SHARE is asking Canadian banks to demonstrate resilience to climate change

By Laura Gosset, Senior Shareholder Engagement and Policy Analyst 

Climate change poses significant risks to financial markets; therefore, companies need to report on their resilience in a low-carbon transition. This is the basic reasoning behind the recommendations of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD), released in 2017. These recommendations offer a clear framework for companies to disclose how they are assessing and managing climate-related risks and opportunities. The recommendations have received widespread support from companies, investors and governments around the world.

Since they were first released, SHARE has been engaging with Canadian companies to adopt the TCFD recommendations and integrate climate change considerations into their businesses. We are focusing on industries such as banking, where lending practices play a crucial role in a shift towards a low-carbon future in Canada. This dialogue builds on our earlier work engaging Canadian banks on climate-related risks and opportunities. Guided by best practice in this sector, we are coordinating this work with a group of international investors with almost $2 trillion in assets who, together, are engaging over 60 of the world’s biggest banks on the TCFD recommendations.

In Canada, the banks have begun to respond to our engagement demands and take concrete steps to address climate risks. Over the last few months, all six of the major Canadian banks (Scotiabank, TD, CIBC, RBC, National Bank, and BMO) have publicly announced their support of the TCFD recommendations, and committed to enhance disclosure over time guided by the recommendations. We have spoken with several of these banks about the processes they have underway, such as setting up cross-functional working groups and pulling together expertise from across the business to work through how the TCFD recommendations can be implemented.

RBC and TD have gone further and demonstrated leadership through participation in a UNEP Finance Initiative pilot project made up of 16 banks globally. This quarter, the UNEP project released its second methodology for implementing the TCFD recommendations in bank reporting. RBC, TD and the other banks in this project have committed to publishing a fully TCFD-aligned disclosure by mid-2019.

While we are encouraged by these developments, we recognize that this disclosure is just a first step. The banks still have a lot of work ahead of them developing governance, strategies, risk management, and performance-tracking around climate change and company-wide transition to a low-carbon future. SHARE will continue to engage Canadian banks and track their progress down this path. Just transition to a low-carbon economy is a fundamental component of ensuring a sustainable, productive, inclusive economy.

Laura Gosset is a senior shareholder engagement analyst at SHARE with a focus on environmental issues such as water security and climate change. Contact Laura at

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