TD Bank Sets Net-Zero Target, Limits Fossil Divestment to Arctic Oil and Gas

The Toronto-Dominion Bank is coming in for a mix of kudos and mockery after announcing a 2050 net-zero target and declaring that it will no longer finance some oil and gas-related activities in the Arctic, but failing to issue a broader statement on fossil fuel divestment, as a growing number of European financial institutions are doing.

In a release yesterday, TD Bank Group said it had also “established dedicated teams to advise and support clients as they work to capture the opportunities of the low-carbon economy. The ambitious actions outlined today support the Bank’s Environmental, Social and Governance (ESG) strategy, which leverages TD’s business, people, and financial resources to help deliver sustainable economic prosperity.”

The release cast TD as the first North American-based bank to become carbon neutral, the first Canadian bank to announce a financial target to support the low-carbon transition, and the only bank participating in the full series of pilot projects launched by the Task Force on Climate-Related Financial Disclosures.

“Climate change is a critical environmental and business challenge and will require significant effort over the long term to help economies transition successfully to the low-carbon future,” said Group  President and CEO Bharat Masrani.

“I commend TD Bank Group for taking a step forward to increase its ESG performance and recognize the role it can play in building pathways to sustainability and contributing to positive climate action in North America,” said Ivey Foundation President Bruce Lourie. “It won’t be easy, and it will require collective action, however I am confident that TD’s leadership will inspire other North American corporations to tackle environmental and social challenges and to develop meaningful solutions to climate change and global sustainability.”

But other reaction to the announcement centred on TD’s decision to curtail fossil fuel investments in the Arctic—and nowhere else.

“The Arctic Circle is a unique and fragile environment, home to protected species, and of crucial importance to the local Indigenous populations,” the TD release states. “From a climate perspective, this area is warming significantly faster than the rest of our planet, which poses the risk of increased [greenhouse gas] releases and further warming.”

With that in mind, “TD will not provide new project-specific financial services, including advisory services, for activities that are directly related to the exploration, development, or production of oil and gas within the Arctic Circle, including the Arctic National Wildlife Refuge (ANWR).”

But that wasn’t quite enough for Shift Action Executive Director Adam Scott, who compared TD’s Arctic focus to “making a commitment to quit drinking, but only giving up Polar Ice vodka”.

Scott said he was pleased to see TD, along with the Royal Bank of Canada and the Bank of Montreal, recognize “limits to financing fossil fuels” in the midst of a global climate crisis. But he couldn’t see the rationale for a limited ban.

“TD cites concerns around the destruction of wild places, the worsening climate emergency, and harm to Indigenous communities. But these significant harms are clearly caused by fossil fuel projects undertaken all around the world,” he wrote. “Doesn’t TD’s concern for the environment, a stable climate, and Indigenous rights extend to oil and gas projects beyond the ANWR?”

The release said Canadian banks invested nearly US$500 billion in fossil fuel financing between 2016 and 2019, after the Paris Agreement was signed, including US$103.4 billion from TD to expand oil, gas, and coal. “A vague 2050 net-zero policy can’t be a smokescreen to justify continuing to finance tens of billions in fossil fuel developments each year,” Scott said. “These policies rarely include credible steps to reaching that goal, and TD’s announcement today is no different.”

In response to a query, a TD spokesperson recapped the bank’s original release but didn’t address the specific points in Shift Action’s critique.