Canada's biggest banks plan to cut back on lending to the fossil fuel industry in 2023, according to a new report from a coalition of environmental groups.
However, after analyzing 60 of the world's major financial institutions, we found Bank of Nova Scotia (BNS.TO), Canadian Imperial Bank of Commerce (CM.TO), Bank of Montreal (BMO.TO), and Royal Bank of Canada (RY.TO). did. The firm made proportionately more deals last year than its peers JPMorgan Chase (JPM), Citi (C) and Bank of America (BAC).
JPMorgan topped the Rainforest Action Network's 15th annual report on Climate Banking, released Monday. The New York-based bank's 2023 fossil fuel lending estimate increased to US$40.8 million in 2023, up from US$38.7 million a year earlier.
Overall, the report found that a list of 60 private banks have provided US$6.9 trillion in loans to the fossil fuel industry since the signing of the Paris Agreement in 2016, including US$705 billion in 2023. It was found that it was included. These figures include loans, debt, and equity. underwriting. The authors say that due to a change in methodology, this year's numbers are not directly comparable to those published in previous years.
The 60 banks profiled pumped US$349 billion into 874 fossil fuel expansion companies in 2023, including Enbridge (ENB.TO) and TC Energy (TRP.TO).
Mizuho Financial (MFG), Bank of America, Mitsubishi UFJ Financial (MUFG), and Wells Fargo (WFC) round out this year's top five.
Royal Bank, Canada's largest financial institution by assets, ranked seventh this year, providing an estimated US$28.2 million in fossil fuel financing in 2023. Bank of Nova Scotia came in 10th place, followed by Toronto-Dominion Bank (TD.TO) in 11th place. BMO and CIBC ranked 15th and 16th, respectively.
All of Canada's major banks reduced their financial exposure to the fossil fuel industry last year. TD and Royal Bank led these declines, posting declines of 19% and 16%, respectively.
“Bank financing for fossil fuels is not declining fast enough,” April Merlo, research and policy manager at Rainforest Action Network and co-author of this year's report, said in a news release. Stated. “In 2023, nearly US$350 billion was loaned to companies expanding fossil fuels, which is dangerous and inconsistent with real climate action.”
Canadian banks rank highly considering their size. When ranked by fossil fuel financing as a percentage of assets, Scotia and CIBC came in second and third, respectively. On this criterion, BMO and Royal Bank ranked him seventh and eighth.
“This finding is consistent with recent reports suggesting that regional and small banks are becoming increasingly important to the sector,” the authors said in their report. Last month, Bloomberg News reported that U.S. regional banks were increasing lending to oil, gas and coal customers.
In terms of financing Canada's oil sands, Royal Bank, TD and BMO have each booked US$523 million in a three-way partnership in 2023. According to the report, the top 36 oil sands companies received US$4.4 billion in loans in 2023, a decrease of US$4 billion from the previous year.
Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.
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