Canada's Big Five Banks:
Heading to Net Zero?

A FinanceMap Report

March 2024

See coverage in Bloomberg, Financial Post, Canada's National Observer, Reuters, ESG News, Corporate Knights, BNN Bloomberg, The Canadian Press, Yahoo News

Assessments of climate governance, financing portfolios, and policy engagement

FinanceMap’s 2024 assessment of the Big Five Canadian banks shows that the firms are undermining their own net zero commitments through their financing activities, lack of robust sector financing policies, and inconsistent policy engagement. This is despite all five banks (Royal Bank of Canada, Toronto-Dominion Bank, Scotiabank, Bank of Montreal, and Canadian Imperial Bank of Commerce) being signatories to the Net Zero Banking Alliance (NZBA).

  • Notably, the banks’ fossil fuel financing activities and limited fossil fuel exclusion policies are highly misaligned with IEA and IPCC net zero pathways. Between 2020 and 2022, the Big Five steadily increased their fossil fuel financing exposure from an average of 15.5% in 2020 to 18.4% in 2022, facilitating a total of $275 billion (USD) in financing to fossil fuel value chain companies over this period. This compares with an average of 6.1% for leading US banks and 8.7% for European banks across the same period.
  • None of the banks have committed to a phaseout of financing thermal coal. Where they have put in place fossil fuel exclusion policies, these only apply to certain unconventional oil and gas activities. Meanwhile,the Canadian oil and gas sector has seen high profits in recent years, renewing interest in the expansion of production and infrastructure. As a result, the Big Five’s facilitated financing to Canadian oil and gas companies increased from $36 billion in 2020 to $73 billion in 2022. Domestic oil and gas financing represented 68% of the banks’ total oil and gas financing deal flows over the three-year period.
  • While the Big Five banks are all members of the Net Zero Banking Alliance, none of them have publicly advocated for ambitious climate-related policy in Canada. In fact, the banks belong to industry associations that are working to block or dilute climate-related policies in Canada and globally. This is despite the NZBA commitment statement outlining that signatories will “engage on public policies to help support a net-zero transition of economic sectors in line with science.”
  • The Canadian Bankers Association, a financial industry group representing all five banks, has emphasized that Canada does not require climate-related financial regulation and that the pace of the energy transition should be determined by real-economy policies. All five banks are also members of cross-sector industry associations, including the Canadian Chamber of Commerce and the Business Council of Canada, that are advocating for the expansion of Canadian fossil gas production and blocking or diluting real-economy climate policy in Canada and globally.
  • This research analyzed $1.6 trillion in corporate lending and bond and equity underwriting deals at the Big Five banks in 2020, 2021, and 2022. According to BloombergNEF, the ratio of investment in fossil-fuel to low-carbon energy supply must reach 1 to 4 by 2030 to achieve a 1.5°C scenario. The Canadian Big Five’s financing deal flows inverted this ratio in 2020-2022 to 3.9 to 1 in favor of fossil fuel financing. 16.9% of all facilitated financing assessed went to oil, gas, and coal companies, compared to just 4.3% to companies identified as green. The Big Five’s ratio of financing fossil fuel companies over green is significantly higher than that of leading US (2.8 to 1) and European (2.0 to 1) banks. BMO had the highest fossil-fuel-to-green ratio at 6.8 to 1, while Scotiabank had the lowest at 3.0 to 1.
  • The Big Five banks do not appear to be aligning their short- and medium-term emissions reduction targets with their long-term net zero commitments. All five banks have set 2030 interim targets for the oil, gas, and power sectors among other sector targets. However, these are almost all relative, intensity-based targets, allowing for absolute financed emissions to rise. Only BMO has set a target to reduce its absolute Scope 3 oil and gas emissions. Meanwhile, RBC, Scotiabank, and BMO have only included lending activities in their targets,omitting key financing streams such as capital markets activities from their targets. The Big Five have facilitated $74 billion (USD) in bond and equity underwriting to companies in the fossil fuel value chain between 2020 and 2022, representing 16.0% of their total assessed underwriting deal value.
  • FinanceMap’s assessment of the banks’ climate governance, strategy, and policies against TCFD guidelines and IPCC/IEA technology positions shows that there are no leaders in the Canadian banking sector, with an average regional score of D+. Although the Big Five banks appear to have integrated climate considerations into their reporting on governance processes and risk management, they do not show evidence of robust climate strategies and are lagging in the metrics and targets used to assess and manage material climate risks and opportunities.Compared to other regions, the Canadian banks are on par with US banks (D+average) and trailing behind European banks (C+ average) in this regard.

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About InfluenceMap

InfluenceMap is a non-profit think tank providing objective and evidence-based analysis of how companies and financial institutions are impacting the climate and biodiversity crises. Our company profiles and other content are used extensively by a range of actors including investors, the media, NGOs, policymakers, and the corporate sector. InfluenceMap does not advocate or take positions on government policy. All our assessments are made against accepted benchmarks, such as the Intergovernmental Panel on Climate Change. Our content is open source and free to view and use (


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This report shows that despite their position of power, the Big Five Canadian banks are failing to support ambitious climate policy in Canada in line with their net zero commitments. These banks hold the keys to unlocking the green transition if they commit to using their climate influence and redirecting financial flows from fossil fuels towards clean energy and solutions. This would not only help tackle climate change but also create good jobs and increase Canada's global competitiveness.

Catherine McKenna, CEO of Climate and Nature Solutions, Chair of UN Secretary-General’s High-level Expert Group on Net-Zero Commitments, former Canadian Minister of Environment and Climate Change

It is not enough for banks simply to set top-line net zero commitments. As they recognize their role in addressing global warming, they need to do the necessary work to steer financial flows towards the transition. That means setting strong targets and exclusion policies, shifting financing to sustainable technologies, and supporting climate-related policy that will guide the economy down a less chaotic path. Canada's largest banks should be particularly aware of this, given their importance in an economy currently heavily reliant on fossil fuels.

Christina Herman, Senior Director for Climate Change & Environmental Justice, Interfaith Center on Corporate Responsibility