Weeks after leaving the UN-backed Net-Zero Banking Alliance, the Bank of Nova Scotia has promised to disclose how much it invests in high-carbon versus low-carbon energy sources, while the National Bank of Canada has reiterated its commitment to net-zero goals.
The Big Six banks all left the alliance that aims to accelerate climate action among financial institutions. But the banks are still adamant that they’re committed to protecting the environment.
In a proxy statement released Friday, Scotiabank said it would disclose its energy finance ratio by June 1, 2026. The energy finance ratio compares a bank’s investment in low-carbon and high-carbon energy sources and allows investors to track how a bank is doing in reducing exposure to fossil fuels.
The bank made the announcement after more than a year of investor engagement with a coalition of investors led by Richmond, B.C.-based SHARE. Other investors in the coalition included Denmark’s largest pension fund PFA forsikringsaktieselskab and the Institute of the Blessed Virgin Mary Foundation of Canada Inc.
The coalition has withdrawn its shareholder proposal in light of Scotiabank’s commitment.
“For investors looking to understand climate financing by these influential institutions — not to mention navigating the new landscape of greenwashing regulations in Canada — nothing can replace a dollar-to-dollar comparison of a bank’s core financing of the energy sector,” said Amanda Carr, associate director, climate advocacy at SHARE, in a release Friday.
The Royal Bank of Canada already publishes its energy finance ratio. The bank left the climate alliance days after it was ranked by Bloomberg New Energy Finance as having the worst ratio of clean energy to fossil fuel funding among major global banks.
American banks like JPMorgan Chase and Citigroup also disclose their energy finance ratios.
Separately, in an annual sustainability report released Friday, National Bank said it aimed to reach $20 billion in renewable lending commitments by 2030 as it strives to reach net zero by 2050.
“We are adopting a pragmatic approach that focuses on supporting businesses in all sectors to promote innovation, decarbonization strategies and a responsible transition aligned with Canada’s long-term economic vitality,” Laurent Ferreira, president and CEO of National Bank, said in a statement.
The bank also said it would not lend to any new thermal coal mines or new clients who derive more than 25% of their revenues from operating thermal coal mines, and to increase its operational efficiency to achieve a 25% reduction target by the end of this year.