Analysts Slam Scotiabank’s Fossil Investments Despite $100-Billion Climate Fund
Scotiabank’s decision to pour C$100 billion by 2025 into projects to address the climate crisis is receiving mixed reviews from organizations that track its massive, continuing investments in fossil fuel projects.
The bank, Canada’s third-biggest lender, decided November 1 to allocate the funds and train its staff to assess the climate risks its commercial and corporate clients face, National Observer reports. It made the new policy public November 14, the same day the European Investment Bank, the world’s biggest multilateral lender, announced it would mostly ban future funding to oil, gas, and coal projects.
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“Scotiabank’s public promise of $100 billion in the next five years to reduce the impacts of climate change won’t undo the damage from their $92 billion in fossil financing in the three years since the Paris Agreement was adopted,” said Jason Disterhoft, senior climate and energy campaigner with the Rainforest Action Network.
“While we need more banks to reform their practices, the truth is Scotiabank has been heading in exactly the wrong direction,” he told Observer. “Their fossil financing rose significantly each year post-Paris, almost 50% higher in 2018 compared to 2016. What’s more, they’re the top Canadian banker of fossil fuel expansion by a 33% margin.”
“It’s good news that (Scotiabank) is wanting to invest $100 billion by 2025 in investments that will reduce climate change impacts,” agreed Oil Change International’s Ottawa-based senior campaigner, Nathan Lemphers. “But you can’t, on the other side, invest tens of billions of dollars into fossil fuel expansion at the same time. You need to have coherence and consistency. Otherwise, the investments in fossil fuel expansion will cancel out any good will or positive environmental impacts you’d get from today’s announcement.”
In March, a tracking report released by RAN, Oil Change, and several other organizations showed financial institutions investing an “alarming” US$1.9 trillion in fossil projects since the Paris Agreement was adopted. Observer says Scotiabank received an F rating in that report, placing fourth for funding fossil fuel expansions.
Asked whether the bank would put an end to that practice, Senior Manager of Communications Erin Truax told Observer the bank is “committed to working with our valued partners across the energy sector as they navigate the energy transition.” She added that staff in Scotiabank’s banking and credit teams “are now being trained to assess both physical climate risks—including exposure to wildfires, flooding, drought, or sea level rise—and so-called ‘transition risks’, meaning those stemming from the company’s reputation, market forces, or government regulations,” Observer writes.
The bank said the $100-billion fund would be devoted to projects to reduce carbon pollution, support renewable energy development, boost energy efficiency, support biodiversity, clean up transportation, and make water and land use more sustainable. “It made the promise alongside four others: ensuring climate-related risk ‘transparency’ and disclosure in the bank’s reporting, including the ‘physical and transition risks associated with climate change’ in its risk management, decarbonizing the bank’s own operations, and establishing a climate ‘centre of excellence’ that will host workshops and publish research,” Observer says.
But Disterhoft doesn’t see that getting the bank on track with the rapid decarbonization targets in last year’s IPCC report on 1.5°C pathways. “If Scotiabank really wants to fight climate change, they should stop financing fossil fuel expansion and commit to phasing out their fossil financing, in line with cutting emissions in half by 2030 and to zero by 2050,” he told Observer.