive of the CFA Institute, which put out sustainable investment disclosure guidelines in November.

“That urgency is starting to create co-operation. So where we would have seen a cluttered, disjointed, chaotic disposition, everybody coming out with everything, now you’re starting to see the centrifugal force of consolidation.”