Statement from Adam Scott, Director of Shift, on the significance for Canadian finance institutions of the IEA’s new Net-Zero by 2050 outlook

originally posted May 18, 2021 at https://www.shiftaction.ca/news-updates

For Immediate Release: May 18, 2021

Statement from Adam Scott, Director of Shift, on the significance for Canadian finance institutions of the IEA’s new Net-Zero by 2050 outlook

The release of the International Energy Agency’s new 1.5℃ energy scenario is game changing for the responses of Canadian finance institutions to the climate crisis. The world’s most influential energy modelling analysis provides essential clarity on what is required to achieve the energy transition in line with the goals of the Paris Agreement.

In one fell swoop, the IEA’s definitive new outlook forces meaning into empty net-zero pledges made by governments, finance institutions and companies in recent years. Until now, most of these pledges lacked the required honesty, ambition, and planning detail for achieving their stated objectives, often veering instead into dangerous greenwash.     

The IEA’s findings are unequivocal: “There is no need for investment in new fossil fuel supply... No new oil and natural gas fields are needed in our pathway, and oil and natural gas supplies become increasingly concentrated in a small number of low-cost producers.”

In a news interview, the executive director of the IEA said that oil and gas projects may become "junk investments" that could throw domestic climate targets off course.

Finance institutions can no longer justify lending, underwriting, insuring, or investing in coal, gas or oil expansion projects, or the infrastructure that facilitates that expansion.   

The use of Paris-Aligned outlooks as a basis for decision-making isn’t optional. We need a roadmap showing the direction we must take in order to prevent the worst impacts of the climate crisis from becoming reality.

Outlooks are self-fulfilling prophecies. Financial decisions made today must assume a future where we are successful in achieving our climate goals. Continuing to make decisions based on the assumption of climate failure locks-in that failure. This new scenario must therefore form the default outlook for anyone using scenario analysis tools to understand exposure to climate risk.  

This year, a growing list of Canada’s largest finance institutions have made net-zero pledges without a credible plan for achieving the Paris Agreement goals. For example, the Ontario Teachers’ Pension Plan, Canada’s third largest pension fund, has yet to release any interim details on how it will achieve its goals. Net-zero pledges from the big five banks have also excluded promises to end finance for coal, gas and oil projects, undermining their credibility.  

Adam Scott, Director, Shift Action for Pension Wealth & Planet Health 

adamscott[at]shiftaction.ca

416-347-3858

Patrick DeRochie, Manager, Shift Action for Pension Wealth & Planet Health

patrick[at]shiftaction.ca

416-576-2701

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originally posted May 18, 2021 at https://www.shiftaction.ca/news-updates

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Statement from Shift Action for Pension Wealth and Planet Health on climate-related financial risk in the Ontario Teachers’ Pension Plan’s 2020 annual report