Scotiabank is second highest fossil fuel financer, and shareholders are demanding change

TORONTO, March 31, 2023 /CNW/ - Shareholders are calling on the Bank of Nova Scotia (Scotiabank) to improve their net zero reporting. On April 4, a critical climate action proposal will go to vote.

Filed by Canadian responsible investing organization SHARE, and on behalf of the Trottier Family Foundation, Proposal no. 2 calls on the bank to account for its net-zero lending practices, and asks for a report on the effectiveness of client net-zero plans. The bank has set its own internal standard for achieving its net zero goals, and it should be holding its clients to this same standard to be truly accountable.

"Transparent reporting on climate risk is crucial to understanding the bank's progress toward meeting its climate goals," said Jennifer Story, Associate Director of Climate Advocacy at SHARE. "Scotiabank tells us that client engagement is essential to meeting its net zero goals. But when we ask about what formal expectations the bank is setting for their clients, we hear crickets chirping."

Story continued: "Scotiabank presents itself as responding to calls for climate action, but without transparency, the bank's commitments appear to be more about public relations than tangible action."

The bank's current "Net Zero Pathways" report references client engagement on environmental initiatives, but fails to articulate any framework or expectations for its clients' net zero transition plans. The baseline used to assess client plans remains hidden from shareholders.

"Scotiabank says they are serious about their climate commitments. Yet In 2021 the bank became the largest Canadian financer of companies on the Global Coal Exit List," said Eric St. Pierre, Executive Director of the Trottier Family Foundation. This is one reason why we're asking Scotiabank to set the bar for their client's climate transition plans, in plain sight—so investors and clients alike see what net-zero, Paris-aligned lending requires of us all."

Since 2016, Scotiabank ranks 2nd among Canadian banks in terms of financing companies across the fossil fuel lifecycle, and globally, the bank ranks 9th. Scotiabank exposes itself and its investors to significant credit losses if it continues to lend to clients that do not rapidly take the requisite steps to decarbonize their operations.

Many of Scotiabank's global peers have created comparable frameworks, including Toronto Dominion Bank (TD Bank). The TD Bank 2022 Climate Action Plan: Report on Progress and Update on TCFD outlines its process and objectives for client engagement, including its "Client Assessment Framework." Scotiabank is being asked for a report on how it might achieve similar results.

"Scotiabank claims to be making strides on its climate commitments, yet the bank has increased its exposure to coal. Our proposal asks the bank to provide clear climate risk tools. The bank has refused to take action on this eminently achievable proposal. Scotiabank is burying its head in the sand – even as ocean levels rise around us," said Story.

Read the full proposal and learn more in SHARE's Proxy Alert.

SOURCE SHARE (The Shareholder Association for Research and Education)

Media Inquiries can be directed to: Amanda Watkins, Communications Manager, SHARE, [email protected], 416 306 2255