Evidence of meeting #129 for Environment and Sustainable Development in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was banks.
A recording is available from Parliament.
Conservative
The Vice-Chair Conservative Dan Mazier
Thank you, Mr. Kram.
Ms. Taylor Roy, go ahead for five minutes.
Liberal
Leah Taylor Roy Liberal Aurora—Oak Ridges—Richmond Hill, ON
Thank you.
Thank you to the witnesses for being here.
I'm going to ask a broader question, because we've been studying sustainable finance since the spring and have heard many expert witnesses talk about the need for the financial system to work with the government's goals, as opposed to against them.
While we've been studying sustainable finance, we have also undertaken a study on the Jasper wildfire complex, the disaster there. That study has been very politicized, and it's turned into who's to blame for the fire as opposed to looking at what can be done. It's being extended by people who want to continue the politicization, but there seems to be very little interest in looking at climate change as an underlying cause or considering climate change and how, in fact, this study on climate-aligned finance could help prevent disasters such as this going forward.
I'm looking for help understanding how it is that there are people who ignore the science, who don't see climate change as a real issue and seem to be more concerned with short-term profits than they are with the future of the planet. How does that happen, the dissociation that is there, and how can we do better in reaching out and working with people who are perhaps skeptical about climate change and the need for things like these taxonomies or your investments, for example, in the type of thing you're doing?
Could you start, Karine?
Lawyer and Sustainable Finance Project Lead, Ecojustice
Of course.
I'm totally stepping out of my legal shoes and stepping into the ones of someone who has been concerned about climate change for a very long time.
I'm sorry; I'm very tired because of a young child as well.
This is information that is difficult to process and brings up fear, and then fear can lead to rage or denial. I have felt it myself. After engaging on this, I watched a documentary that said it was one big swindle. My God, I felt good. I was like, “I don't have to worry about everything that I love ending.” But it's not a swindle.
I understand that a lot of people decide to disengage, deny and scapegoat people who are vulnerable and have very little responsibility in the problems, rather than really trying to hold accountable the most powerful actors responsible for this issue in our society. I think that's where the failure is. It's something to do with the difficulty of handling this psychologically.
Liberal
Leah Taylor Roy Liberal Aurora—Oak Ridges—Richmond Hill, ON
Thank you very much for that.
Mr. Dubey, you've worked in the financial field. You've worked in structuring projects in the natural resource sector, and you now have a great innovation to try to deal with the tailings ponds, which are a great environmental liability for the oil companies and our country, in fact.
How would you deal with that? How do you explain it, and how do you help people see the need to get more financing into projects like yours and away from traditional oil and gas production?
Chief Executive Officer, CVW CleanTech
I'd say that my perspective was very similar. I had a very difficult start to my career in mining and investment banking, working in an industry that's often been villainized in terms of its environmental impact, and then transitioning to working in oil and gas, and then a little bit of both. I've been in two industries. At the same time, my personal realization, as I said in my opening statement, was that we can certainly stick our head in the sand and hope the problem goes away. We've seen a lot of institutions go down the path of divestment.
I think the proactive approach here, which we should all be thinking about, is that we're not going to be moving off oil and gas tomorrow. I think we all know that's the practical solution. Is it five years, 15 years, 50 years? That remains to be seen. There are a lot of global decisions that will need to be made to get there.
I think what we need to do, in the very short term, is utilize anything that we can from an innovation perspective to make those industries more sustainable. Oil and gas is never going to be a green industry, necessarily. We can minimize the impact of that industry while we go through this decade-long transition so it doesn't have those impacts on the environment that we're all so worried about.
Liberal
Leah Taylor Roy Liberal Aurora—Oak Ridges—Richmond Hill, ON
Thank you.
When the CEOs of the banks and the oil companies were here in the spring, I actually asked the CEOs of the banks if they would be willing to commit to only funding projects in the oil and gas industry that actually worked to reduce emissions. None of them were willing to make that commitment. I understand the need to improve that while we're making the transition, but it doesn't seem that the appetite is there in our banking system for that either.
I'm just wondering if—
Conservative
Liberal
Conservative
Bloc
Monique Pauzé Bloc Repentigny, QC
Thank you, Mr. Chair.
My question is for Mr. Brooks.
We know that all the banks, both internationally and in Canada, are part of the Net-Zero Banking Alliance. However, Canadian banks are also members of the Canadian Bankers Association and the Canadian Chamber of Commerce, both of which are publicly opposed to Canada's economic environmental policies.
We also know that banks are increasingly financing fossil fuel companies.
In your opinion, would there be a way to move forward in this kind of framework with people who basically have doubts about climate change?
Climate Finance Director, Stand.earth
Thank you very much for your question.
This is where the issue of voluntary versus mandatory actions comes into place. We have lots of initiatives like the net-zero banking alliance, which is purely voluntary. We have other bodies that are purely voluntary as well. There's a lot of urging action: “Let's just get our financial institutions to do more, but let's not regulate them.” We've spent a lot of time urging voluntary action, but we're not getting that voluntary action from the titans of business you had here in June: the CEOs of the big banks and the CEOs of the big oil and gas companies. They could not commit to making the right level of investments in climate solutions and renewables that we all need to see, and they doubled down on the continuation of financing of oil and gas to the same degree they've been doing since the Paris climate agreement was signed.
I stated earlier that $1 trillion has gone into fossil fuels from 18 of the biggest financial institutions that are headquartered in Toronto—my city—just in 2022, leading to over a billion tonnes of fossil fuel emissions. This is why we need regulation. Voluntary action is simply not enough. What I don't understand is how the CEOs of these institutions can stand in the towers in downtown Toronto when the sky turns orange, as it did last summer when we had the fires across Canada, and look out their windows and say, “I'm going to do another oil and gas deal, and I'm not going to choose to finance renewables.”
You can look at the Royal Bank of Canada as a good example, with $265 million—
Conservative
The Vice-Chair Conservative Dan Mazier
I'm sorry, Mr. Brooks, but you're about 15 seconds over, unless you can wrap it up.
Ms. Collins, go ahead.
Climate Finance Director, Stand.earth
I was just going to say that at the Royal Bank of Canada, for every dollar they put into fossil fuels, only 40¢ goes into renewables and climate solutions. That's a problem that needs to be regulated away.
NDP
Laurel Collins NDP Victoria, BC
Mr. Brooks, I want to put a couple questions to you. One is about The Lancet, which just released a report stating that climate and health are facing record-breaking threats because of government inaction, and they're urging governments and companies to divest fossil fuel investments. In 2023, fossil fuel investments accounted for more than one-third of global energy spending. The World Health Organization has stated that while investments in fossil fuels are higher than ever, clean energy investments and the critical funds needed to support the most vulnerable nations are vastly underfunded.
Can you talk a little bit about some of these regulatory pieces, the taxonomy and how critical it is that we move urgently but robustly towards more sustainable options?
Climate Finance Director, Stand.earth
I think you hit the nail on the head there. There's underinvestment in renewables and climate solutions, and that has tremendous health impacts. Our energy transition is not moving fast enough, neither in Canada nor internationally. Part of the reason for that is that there's underfinancing happening at our biggest financial institutions. That includes the big banks, the big public pension funds and the big asset managers.
That needs to change, and it's only going to change—and meet the need we have globally, as well as in Canada, to accelerate the energy transition—through regulation. Simply putting out more disclosures or more data, which is what a disclosure framework is, is not going to change actions. That's where we need the regulation to come into force, incentivize investments in renewables and disincentivize investments in and financing of dirty energy projects so we can move faster on this journey.
Right now, the banks and the pension funds are stepping on the brakes when we're all trying to slam down on the accelerator, and that's what's slowing us down.
Conservative
Conservative
Branden Leslie Conservative Portage—Lisgar, MB
Thank you, Mr. Chair.
I'd like to start with Ms. Péloffy.
I appreciate your emotion. I also have a young child, so I'm also tired a lot. I can certainly understand that.
I'd like to start by asking you this: Would you support legislation that would force the Canada pension plan and other public pension plans to divest assets from oil and gas?
Conservative
Branden Leslie Conservative Portage—Lisgar, MB
Is this an issue that your organization has raised with the government?
Lawyer and Sustainable Finance Project Lead, Ecojustice
I've been with my organization for six months, so I'll use a lot of caveats, but I'm pretty sure the answer is yes.
However, to answer the question you didn't ask, that is not what the climate-aligned finance act does. Actually, it encourages engagement, and divestment is the last—
Conservative
Branden Leslie Conservative Portage—Lisgar, MB
I appreciate that. I'm just curious to hear some of your thoughts on behalf of the organization.
What was the response from the government when you raised that with them or when your colleagues did, perhaps?
Lawyer and Sustainable Finance Project Lead, Ecojustice
They haven't done it, so I'm guessing the response is negative.
