It’s not easy being green for banks in Canada, one of the world’s greatest oil producers. In the last two years, Canadian banks have doubled the amount of sustainability-linked finance (SLF) they provide to oil and gas clients.
- SLF refers to financing varying in cost when certain environmental, social, and governance (ESG) conditions are met at the enterprise level
- However, it does not mandate the funds to be employed for environment-friendly reasons
This has prompted charges of “greenwashing” with some environmental groups and investors arguing that banks are just adopting SLF to appear to be reducing their carbon footprint rather than actually doing so.
This could impede banks’ readiness for Canada’s low-carbon economy transformation.
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