Power of Your Dollar – Katrina Canedo
We started our BankSwitch campaign in 2020, looking at data from the 2019 Banking on Climate Chaos Report.
We totalled up the big 5’s fossil fuel funding since 2016 — the date of the Paris Accord — and they all looked pretty bad. RBC was in the lead, but they were also the largest bank. As a percentage of total assets all of the big 5 banks looked awful. When we gave webinars, we told people they could and should move their money to a credit union.
And while credit unions are great, they’re interested in serving their existing members, not growing or making profits, so they don’t always offer all the same services and they don’t make a huge effort to acquire new clients by making switching easy. Many, many people who wanted to leave their banks because of their horrific records on the climate crisis stayed put because of inertia.
In fact, although I opened an account at a Alterna Savings during the BankSwitch campaign, I still have some savings with TD because I initially had a lot of different accounts their like an RESP, a TFSA etc. and I haven’t found the time to move it all over. And I was running the BankSwitch campaign!
When the numbers for 2020 came out in 2021, all the banks had lowered the fossil fuel financing. Unfortunately, it was just an anomaly due to the collapse of oil prices during the pandemic. In 2022, when the 2021 numbers came out, we saw that all the big 5 banks had increased their fossil fuel financing, while also increasing their rhetoric about investing in the energy transition and setting imaginary net-zero targets. Once again, it kind of just felt like all of the big 5 Canadian banks were equally bad.
But earlier this month, when the Banking on Climate Chaos 2023 report came out with numbers from 2022, we finally started to see a hint of separation between the banks. It almost feels as if maybe some of them are starting to slow down on the whole destroy planet earth as quickly as possible plan.
The most striking news on social media and on the front pages was that RBC had become the largest funder of fossil fuels in the world, blasting above event much larger American banks like Citibank that had traditionally taken the top spot on the climate villain league tables.
That fact gave us pause. Was there finally a clear worst among the big 5 Canadian banks?
So we decided to dig into the numbers a bit, comparing year-to-year fossil fuel financing, but also dividing their 2022 financing by their total assets (according to a quick google search for that number). While we aren’t able to say that any of the banks look good, two are clearly the worst — RBC and Scotiabank — and the other three are all showing different minor inklings of hope.
| 2019 | 2020 | 2021 | 2022 | Change Since 2019 | Assets | % of Assets | |
| RBC | 38.2 | 20.2 | 40.43 | 42.1 | up a lot (10%) | 1530 B | 2.7 % |
| TD | 28.2 | 17.6 | 21.7 | 29 | up a little (2.8%) | 1390 B | 2 % |
| BMO | 22.4 | 15.4 | 19.6 | 19.3 | down a lot (16%) | 622 B | 3.10% |
| CIBC | 21.4 | 10.2 | 24 | 17.9 | down, but only for one year | 613 B | 2.90% |
| SCOTIA | 27.9 | 17 | 31.6 | 29.5 | up (6%) | 864 B | 3.40% |
Not only is RBC now the biggest funder of fossil fuels on the entire planet, they also INCREASED their funding faster than any of the other banks. They are clearly the worst, and we can confidently say that moving your money to any of the other big five would be good a thing. Scotiabank is also showing its true colors. Not only did they increase their fossil fuel financing substantially between 2019 and 2022, they are also far and away the worst in terms of fossil financing as a percentage of assets. If you have money with Scotiabank, you should move it to TD, BMO or CIBC.
Unfortunately, we can’t yet say that any of the Big 5 Banks are actually doing a good job. But there are little hints that suggest that the other three might have an easier time turning things around than Scotia or RBC will. BMO’s fossil fuel financing has never returned to its pre-pandemic high and is actually down 16% from 2019. If that trend continues for a couple more years, we would feel comfortable recommending them. On the negative side, their fossil fuel financing is among the highest as a percentage of assets, higher than even RBC.
TD’s fossil fuel financing is slightly above their pre-pandemic high, but they haven’t blown past that number like RBC and Scotiabank have. What’s most interesting about TD is that their fossil fuel financing is the lowest as a percentage of total assets — meaning that they aren’t as dependent on the fossil fuel industry for profits and could clean up their act faster and more easily than the other banks if they turned their mind to it.
CIBC is kind of directionless. There nothing we would call a sign of hope. Their fossil fuel financing is down from 2019, but it was way up in 2021, so their 2022 numbers could be just a glitch. CIBC clearly isn’t the best, but they clearly aren’t the worst either. If they wanted to achieve some kind of separation in terms of branding and performance — rapidly reducing their fossil fuel financing would be a great way to do it.
BOTTOM LINE: RBC and Scotiabank are clearly the worst among the big 5. While none of the others have actually turned things around, BMO, TD or CIBC could gain a huge competitive advantage among retail clients by rapidly reducing their fossil fuel financing over the next few years.
Since the moment we launched the BankSwitch campaign, we’ve always said the Big 5 Banks don’t care what Climate Pledge Collective says about fossil fuel financing — but they do care what the other big banks are saying (and doing) about fossil fuel financing. As long as they’re all bad, there isn’t much incentive for any of them to do better, but one of them decides that actually cleaning up their act will be a competitive advantage — the other four will quickly follow suit. That’s why we’re so interested to see what might be the first hints at separation amongst these five villainous bedfellows.
Do we trust, or even expect, BMO, TD or CIBC to do the right thing and end their financing of fossil fuels? No. But, if one of them did, and they advertised their fossil-free status, we’re confident they would see a rapid influx of new accounts — especially from young people who will be paying them fees for decades to come.
Climate Pledge Collective 