More emissions accountability needed in Toronto’s financial sector, report says

A new report finds the Toronto financial sector’s emissions impact is much more than what is self-reported and urges the city to do more to encourage a reduction.

The report produced by the Toronto Climate Observatory figures the 18 largest financial institutions based in the city, including banks, asset managers and pension funds, collectively directed more than $1.43-trillion in financing toward fossil fuel companies in 2022.

It says the total across the group works out to the equivalent of 1.44 billion tonnes of carbon dioxide emissions – twice the amount of Canada’s overall emissions for the year.

Most of the financial institutions in the study have made commitments to reach net-zero emissions by 2050, while many have also set interim reduction targets.

The report however finds the financial firms have sometimes severely under-reported their own financed emissions, including banks which only report on the impact from their lending activities but not their investments.

Lead author Robert Soden says inconsistencies in disclosed financings led his team to find some financed emissions were more than twenty times what financial institutions had self-reported.

“There’s existing standards that could be better followed, but it’s clear that at the moment, the (financial institutions) are not adhering to their own standards.”

Soden says the results show there’s much more to be done both on the reporting side, as well as action to actually reduce emissions.

“We just see this as a real opportunity to be much more clear and specific about what is the city of Toronto’s particular role in the global climate crisis and thus, what are the opportunities that the city has to intervene.”