Banks at Greater Reputational, Legal Risk From Global Climate Pledges by Rahul Vaidyanath
Appeared in Epoch Times on October 5, 2022
Gina's Thoughts
Last week, JP Morgan Chase CEO Jamie Dimon said that the bank would continue to make new investments in major oil and gas development projects. Now, in this week's article, we learn that some of the bigger US Banks are thinking of exiting Global Alliances such as GFANZ (Glasgow Financial Alliance for Net Zero), "the self-described world's largest coalition of financial institutions committed to transitioning the global economy to net-zero greenhouse gas (GHG) emissions". Canada's banks are not there yet. The big Canadian banks are all members of GFANZ and while they may be starting to get nervous about reputational and legal risk from global alliance climate pledges, they are not at the point of leaving. Ross McKitrick, an economics professor at the University of Guelph takes issue with global organizations dictating broad restrictions on a country's firms. "Banks should evaluate loans to the oil and gas sector based on the usual financial criteria of risk and reward. But they absolutely should not be allowed simply to shut off funding to a major economic sector for reasons of activism and politics." This is why the divestment agenda must be rejected, especially in Canada where the oil and gas sector is the backbone of the Canadian economy and keeps the economy humming.
