Canada’s oil producers need to set clear targets to fight climate change to continue to attract global capital, Canadian Prime Minister Justin Trudeau said on Wednesday, as the country’s carbon-intensive oil sands industry faces heightened environmental scrutiny from investors, as reported by Reuters.
The comments come as Japan’s biggest bank by assets said it would restrict transactions involving oil sands, while Norway’s $1 trillion wealth fund blacklisted four of the industry’s biggest companies.
“We’ve seen investors around the world looking at the risks associated with climate change as an integral part of investment decisions they make,” Trudeau told reporters, adding that many companies in the energy sector understood the investment climate is shifting.
“There is a need for clear leadership and clear targets to reach on fighting climate change to draw on global capital.”
Norway’s wealth fund said it would exclude Canadian Natural Resources, Cenovus Energy, Suncor Energy and Imperial Oil for producing excessive greenhouse gas emissions, the first time it has used that reason to blacklist firms.
The companies were excluded for “acts or omissions that on an aggregate company level lead to unacceptable greenhouse gas emissions”, it said.
“Pulling investments from the oil sands and claiming it’s for climate change reasons is more about publicity than fact,” said Cenovus Chief Executive Alex Pourbaix in a statement. The company aims to reduce its emissions intensity by 30% by 2030 and hold absolute emissions flat during that time, he said.
The decision to blacklist the four Canadian companies is “poorly informed and highly hypocritical,” said Alberta Energy Minister Sonya Savage, in a statement, adding that oil sands producers have reduced their overall emissions intensity by 19% between 2011 and 2017.
Stifling Canadian production by restricting financing is likely to leave countries with lower environmental standards to fill the void, said Tim McMillan, chief executive of the Canadian Association of Petroleum Producers.
But Keith Stewart, senior energy strategist for Greenpeace Canada, said the decision by Norway’s wealth fund highlighted the need for a shift to climate-friendly investments.
“This is the way the world is heading,” he said.
Japan’s Mitsubishi UFJ Financial Group (8306.T) said on Wednesday it has put oil sands extraction and drilling for crude oil and gas in the Arctic on its “restricted transaction” list.
Reporting by Jeff Lewis in Toronto, David Ljunggren in Ottawa and Rod Nickel in Winnipeg; Editing by Chris Reese and Marguerita Choy
