Hon. Marilou McPhedran: Senator Galvez, thank you for this initiative.

I want to frame my question as a result of a recent report from the Sierra Club and six other non-governmental organizations that reported fossil fuel financing from the world’s 60 largest banks reached US$4.6 trillion in the six years since the adoption of the Paris Agreement. As you noted, the latest report from the UN Intergovernmental Panel on Climate Change, released just three days ago, warns us that the time is now — that we just don’t have any more time.

I note that in the Sierra Club report, three Canadian big banks are specifically named among the “dirty dozen” of the top international fossil fuel financiers from 2016 to 2021. Number 5 on that list is RBC, number 9 is Scotiabank and number 11 is TD.

Senator Galvez, could you please inform us as to your intention with this bill in responding to that kind of factual demonstration of how banks are not acting now or rapidly in the way the experts say must happen?

Senator Galvez: Thank you so much for the question, Senator McPhedran.

I can tell you that this is a concept of double materiality. That means that, on one hand, the financial sector acknowledges and says that the climate risk is systemic and, whether it is through the transition or the physical risk with all these extreme weather events that have been very destructive, they turn assets into stranded assets. On the other hand, they are financing the fossil fuel industry. They call this double materiality.

Now, the standards on sustainability — and this is on a global scale — they are saying this concept needs to be studied and the disclosure cannot only be voluntary. It has to be more complete in order to assess the risk more precisely and to apply the remedy because the risk, as you were saying, is there, and it’s growing; it’s alarming. It can bring us to a very difficult point of a different nature than other financial crises. People tend to think this could be very similar to the 2008 financial crisis, but it’s not. This is an external crisis coming from several factors that are cumulative and convergent.

I hope I answered your question.