A new report by Investors for Paris Compliance reveals that Canada’s largest banks, insurance providers, investment firms, and pension boards are failing to meet the necessary investment levels in renewable energy to reach net-zero emissions.
Despite adopting long-term net-zero commitments and interim targets, most financial institutions have shown little progress in increasing their renewable energy financing. Between 2016 and 2024, only three institutions met the International Energy Agency’s (IEA) 2030 target of 71% renewable energy financing.
Canada’s pension boards, Caisse de Dépôt et Placement du Québec (CDPQ) and the Canada Pension Plan Investment Board, were among the leaders in renewable energy investment, meeting the IEA target and setting plans for a net-zero transition.
However, the country’s six largest banks performed poorly, with Bank of Nova Scotia ranking the lowest. National Bank of Canada, which previously met the IEA threshold, has since seen its renewable energy financing levels fall.
The report highlights the need for stronger voluntary guidelines and financial-sector regulations to improve renewable-energy financing. Investors for Paris Compliance is urging the government to take action to support the transition to net zero.
Some institutions are making progress, such as Royal Bank of Canada’s plan to triple its renewable energy lending to $35 billion by 2030 and Manulife Financial Corp.’s commitment of $690 million to energy-transition investments.
But overall, the report suggests that Canada’s financial sector is not doing enough to address climate change, and that more needs to be done to meet the country’s net-zero goals.
COMMENTS