“Big Five” urged to demonstrate climate action after departures from Net-Zero Banking Alliance
COPENHAGEN/TORONTO. Feb. 19, 2025. A group of international investors is calling on Canada’s biggest financial institutions to report a key metric that allows shareholders to assess the banks’ ability to deal with our new climate reality.
The coalition — led by SHARE, the Shareholder Association for Research and Education, and including Denmark’s largest pension fund, PFA Pension forsikringsaktieselskab — is asking the banks to disclose annually their Energy Finance Ratio.
The ratio, which compares an institution’s 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.
“For investors looking to understand climate financing by these influential institutions — not to mention navigating the new landscape of greenwashing regulations in Canada — nothing can replace a dollar-to-dollar comparison of a bank’s core financing of the energy sector,” said Amanda Carr, Associate Director, Climate Advocacy at SHARE.
The SHARE-led coalition has filed proposals at four of Canada’s 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’s CEO calling the ratio “an important metric going forward.” Other banks are considering reporting on the ratios, with announcements expected in upcoming proxy circulars.
However, despite more than a year of engagement — and many options for withdrawal being proposed by the investors since the start of 2025 — TD, BMO and CIBC continue to lag behind.
As a stand-in for direct reporting, BloombergNEF has been extrapolating and calculating these ratios for global banks since 2023. 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.
“Investors 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,” said Carr.
“Such data would give investors crucial insight into a future-forward, solution-focused approach to climate action by the financial sector.”
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.
For more information or to arrange an interview, contact Adam Burns, Communications Manager at SHARE, at aburns@share.ca.
Quotes
“European investors have always viewed the Canadian banking sector as a stable, well-regulated investment landscape. What is less clear is our understanding of these banks’ approach and exposure to financing the energy transition. These ratios are key to better understand our investment risks.”
— Rasmus Bessing, MD, ESG Investments & CO-CIO at PFA Pension
“The 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.”
— Alan Hall, Executive Officer, Pension Plan of The United Church Of Canada.
“The ratio provides transparency and accountability on how banks support Canada’s 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.”
— Eric St. Pierre, Executive Director, Trottier Family Foundation
Resolutions
To view the full text of the shareholder resolutions filed at each of the four banks, click the links below:
