Globe Climate: Canadian environmental policy, meet Trump

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Good afternoon, and welcome to Globe Climate, a newsletter about climate change, environment and resources in Canada.

As you will notice scrolling through this newsletter, U.S. tariffs are top of mind for just about every sector in Canada – as well as for our climate goals. But U.S. President Donald Trump has made clear that environmental, social and corporate governance (ESG) is not a priority, and the world has thoughts.

Most reaction was sparked by Trump’s decision to pull the United States out of the Paris climate agreement for a second time. Canadian Environment Minister Steven Guilbeault called the move “deplorable.” European leaders at the World Economic Forum in Davos vowed to stick with the agreement despite Trump’s withdrawal. Of course, oil and gas producers are thrilled, but it will not help their investment plans to transition to cleaner energy.

To learn a bit more before diving in, you can find out what Trump’s energy dominance agenda means for Canada.

Now, let’s catch you up on other news.

Noteworthy reporting this week:

1. Trade: With tariffs looming, Canada’s cleantech sector under pressure to show it can get off the subsidies and compete
2. Oil and gas: Ramping up U.S. oil production won’t be as simple as ‘drill baby, drill’
3. Electricity: Industry group demands Quebec reverse course on planned electricity rate hike
4. Resources: Alberta ignoring advice it sought from citizens on Rocky Mountain coal policy, former committee member says
5. Policy: Trump’s plans to roll back Biden’s green spending spark industry confusion
6. Ice: Among the crowds skating on the Rideau Canal Skateway, scientists study how to keep the ice going
7. Water: Regulator demands answers over Halifax boil-water advisory
8. Arts: Author Harley Rustad launches new wilderness-focused writers’ retreat
9. Listen to The Decibel: How the L.A. wildfires could increase Canadian insurance rates
10. From The Narwhal: Toronto-area national park to grow as feds scrap airport plan

A deeper dive

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An environmental stress test

Jeff Jones is a business reporter who focuses on environmental, social and corporate governance (ESG) and sustainable finance. For this week’s deeper dive, he talks about banks that are backtracking on climate commitments.

Ah, the Glasgow climate summit of 2021. Remember? It was heralded as the start of a bold new era for the financial industry. That’s when former Bank of Canada and Bank of England governor Mark Carney led an effort to marshal the mountains of private-sector dollars needed to help meet net-zero carbon emission targets around the world and shift to a low-carbon economy.

Four years later, Carney is pursuing a new dream: being elected prime minister of Canada. Meanwhile, many of the banks and asset managers that signed on to his efforts under the banner of the Glasgow Financial Alliance for Net Zero, or GFANZ, have bolted for the exits.

First, major U.S. banks bailed on the Net-Zero Banking Alliance, a GFANZ subgroup. This month, five of the Big Six Canadian banks quit the NZAB. At last check, only one member of that group, Royal Bank of Canada, remained as a Canadian member. (Two B.C. credit unions are still members as well – Coast Capital Savings and Vancity.)

This has been just one of many recent retreats in the corporate world from environmental, social and governance programs. The election of Donald Trump for a second presidential term turned a backlash against concerted climate action in some states into a full-scale attack at the federal level.

A big fear among companies is legal action on antitrust grounds, or being barred from doing government business in the U.S. altogether. The new Republican administration is unpredictable, so other risks tied to any pro-environment corporate policies could linger.

Upon announcing their decisions to drop out, the banks shared variations on the theme that they will keep supporting their clients’ decarbonization efforts individually, if not as a member of a UN-supported program.

Climate activists are not impressed. Some had criticized GFANZ as being rather toothless in the first place, as showed by its gradual loosening of membership criteria away from previously established emissions targets.

Richard Brooks, climate finance director at Stand.earth, said he was disappointed the banks are withdrawing from “even a mediocre climate initiative” with Los Angeles ablaze and after the hottest year on record. “But it gives them one less greenwashing mechanism as they remain amongst the world’s largest financiers of fossil fuels. Investors can now more clearly see their true colours,” he said in a statement.

- Jeff

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What else you missed

• B.C. First Nation leader apologizes, walks back on Northern Gateway pipeline support
• Nearly 250 million children missed school last year because of extreme weather, UNICEF says
• Parts of Canada’s Arctic tundra releasing more carbon than they absorb, study says
• Giant iceberg heading toward penguin-packed island off Antarctica
• Winter storm that dropped record-breaking snow in New Orleans spreads into Florida, Carolinas
• Fossil reveals Cretaceous drama of a croc attack on a flying reptile

Opinion and analysis

Eric Reguly: Denmark’s Orsted, world’s biggest offshore wind company, was a clean-energy star in the U.S. Donald Trump fixed that

Editorial board: Taking our homes out of the path of disaster

Elliott Cappell: The L.A. fires could happen in Canada – but there’s too much we still don’t know

Green Investing

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Global brands join buyers’ alliances in bid to drive investment into much-needed sustainable fuels

Some of the world’s biggest brands are pooling their buying power to fund the production and development of sustainable fuels as 2030 emissions targets creep closer.

Netflix, Google, Amazon, IKEA and Vancouver-based Lululemon are among the big names listed as members of collectives such as the Sustainable Aviation Buyers Alliance (SABA) and the Zero Emission Maritime Buyers Alliance (ZEMBA). Experts say these firms are sending strong signals to investors and policy-makers that there is a market for sustainable fuels, but no matter how big they are, they can’t drive the decarbonization of entire sectors alone.

• International auditors get tougher guidelines on judging firms’ environmental claims
• Carbon markets investor kicks off $1.5-billion Amazon protection plan in Davos

The Climate Exchange

We’ve launched the next chapter of The Climate Exchange, an interactive, digital hub where The Globe answers your most pressing questions about climate change. More than 300 questions were submitted as of September. The first batch of answers tackles 30 of them. They can be found with the help of a search tool developed by The Globe that makes use of artificial intelligence to match readers’ questions with the closest answer drafted. We plan to answer a total of 75 questions.

Photo of the week

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Guides and Explainers

• Want to learn to invest sustainably? We have a class for that: Green Investing 101 newsletter course for the climate-conscious investor. Not sure you need help? Take our quiz to challenge your knowledge.
• We’ve rounded up our reporters’ content to help you learn about what a carbon tax is, what happened at COP29 and just generally how Canada will change because of climate change.
• We have ways to make your travelling more sustainable and if you like to read, here are books to help the environmentalist in you grow, as well as a downloadable e-book of Micro Skills - Little Steps to Big Change.

Catch up on Globe Climate

• The potato farm of the future
• On thinning ice
• Armed Forces in a changing Arctic
• Does 2 Billion Trees ring a bell?

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