Scotiabank, RBC retire 2030 emissions targets in climate strategy overhaul
Scotiabank and RBC have withdrawn interim emissions reduction targets, with the former also retiring its 2050 net zero goal
Canadian lenders Scotiabank and Royal Bank of Canada have announced changes to their financed emissions reduction plans. While both have retired their interim 2030 financed emissions reduction targets, the two banks have chosen different approaches to their 2050 net zero targets.
According to new disclosures, RBC has maintained its 2050 target while Scotiabank has chosen to withdraw it.
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Target assumptions
In both cases, 2030 interim financed emissions – set in 2022 – have been withdrawn.
Scotiabank initially set interim targets for oil, gas and power generation lending. In 2023, the bank added an automobile manufacturing financed emissions target. In its latest sustainability report, Scotiabank announced it would retire both interim and long-term emissions reduction targets.
“We have evaluated our interim targets and the fundamental assumptions on which they were initially established in 2022 and have decided that, as of fiscal 2026, we are withdrawing our interim targets and our goal to achieve net-zero by 2050 for financed emissions”, the report reads.
RBC’s interim targets also cover the same sectors. In 2024, the bank reviewed interim targets ‘given changes to the facts and circumstances’ on which these were set.
“Following our review, we have concluded that the changing and uncertain operating environment makes some of our interim targets not reasonably achievable and the outlook for others unclear. As a result, we have made a decision to retire our interim targets”, RBC announced in its 2025 sustainability report published last week.
US backlash
The US-led ESG backlash seems to have played a role in both cases. Earlier this year, RBC’s Climate Action Institute published a report evaluating progress on climate action in the aftermath of the Paris Agreement.
While acknowledging that climate action has progressed in most regions of the world, the bank concluded, “the retreat on several climate policies in 2025, led by the United States, might signal a shift from a Paris spring for climate action to an American autumn”.
The report also claims that investors for their part ‘may still support change but aren’t demanding it as much’. According to the report, this claim of investor climate backtracking was not limited to the US.
“This wasn’t just an American phenomenon. Leading investors and financial institutions in Asia, as well as Europe, pulled back from collective efforts and commitments—in part because of regulatory pressures in some markets, notably the U.S., but largely because of pressure to meet other shareholder needs”, claims RBC.
Scotiabank too, cited public policy as a contributing factor to the decision to retire interim targets. In its report, the bank claims government decisions in North America have led reduced the pace of decarbonisation.
“These decisions include curbing major parts of the Inflation Reduction Act in the US and, in Canada, the elimination of the federal fuel charge, the decision not to implement the oil and gas emissions cap, and the postponement and elimination of other climate targets and policies”, the report points out.
In addition, the bank also claims that US executive orders have reduced data availability and quality of ‘client disclosures’.
Transition finance
Revised interim emission reduction plans have implications for lending portfolios in both cases. Alongside these decisions, the two banks also disclosed the state of transition-related financing.
RBC says lending to ‘low carbon energy and enabling activities’ has risen by 43% since 2023 to roughly $21bn (C$29bn). By 2030, the bank expects this number to reach approximately $25.5.bn (C$35bn).
In 2022, Scotiabank had set a target of a $255bn (C$350bn) in ‘climate-related financing by 2030. In 2025, Scotiabank’s report claims a total of roughly $154bn (C$212bn) has been extended towards the target since 2019 – combining lending, capital markets and advisory activities.
Parliamentary enquiry
In 2024, chief executives of both banks provided testimony to a Canadian parliamentary committee. Their testimony was part of an investigation into climate impacts related to Canada’s financial system.
Scotiabank CEO Scott Thomson stressed that “no bank can deliver this transition alone” and cited the now retired 2030 interim targets in his presentation.
“We are advancing sectoral targets by enhancing our understanding of our clients' transition-planning activities, especially in industries where we have set 2030 interim targets, including oil and gas”, he told the committee.
During the meeting, Gerald Deltell – a conservative MP from Quebec – pressed RBC chief executive David McKay on the issue of fossil fuel lending. “If you look at the energy-intensive nature of the Canadian economy, it's going to take us a while to transition. It's a very complex journey. Therefore, our focus is obviously on transition financing and on emissions. That's why you've seen us make commitments on absolute reduction and commitments on financing”, McKay responded.
Richard Brooks, climate finance program director at Stand.Earth travelled to Ottawa to watch the testimonies in 2024. Withdrawal of interim targets, he contends, amount to an “abdication of responsibility” from both lenders. “Neither bank properly recognizes the role they have played in negatively influencing government climate policies and the underfinancing of renewables they have done to hurt their ability to meet the targets they've abandoned. There is no self-reflection here”, he commented.
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