Canada’s six largest banks join Net-Zero Banking Alliance (2021)
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This past Friday, Canada’s six largest banks announced that they had entered into an agreement to align their lending and investment portfolios with a net-zero-carbon future. The banks all joined Mark Carney—the former governor of the Bank of England, former governor of the Bank of Canada, and one of the first global bankers to advocate using the banking system to fight climate change—in his organization, Net-Zero Banking Alliance:
| “ | “The commitment by the banks, which include Bank of Montreal, Canadian Imperial Bank of Commerce, National Bank of Canada, Royal Bank of Canada, Bank of Nova Scotia and TD Bank, comes ahead of the UN climate summit set to start in Glasgow at the end of the month and where a major focus will be on finding the finances to fund the climate promises.
The industry-led alliance commits signatory banks to aligning their lending and investment portfolios with net-zero emissions by 2050, as well as to setting intermediate reduction targets for 2030 or sooner…. Carney said in a statement that the financial systems needs to transform to ensure a "prosperous and just transition to net-zero" and that by joining the alliance, Canadian banks are "bringing their deep expertise and strong balance sheets to drive solutions for the sustainable economy." The alliance has, however, come under criticism for not going far enough, including ads published last week by more than 90 environmental groups that urged Carney to be more ambitious with membership requirements. The groups want to see more immediate targets laid out to phase out fossil fuel funding, a prohibition on financing any new fossil fuel projects, and a goal of halving financed emissions by 2030.”[1] |
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Response to Net-Zero Banking Alliance
Mark Carney, the brainchild of net-zero banking and originator of the idea that banking is not merely an available tool but a necessary tool in the fight against climate change was described by independent investment-market analyst Rusty Guinn of Epsilon Theory as, in his words, the “first mission-creep missionary” in the creation of the narrative that banks must do something about perceived climate change. In a note for clients, Guinn wrote:
| “ | “[W]hat interests us is Goldman alum Carney, the first mission creep missionary. From a June 2016 article in Canada’s Globe And Mail, he was already active establishing the idea that something must be done (emphasis in original) to create a connection between regulatory policy – more to the point, monetary policy – and climate change. And he did so in a way that was crafted for an audience of institutional investors….
Carney’s September 2016 speech in Berlin was a masterpiece in narrative construction, explicitly conflating climate change with terms of art in the world of financial risk management. He begins: Your invitation to discuss climate change is a sign of the broadening of the responsibilities of central banks to include financial as well as monetary stability. It also demonstrates the changing nature of international financial diplomacy. That is, I believe, what we call saying the quiet part out loud. Still, to really appreciate the skill being applied here, take note of the effective redefinition of climate change in the most well-known memes of financial risk…. [In Carney] we had a missionary – or perhaps a prophet – alone in the wilderness, shouting that something must be done to address the risks of climate change through monetary policy (emphasis in original)."[1] |
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See also
- Environmental, social, and corporate governance (ESG)
- Economy and Society: Ballotpedia's ESG newsletter
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