Voluntary, vague disclosure and investment plans announced today by alliance of banks and other financial institutions too weak to stop polluting investments
FOR IMMEDIATE RELEASE:
Wednesday, November 3, 2021
OTTAWA – Today, Democracy Watch, backed by thousands of Canadians that have sent a letter through its Stop Fossil Fuel Financing Campaign and/or signed its Change.org petition, called on Finance Minister Chrystia Freeland and Ontario Premier Doug Ford to work together with all parties and make three key changes that will expose, and end, fossil fuel financing by Canada’s Big Banks and other key financial institutions, and empower financial consumers and retail investors to have a much greater say in what financial institutions are doing with their money.
Democracy Watch is one of 231 organizations in 38 countries calling for key changes to disclose and stop bank financing of fossil fuels and other major polluting industries that are causing the climate crisis.
According to research by the Rainforest Action Network and other organizations, 3 of Canada’s Big 5 Banks are among the top 12 banks worldwide financing the fossil-fuel industry, and the other 2 are in the top 25 banks. Click here to see their report.
It was difficult for the organizations to find out this information, and Canada’s Big Banks are denying it is accurate. The information also doesn’t include other Canadian financial institutions, such as insurance companies, that support the industry, nor does it cover other major industries that create the pollution that is causing the climate crisis.
At the ongoing international meeting addressing the climate crisis (COP26), an international alliance of banks and other financial institutions (GFANZ) led by former Bank of Canada Governor Mark Carney announced today a voluntary plan that will let them continue to hide their actual investments in fossil fuels and other polluting industries, and do little to stop those investments, for at least another decade.
Democracy Watch supports Reclaim Finance’s critical analysis of the weak and flawed plan proposed by GFANZ.
In April’s federal government budget, Finance Minister Chrystia Freeland didn’t include any measures to require the Big Banks or other financial institutions to disclose their climate-related investments. The government only committed to talk to provincial and territorial governments about disclosure (p. 175).
The international Task Force on Climate-Related Financial Disclosures (TCFD) has recommended requiring disclosure, as did an Ontario government task force in January 2021 (Recommendation 41, pp. 68-71). Canada’s Big Banks and other financial institutions are also not required to lend and invest in actually sustainable businesses that will create long-term jobs that don’t pollute or harm Canadians and their communities.
“Canada’s big banks and other financial institutions wouldn’t be able to operate without our money, and so they shouldn’t be allowed to keep details of their fossil fuel industry loans, investments and insurance secret from us or be allowed to make up their own voluntary disclosure and investment standards,” said Duff Conacher, Co-founder of Democracy Watch, which has led the bank accountability movement in Canada in the past 25 years. “The federal and Ontario governments must require all financial institutions to disclose their fossil fuel financing, to finance only actually sustainable big businesses, and establish two citizen groups that will empower financial consumers and retail investors to have more say over how financial institutions are using their money.”
Democracy Watch Stop Fossil Fuel Financing Campaign calls for 3 key changes which either the federal government (through federal laws) or the Ontario government (through securities laws) can make. The changes that would require disclosure of fossil-fuel investments by banks and other key financial institutions; require them to finance only actually sustainable big businesses, and empower financial consumers and investors to ensure their money is used to support sustainable, job-creating businesses:
- Require banks, insurance, trust and mutual fund companies, and other financial institutions, to disclose their lending, investments and insurance for the fossil fuel industry, and all other major carbon-producing industries (coal, heavy manufacturing), by company as recommended by the international Task Force on Climate-Related Financial Disclosures (TCFD);
- Add the Equator Principles and other real sustainability rules to Canada’s and Ontario’s laws to require banks and other financial institutions to lend, invest and provide insurance only to actually sustainable big businesses, and;
- Establish a Financial Consumer Organization (FCO) using this innovative method that has been proven effective in the U.S., and an Individual Investor Organization (IIO) using the same method. Together these groups will exponentially increase the information available to financial institution customers and individual investors about how financial institutions use and invest their money, and will also exponentially increase the power of financial consumers and individual investors to have a say in the use of their money, and to push for actually responsible, sustainable investing.
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FOR MORE INFORMATION, CONTACT:
Duff Conacher, Co-founder of Democracy Watch
Tel: (613) 241-5179
Email: [email protected]