Canadian banks lack key skills to achieve a net-zero economy

According to the investor group Climate Engagement Canada, there is a growing gap between the responsibility for boards to oversee companies’ net-zero goals, and their skills and knowledge to be able to do so. 

This is crucial as banks are going to be a deciding factor in whether Canada reaches its net-zero goals, depending on if they can pivot to financing climate solutions, instead of continuing to allocate capital to the polluting status quo. The recent Corporate Knight article (Pasht and Price, 2025) brings attention to this challenge, illustrating how major Canadian banks continue to finance fossil fuels at a rate higher than their international counterparts, surpassing the financing they provide for climate solutions. The authors urge Canadian Bank’s to develop a clear transition plan outlining how they intend to shift to a clean economy instead. 

Some Canadian banks have begun taking steps in a more climate-positive direction, such as TD, who - unlike other major Canadian banks - has strengthened its board recruitment process, making climate-related knowledge mandatory for board members. While TD’s climate governance improvements are gradual, but noteworthy nonetheless, the extent of their impact depends greatly on their board composition and the bank’s transition strategy (the necessary positive changes thus far have also included replacing one of three directors tied to oil sands, with a climate expertise professional).

If the Canadian bank boards fail to adapt to current climate realities, companies will struggle to transition their business and risk falling behind in a shifting economy, ultimately hindering Canada's progress toward achieving net-zero.

Written by Sabrina Careri, for Ann Dale

Image Credit: Julia Lachh from Unsplash