Canada’s banks recognize the urgency of addressing climate change and
understand that the financial sector is central to securing the
transition to a lower-carbon economy, mitigating the impacts of humans
on the environment and ensuring the continued resilience of our
country’s financial system.
Understanding the Commitment to Net-Zero
Climate change is a critical issue of our time and banks in Canada are committed to doing their part to address it. Banks understand that the financial sector is central to securing an orderly transition to a low-carbon economy, mitigating the impacts of humans on the environment and ensuring the continued resilience of our country’s financial system. Firm commitments are required to accelerate clean economic growth in Canada and to meet the ambitious goal of a net-zero economy. That’s why banks in Canada have begun implementing climate action plans that set specific targets, including emissions reduction targets, to meet the demands of this global challenge.
What does Net-Zero mean?
Net-Zero is an atmospheric state and a climate goal. Net-Zero refers to the balance between the amount of greenhouse gas (GHG) produced and the amount removed from the atmosphere (through carbon “sinks” such as plants, oceans and soil). While that system had been in balance, human activity has created an imbalance and an accumulation of GHGs in the atmosphere that are warming the planet and driving climate change. Net-Zero is the state when we are taking as much GHGs out of the atmosphere as we are putting into it. And we want to achieve that state by 2050 to mitigate the consequences of climate change.
How banks are helping
Banks in Canada have pledged to implement climate action plans that set specific targets to meet the demands of this global challenge:
- Financial commitments in the hundreds of billions in support of environmental and sustainable finance activities
- Committing to emissions reduction targets for their own operations
- Setting reduction targets in their lending, including sector-specific targets
- Working with business clients across industries to help them decarbonize and pursue energy transition opportunities
- Investing in transformational technologies, like Carbon Capture, Utilization & Storage, to help clean up existing energy production and accelerate the transition to cleaner alternatives
- Banks are also launching products to finance new and existing green projects, including sustainability-linked loans and Green Bonds
- Implementing climate-related financial disclosures, tracking financed emissions, and collecting quality data to better assess the challenge
- Canada’s six largest banks have joined the Net‑Zero Banking Alliance (NZBA), a global initiative of banks worldwide committed to aligning their lending and investment portfolios with net-zero emissions by 2050.
- Several banks have also joined Rocky Mountain Institute’s Centre for Climate-Aligned Finance and the Partnership for Carbon Accounting Financials, a global partnership of financial institutions
- Banks are also providing financial support to the Institute for Sustainable Finance to help give momentum to their activities
How you can help
It’s important to pursue an orderly and gradual transition to a lower-carbon economy and to achieve our collective net zero goals.
A common understanding of the challenges we face and how best to organize our collective response to help us all to do the important work we need to do to solve one of the greatest challenges of our time.
To address climate change and achieve our goals, we all need to work together. Banks have pledged to implement climate action plans to meet the demands of our global challenge and there are steps that we can all take as individuals, families and in our communities to help. The Government of Canada has programs and incentives to help Canadian households take action including information on:
- switching from gas cars and furnaces to electric vehicles and heat pumps
- reducing plastic waste,
- making homes more energy efficient and more.
Find out more: canada.ca/en/services/environment/our-environment.html