As oil CEOs debase their own climate pledges, Bay Street must act
In an op-ed published in the Globe & Mail, Shift’s Executive Director Adam Scott writes with Matt Price, Executive Director of Investors for Paris Compliance, that banks and major investors will find it increasingly difficult to meet their net-zero commitments while continuing to finance Canadian oil and gas companies intent on expansion:
Canada’s oil and gas CEOs just drove a stake in the myth that their industry is committed to net zero. Fourteen of them have written a letter to all political parties calling for the unfettered expansion of the fossil fuel industry and the weakening of environmental safeguards and further subsidies.
This runs counter to the story they have been telling investors and the public over the past few years before U.S. President Donald Trump was re-elected – that they care about climate change and are taking the energy transition seriously. As a result, Bay Street has a choice to make….
If financiers also waver on net zero, this will not make climate risks go away. The laws of physics and chemistry don’t care about who holds political office and whether they believe in climate change. The Canadian insurance industry faced $8.5-billion in damage claims last year resulting from climate-related disasters, and has said that parts of Canada are becoming uninsurable. No insurance, no mortgages. No mortgages, no housing market. That’s the reality of the emissions growth the oil and gas industry is pushing for.
Instead, Bay Street needs to impose some discipline on itself and its clients. It needs to immediately stop financing fossil fuel expansion, which is worsening climate-related risk and undermining a stable economy and investment environment. It needs to tell oil and gas companies to get serious about net zero and transitioning to clean energy, or take its financing elsewhere.
And if it cannot find that discipline from within, regulators will need to step in to ensure the safety and soundness of the financial system in the face of a climate crisis.