The new smell of money

As long as the protests remain on the streets, things change a bit. But when appeals from demonstrators end up shaking the financial world, it means there is finally hope.

Posted on Oct 4, 2021

After the Caisse de depot et placement du Québec, which withdrew from oil, about twenty large financial institutions in Quebec got their hands dirty this week. They signed a joint declaration for sustainable finance, making the environment important in their business decisions. Hallelujah!

These big financial names together manage 900 billion dollars in assets. These include Mouvement Desjardins, the National Bank, the FTQ Fonds, iA Financial Group, Montrusco Bolton, Power Corporation, Fiera Capital and, of course, the Caisse de dépôt.

By signing this declaration, they are taking concrete steps to respond to climate emergencies and to strengthen ESG principles in their actions (environmental, social and governance). The statement came as the 26that United Nations Climate Change Conference (COP26).

“There is a climate emergency. Through our concerted action, we must accelerate the transition to a lower carbon economy,” Desjardins Group President Guy Cormier said in a joint press release.

Same call from the National Bank’s designated boss, Laurent Ferreira. “The financial sector has an important role to play in the face of climate change and social issues. »

Environment, poverty or even social exclusion are all elements that pertain to our customers and our employees, and where we will do better.

Laurent Ferreira, Chief Operating Officer of the National Bank

Yes, but how, concretely, will these financiers change things?

First, we saw the Caisse de dépôt last week announce its withdrawal from oil by the end of 2022. The institution also aims to increase its investments in green companies from 36 billion to 54 billion. by 2025, in addition to allocating 10 billion to help pollution make the transition.

Desjardins, for its part, wants to increase from 24% to 35% the share of its total financing focused on renewable energies by 2025. It also wants to support five biomethanizer projects to help the agricultural sector reduce greenhouses. its gases. Greenhouse.

By signing the declaration, financiers are specifically undertaking to develop local expertise and local products in sustainable finance and to promote greater transparency in this area. For example, the National Bank will ensure that at least 5 billion in sustainable financial funds will be locally managed by 2025. The pledges of the signatories will be subject to periodic monitoring.

Lots of GHG, no loans?

A delicate but important question: will the environment take precedence over revenue? Will financiers refuse to lend funds to delinquent companies?

At Desjardins, we are gradually restricting the loop from large companies to medium-sized ones, explains Pauline D’Amboise, vice-president of management and sustainable development at Desjardins.

“Does the company include climate risk? Has it adopted the GHG reduction target? If the companies do not meet these standards to our satisfaction, yes, we can be called to refuse funding and we have already done so. we had some business opportunities because they didn’t meet our ESG standards, ”he explains.

At the National Bank, the vice president of communication and social responsibility, Claude Breton, speaks instead of accompaniment. “This leads us to ask farmers, to oil sands customers, like,‘ Do you have a plan? What will you change? ”Clients feel like we’re asking deeper questions about their skills,” he told me.

Desjardins, National Bank and other institutions have very concrete commitments about the carbon footprint of their internal activities, but also of their clients, whose estimates meet the strictest international standards.

At Desjardins, indoor activities produce 46,000 tons of GHG per year, which it fully pays for (the annual bill is $ 700,000). And according to initial estimates, Desjardins customers produce approximately 3 million tonnes per year, Ms.ako D’Amboise, including indirect emissions (scope 3). The cooperative movement is committed to having its internal activities and its customers carbon neutral by 2040.

For its part, the National Bank emits only 8,447 tonnes of GHG per year along with its internal activities, a decrease of 37% over the past four years. It calculates that it is the lowest emitter of major financial institutions in Canada (per revenue dollar, per employee or per square meter). It plans to reduce an additional 25% from these rates by 2025.

The institution will know how much GHG emissions its clients will have by 2022, and it aims to make its internal operations and client portfolio carbon neutral by 2050.

According to Claude Breton of the National Bank, the change in financiers has been noticeable over the past five years. “The saying ‘money doesn’t smell’ is really good and dead. Money now smells. Yes, things will change. They are changing. We have passed the tipping point, ”he told me.

Isn’t that encouraging?

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