OTTAWA/TRADITIONAL, UNCEDED TERRITORY OF THE ALGONQUIN ANISHNAABEG PEOPLE — New polling carried out by Pollara Strategic Insights on behalf of Ecojustice and Environmental Defence shows that a strong majority of people in Canada want banks and financial institutions to invest more sustainably. This means cutting greenwashing and investing in climate action.
The climate crisis is causing havoc for communities across Canada and jeopardizing livelihoods. However, Canada is failing to address a key root of the climate crisis — the continued flow of capital by Canadian financial institutions into fossil fuel development and extraction.
Recent polling demonstrates that the public wants action on sustainable finance — financial activities that take into account social, environmental, and governance factors.
- Three-in-four (76 per cent) support their bank practicing sustainable finance, and 65 per cent support their pension plan practicing sustainable finance.
- Two thirds (65 per cent) support the government passing new sustainable finance regulations in the financial sector, with more preferring mandatory than voluntary regulations.
- More than three-in-four (78 per cent) support the government passing new regulations against greenwashing in the financial sector, with 64 per cent preferring mandatory rather than voluntary regulations.
- The desire for mandatory regulations is driven by skepticism that financial institutions would respect voluntary regulations. Only about one-in-three Canadians believe most banks and financial institutions would follow voluntary regulations.
- 75 per cent believe that financial institutions should prioritize the long-term good of society over short-term profits.
Canada’s financial institutions are among the largest funders of fossil fuels in the world, and continue to underinvest in clean energy. Canada’s big five banks, Royal Bank of Canada (RBC), Toronto Dominion Bank (TD), Bank of Montreal (BMO), Canadian Imperial Bank of Commerce (CIBC), and Scotiabank, all make the global top twenty list of fossil fuel funders since the Paris Agreement was signed, despite each having committed to reach “net zero” by 2050.
Canada is falling behind other leading jurisdictions when it comes to regulating sustainable finance. This puts at risk Canada’s ability to succeed on its climate commitments, or to succeed in the green transition. It also limits climate-friendly investment options for people in Canada.
Other jurisdictions like the EU have taken steps to hold their financial institutions accountable for meeting climate goals. The European Central Bank recently announced that it will impose fines on financial institutions that fail to address the risks from climate change.
In Canada, Independent Senator Rosa Galvez tabled the Climate Aligned Finance Act (CAFA) before the Senate — a legislative proposal for aligning the financial system with climate action. This legislation is currently before a Senate committee for review, and has strong support from climate and financial experts, as well as from people across the country. Finance Minister Chrystia Freeland’s recent Fall Economic Statement promised new action on sustainable finance policy, but more is needed.
It is clear that people across Canada want the federal government to take the lead on regulating the sustainability of the financial system.
Melanie Snow, Ecojustice legislative affairs specialist, said:
“Failing to address the financial forces driving climate chaos directly impacts the lives and livelihoods of everyone in Canada. Not only will people continue to pay the price of worsening climate catastrophes, but allowing financial institutions to invest people’s savings and pensions in fossil fuels risks triggering a financial crisis.
A majority of Canadians agree that the federal government must introduce regulations to make sure that financial institutions fund sustainable projects instead of climate destruction and put an end to rampant greenwashing in the sector.’
Julie Segal, Senior Manager of Climate Finance at Environmental Defence, said:
“Given that two-thirds of Canadians want climate-related financial policy, the government should start using this exciting federal policy lever. People in Canada get that a safe planet means a better quality of life, and as a result, they want their financial institution to invest in climate solutions instead of climate pollution.
Although financial institutions have promised to voluntarily reduce emissions from their investments, most have not taken the actions to deliver on these commitments. For Canada to keep its promises on climate action, it has to regulate the financial sector on climate. Climate-related financial policy is a no-spend solution with clear public support.”
Alex Walker, Program Manager of Climate Finance at Environmental Defence, said:
“A majority of Canadians are looking to their bank and pension provider to practice sustainable finance, but these institutions are continuing to invest heavily in the fossil fuel industry. Three-quarters of Canadians support federal regulation against greenwashing in the financial sector. The climate crisis has already cost billions of dollars in 2023. The Canadian public is looking for ways to ensure that its money is invested in a climate-safe future, and not more destruction. Climate-related financial regulation has clear public support, and the federal government must move forward on it”.
Survey findings come from a Pollara online survey of 1,519 adult Canadians, fielded between August 23 and September 5, 2023. Although online survey cannot be assigned a margin of error, a probability sample of this size is accurate to 2.5%, 19 times out of 20.