{"id":24748,"date":"2025-02-19T08:00:00","date_gmt":"2025-02-19T13:00:00","guid":{"rendered":"https:\/\/share.ca\/?p=24748"},"modified":"2025-02-19T08:56:42","modified_gmt":"2025-02-19T13:56:42","slug":"investors-urge-canadian-banks-to-disclose-energy-finance-ratios","status":"publish","type":"post","link":"https:\/\/share.ca\/blog\/investors-urge-canadian-banks-to-disclose-energy-finance-ratios\/","title":{"rendered":"Investors urge Canadian banks to disclose Energy Finance Ratios"},"content":{"rendered":"\n\n
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“Big Five\u201d urged to demonstrate climate action after departures from Net-Zero Banking Alliance<\/h3>\n

COPENHAGEN\/TORONTO. Feb. 19<\/span>, 2025. A group of international investors is calling on Canada\u2019s biggest financial institutions to report a key metric that allows shareholders to assess the banks\u2019 ability to deal with our new climate reality.<\/span>\u00a0<\/span><\/p>\n

The coalition \u2014 led by SHARE<\/a>, the Shareholder Association for Research and Education, and including Denmark\u2019s largest pension fund, PFA Pension forsikringsaktieselskab<\/a> \u2014 is asking the banks to disclose annually their Energy Finance Ratio.<\/p>\n

The ratio, which compares an institution\u2019s investment in low-carbon and high-carbon energy sources, is a key indicator for investors to track how a bank is doing in reducing its exposure to fossil fuels and harnessing the opportunities of the energy transition.<\/p>\n

\u201cFor investors looking to understand climate financing by these influential institutions \u2014 not to mention navigating the new landscape of greenwashing regulations in Canada \u2014 nothing can replace a dollar-to-dollar comparison of a bank\u2019s core financing of the energy sector,\u201d said Amanda Carr, Associate Director, Climate Advocacy at SHARE.<\/p>\n

The SHARE-led coalition has filed proposals at four of Canada\u2019s biggest banks: Scotiabank (TSX:BNS), Bank of Montreal (TSX:BMO), CIBC (TSX:CM) and Toronto-Dominion (TSX:TD). A similar proposal filed last year led to RBC (TSX:RY) committing to report on its ratio in March of 2025, with the company\u2019s CEO calling the ratio \u201can important metric going forward<\/a>.\u201d Other banks are considering reporting on the ratios, with announcements expected in upcoming proxy circulars.<\/p>\n

However, despite more than a year of engagement \u2014 and many options for withdrawal being proposed by the investors since the start of 2025 \u2014 TD, BMO and CIBC continue to lag behind.<\/p>\n

As a stand-in for direct reporting, BloombergNEF has been extrapolating and calculating these ratios for global banks since 2023<\/a>. Such third-party ratios are of great interest to investors, Carr said, but lack the detailed insights only the banks themselves can provide, such as non-public bilateral lending.<\/p>\n

\u201cInvestors and banks have been tracking financed emissions of banking clients, which is critical, but these ratios allow us to track relative financing of the energy transition,\u201d said Carr.<\/p>\n

\u201cSuch data would give investors crucial insight into a future-forward, solution-focused approach to climate action by the financial sector.\u201d<\/p>\n

Disclosing energy finance ratios is top of mind for investors in other jurisdictions as well. The Office of the New York City Comptroller filed successful proposals at Citi and JP Morgan in recent years, and has taken the lead on engaging more American banks in 2025. JP Morgan released its ratio, including a transparent methodology, in November.<\/p>\n

For more information or to arrange an interview, contact Adam Burns, Communications Manager at SHARE, at aburns@share.ca<\/a>.<\/p>\n

Quotes<\/h3>\n

\u201cEuropean investors have always viewed the Canadian banking sector as a stable, well-regulated investment landscape.\u202f What is less clear is our understanding of these banks\u2019 approach and exposure to financing the energy transition. These ratios are key to better understand our investment risks.\u201d<\/p>\n

\u2014 Rasmus Bessing, MD, ESG Investments & CO-CIO at PFA Pension<\/p>\n

\u201cThe Pension Plan of The United Church Of Canada believes Canadian banks have the potential and responsibility to provide climate leadership. We see these ratios as a foundational disclosure that will cast a light on the future of low-carbon energy financing in Canada.\u201d<\/p>\n

\u2014 Alan Hall, Executive Officer, Pension Plan of The United Church Of Canada.<\/p>\n

\u201cThe ratio provides transparency and accountability on how banks support Canada\u2019s path to Net Zero. We need this to track steady and consistent progress of the real-economy energy transition. The Trottier Family Foundation’s request at TD supports our philanthropic approach to funding innovative climate solutions. As long-term investors committed to bettering Canada, we believe that climate risks must be addressed now to avoid irreversible ecological and economic damage. We urge other investors to vote for the proposal.\u201d<\/p>\n

\u2014 Eric St. Pierre, Executive Director, Trottier Family Foundation<\/p>\n

Resolutions<\/h3>\n

To view the full text of the shareholder resolutions filed at each of the four banks, click the links below:<\/p>\n