TORONTO — Toronto-Dominion Bank on Monday said it will not provide project-specific financial services for oil and gas-related activities in the Arctic Circle as part of its plan to get to net-zero emissions by 2050, joining a host of global lenders in taking similar action.
The Arctic Circle “is warming significantly faster than the rest of our planet, which poses the risk of increased green-house gas releases and further warming,” Canada’s second-largest bank said in a statement.
The bank’s move signals the start of a shift for Canadian lenders that have largely continued to support the fossil fuel industry even as global counterparts have distanced themselves from parts of the sector.
Last month, biggest lender Royal Bank of Canada became the first Canadian bank to say it will not directly finance exploration or development in the Arctic National Wildlife Refuge. The Bank of Montreal that same month issued a similar statement singling out ANWR.
RBC also said it will limit financing for clients with significant coal-mining operations.
ExxonMobil Corp unit Imperial Oil, Chevron and BP held licenses in the Canadian Beaufort Sea, although Ottawa in 2019 prohibited work on frontier lands in the Canadian Arctic offshore waters.
Oil and gas loans accounted for less than 4 percent of business lending at Canada’s two biggest banks in the quarter through July, and a little over 1 percent of total loans.
Goldman Sachs, JPMorgan Chase, Wells Fargo, Citigroup and Morgan Stanley have all committed to ending fossil fuel financing in the Arctic.
TD shares rose 4.9 percent to C$62.40 in morning trading in Toronto, compared with a 1.5 percent gain in the Toronto stock benchmark.
TD said it will support clients to capitalize on “opportunities of the low-carbon economy,” and will begin reporting progress toward its net-zero goal from 2021.
TD Securities acted as financial adviser with RBC Capital Markets to Cenovus in its acquisition last month of Husky Energy.
Additional reporting by Jeff Lewis.