After Canada’s major banks exited the Net Zero Banking Alliance, sustainability-focused investors are urging them to show clearer progress on reducing emissions. A key metric gaining traction is the Energy Supply Ratio (ESR), which compares financing for renewable energy against fossil fuels.
Pioneered by BloombergNEF, the ESR highlights how banks are capitalizing on the clean energy transition rather than solely focusing on fossil fuel divestment. While some Canadian banks remain skeptical, citing concerns over standardization, others like RBC and Scotiabank have committed to reporting their ESR figures.
BloombergNEF’s latest data reveals Canadian banks lagging behind global peers, with BMO at the lowest ratio of 23 cents in renewable energy financing per dollar invested in fossil fuels. In contrast, National Bank leads with a ratio of $1.66, surpassing even RBC’s clean energy commitments.
With global momentum accelerating toward a 4:1 investment ratio favoring renewables by 2030, investors warn that Canada’s banks must act swiftly to remain competitive in the low-carbon economy.
Source: Swifteradio.com
