After 2019, all lending for oil and gas projects will stop virtually in the developing world says World Bank on Tuesday, and send a powerful message to global producers that financial institutions are reassessing the risks of fossil fuel development.
On the occasion of the 2nd Anniversary of the signing of the United Nations Paris Agreement on Climate Change, in which countries committed to limit the rise in global average temperatures to less than 20C. An international climate summit hosted by French President Emmanuel Macron in Paris, where Jim Yong Kim, World Bank president made the announcement that we are determined to work with all of you to put the right policies in place, get market forces moving in the right direction, put the money on the table, and accelerate action. Exceptions will be made for natural gas developments in the poorest countries that need the fuel to provide access to energy for its citizens.
Canada's delegate in Paris summit, Federal Environment Minister Mrs.Catherine McKenna said country will work with the World Bank to leverage private financing for developing countries that want to phase out coal-fired power, part of Ottawa's international effort to reduce coal use in the electricity sector. She added, Canada certainly pleased with the announcement by the World Bank.
Mrs. McKenna said that everyone should be concerned about risk exposure as we move forward, and we are in transition period where risks are extremely large, if you are still investing in things like coal and not considering the exposure you are bringing to your shareholders and your board. However, Canadian institutions are laggards in that regard says critics. A report released this week by German environmental group, Urgewald, list several Canadian financial companies or pension funds among the top 100 investors in the coal industry worldwide. Those include Sun Life Financial Inc., Power Financial Corp. and the Caisse de dépôt et placement du Québec.
Criticism faced by Export Development Canada (EDC) as they continued their support of the country's oil and gas producers, especially the oil sands industries, which has been the fastest-growing source of greenhouse gas emissions in Canada. Environmentalists insist EDC's efforts should be considered subsidies for the fossil fuel industry, which Canada has committed to phasing out. The EDC provided nearly $12bn (Canadian) in support for the oil and gas sector last year for services such as receivables insurance, and working capital insurance and other export-related financial products.