Shareholder Exchange

Resolution Text

Title: Net Zero Lobbying Consistency

Resolved: In order to meet its net zero emissions reductions targets and protect against regulatory, reputational, and financial risk, shareholders request that the Bank of Nova Scotia (“Scotiabank” or the “Bank”) adopt a lobbying policy that aligns its public policy advocacy with its net zero commitments, including membership in industry associations.

Supporting statement:

In joining the Net-Zero Banking Alliance, Scotiabank committed itself to transition all GHG emissions from its lending and investing portfolios to net zero by mid century or sooner.[1] In a 2021 statement Scotiabank CEO Brian Porter says the bank supports a net zero goal for the global economy.[2]

Canada’s Expert Panel on Sustainable Finance states: “Finance and industry look to policies and regulations for essential cues on government priorities and expectations.”[3] The Panel called for a public policy framework that reinforces a mid-century climate transition path. Corporate lobbying activities that are inconsistent with such a transition path present regulatory, reputational, and financial risks to investors.

Scotiabank is the only major bank in Canada with a membership in the oil industry association the Canadian Association of Petroleum Producers (CAPP). In its 2021 assessment, InfluenceMap named CAPP the sixth most negative industry association in the world blocking climate policy action.[4]

For example, a leaked March 27, 2020 letter from CAPP to the Canadian Natural Resources Minister calls for a rollback of regulatory oversight, a stop to the development of new climate policy, and for the oil industry to be exempted from the requirement to report on lobbying activity.[5] In 2020, French oil company Total withdrew from CAPP citing “misalignment” between the association’s public positions and the company’s climate ambition statement.[6]

In 2021, the International Energy Agency (IEA) released its net zero roadmap, concluding, “There is no need for investment in new fossil fuel supply in our net zero pathway.”[7] Yet, Mr. Porter has been vocal in support of fossil fuel expansion projects[8] and told the media he lobbied the Prime Minister and the Finance Minister on the same.[9]

Scotiabank’s online statement on its Public Policy Activities does not disclose its membership in CAPP nor does it disclose Mr. Porter’s lobbying on behalf of fossil fuel expansion.[10] Scotiabank’s peers such as RBC[11] and TD[12] go further than Scotiabank in providing annual disclosures on lobbying and political contributions.

If Scotiabank is to succeed in its net zero commitments and avoid the multifaceted risks of supporting lobbying that pushes in the opposite direction, the bank needs to update its public policy advocacy rules - including membership in business associations - to align with net zero.

We urge shareholders to vote FOR this proposal.

[1] https://www.unepfi.org/wordpress/wp-content/uploads/2021/04/UNEP-FI-NZBA-Commitment-Statement.pdf

[2] https://www.scotiabank.com/ca/en/about/perspectives.articles.impact.2021-02-brian-porter-achieving-net-zero-message.html

[3] https://publications.gc.ca/collections/collection_2019/eccc/En4-350-2-2019-eng.pdf

[4] IM_ClimatePolicyFootprint_2021.pdf

[5] https://environmentaldefence.ca/wp-content/uploads/2020/04/COVID-19-Regulatory-Request.pdf

[6] https://www.cbc.ca/news/canada/calgary/suncor-total-fort-hills-conocophillips-tim-mcmillan-1.5668095?_ga=2.257516291.96823105.1635518197-424990060.1635518197

[7] https://www.iea.org/reports/net-zero-by-2050

[8] https://financialpost.com/pmn/business-pmn/scotiabank-ceo-concerned-over-trans-mountain-fate-canadian-competitiveness

[9] https://www.cbc.ca/news/canada/calgary/scotiabank-ceo-brian-porter-calgary-chamber-1.5047360

[10] https://www.scotiabank.com/ca/en/about/inside-scotiabank/public-policy-activities.html

[11] http://www.rbc.com/community-sustainability/_assets-custom/pdf/statement-on-lobbying-political-contributions.pdf