Canada’s biggest banks are quietly resetting their climate ambitions. As reported by The Canadian Press, both Royal Bank of Canada (RBC) and Scotiabank have pulled back from key interim emissions targets, signaling a broader shift in how financial institutions are navigating the energy transition.
The move reflects a more complicated reality. Climate goals are colliding with policy uncertainty, geopolitical tensions, and a sharp rise in energy demand—especially from artificial intelligence. What once looked like a clear path to net zero is now far less predictable.
RBC Does a Reality Check on 2030 Targets
RBC had set clear 2030 targets in 2022. The bank aimed to reduce financed emissions across three high-impact sectors: oil and gas, power generation, and automotive. These interim goals were meant to guide its broader ambition of reaching net-zero financed emissions by 2050.
However, in its 2025 sustainability report, the bank acknowledged that the landscape has changed significantly. After reviewing policy shifts, global energy trends, and technology progress, the bank concluded that some of these targets are simply “not reasonably achievable.”
This is not a complete retreat. RBC is still committed to its long-term net-zero goal. But the bank is adjusting its expectations. It now emphasizes that success depends heavily on external factors—strong government policies, technological breakthroughs, and stable capital flows.
In simple terms, RBC is saying it cannot drive the transition alone.

- ALSO READ: Canada to Launch Sustainable Investment Taxonomy in 2026 to Guide Green and Transition Finance
Strategy Shifts Toward Flexibility
Instead of sticking to rigid targets, RBC is moving toward a more flexible approach. The bank will continue tracking emissions intensity in key sectors and reporting absolute emissions for oil and gas. At the same time, it is doubling down on financing the transition.
Its strategy now focuses on supporting clients through the shift to a low-carbon economy. This includes advising companies on decarbonization, investing in climate solutions, and scaling financing for clean energy. RBC is also working to manage its exposure to high-emission sectors while capturing opportunities in emerging technologies.
To support this transition, the bank is strengthening internal capabilities across its energy transition, sustainable finance, and cleantech teams. These efforts aim to align its business growth with long-term climate goals while remaining responsive to changing market conditions.
- MUST READ: Mark Carney Admits Canada Will Miss 2030 and 2035 Climate Targets as Policy Rollbacks Slow Progress
Scotiabank Goes Further: Net Zero Goal Dropped
While RBC has recalibrated, Scotiabank has taken a more decisive step. The bank has not only withdrawn its interim 2030 targets but also scrapped its goal of achieving net-zero financed emissions by 2050.
This marks a significant shift.
According to its sustainability report, the bank cited slower-than-expected progress in climate policy, rising global energy demand, and delays in key technologies such as carbon capture. It also pointed to major policy changes, including the rollback of parts of the U.S. Inflation Reduction Act and Canada’s removal of the consumer carbon tax.
Scotiabank said the assumptions behind its 2022 targets no longer reflect current realities. The transition, it noted, is not moving as quickly as expected.
Still, the bank continues to focus on managing climate-related risks and financing opportunities. It remains committed to mobilizing $350 billion in climate-related finance by 2030 and has already delivered over $200 billion since 2018.

Climate Momentum Slows Across Canada
The banks’ decisions reflect a broader slowdown in climate momentum across Canada.
Insights from RBC’s Climate Action 2026: Retreat, Reset or Renew show that, for the first time, the Climate Action Barometer has declined. This index tracks climate-related progress across policy, capital flows, business activity, and consumer behavior.
The drop was broad-based. Policy changes, including the removal of the consumer carbon tax and the reduction of electric vehicle incentives, weakened momentum. At the same time, economic uncertainty and trade tensions shifted focus toward affordability and job creation.
Energy policy also added friction. Restrictions on renewable energy development in Alberta slowed project pipelines. As a result, both businesses and consumers pulled back on clean energy investments.
Capital Flows Show Signs of Caution
Investment trends reinforce this shift. Climate-related investment in Canada has plateaued at roughly $20 billion per year. However, public funding continues to provide support, with nearly $100 billion in clean technology incentives planned through 2035. But private capital is becoming more cautious.
Investors are increasingly selective, particularly when it comes to early-stage climate technologies. Policy uncertainty is amplifying risks in sectors like renewable energy and clean manufacturing.
While some regions—such as Canada’s East Coast wind projects—continue to attract funding, overall growth has slowed.
AI and Energy Demand Complicate the Transition
Another major factor reshaping the transition is the rapid rise in energy demand from artificial intelligence.
AI systems require vast computing infrastructure, and data centers are expanding quickly. This surge in electricity demand is putting pressure on energy systems already trying to decarbonize.
For banks, this creates a difficult balancing act. They must support high-growth sectors like AI while also working to reduce emissions. This tension makes near-term climate targets harder to meet.
A Shift From Targets to Transition
The decisions by RBC and Scotiabank highlight a broader shift in strategy. Instead of rigid interim targets, banks are moving toward a more flexible, transition-focused approach.
They recognize that achieving net zero depends on factors beyond their control—policy support, technology development, and global energy demand. When those factors shift, strategies must adapt.
Rather than committing to targets that may become unrealistic, banks are focusing on financing solutions, managing risks, and supporting clients through the transition.
The Road Ahead
The rollback of interim targets signals a more cautious phase in the energy transition. It shows that progress is uneven and heavily dependent on policy alignment and market conditions.
RBC continues to hold its long-term net-zero ambition. Scotiabank, meanwhile, is prioritizing flexibility and risk management. Both approaches reflect a more complex and uncertain path forward.
Ultimately, achieving net zero will require stronger coordination between governments, industries, and financial institutions. Without that alignment, even the most ambitious climate plans will face significant hurdles.
For now, Canada’s largest banks are adjusting course—responding to a transition that is proving far more challenging than expected.
The post RBC and Scotiabank Step Back on Climate Targets as Policy Support Weakens and AI Drives Energy Demand appeared first on Carbon Credits.
Carbon Footprint
The Strategic Case for Nature-Based Carbon Investments
Nature-based carbon investments deserve consideration when they address a specific business dependency and produce outcomes you can measure. Imagine Moonbucks, a global coffee roaster planning next season’s espresso blend. It is considering natural Grade 4 coffee from Jimma, in southwestern Oromia, Ethiopia. Its sourcing decisions affect the roasting schedule and the cash tied up in coffee purchases. Moonbucks needs to understand which measures could protect that supply, what they would cost and how it would judge the results.
1. Define the sourcing problem before choosing a project
Moonbucks needs a dependable component for its espresso blend. Its procurement team wants continuity of volume and an agreed cup profile. Replacing a shipment at short notice could require new sample approval and changes to the blend, and given the schedules for cultivation, processing, and freight delivery, is practically impossible. Moonbucks needs to get this right, and its initial concern is inconsistent deliveries. It commissions an assessment of the supplying farms and post-harvest chain. The questions cover land condition, harvest availability and whether drying or storage problems are affecting saleable lots.
This distinction changes the investment brief. A tree-planting proposal cannot be assumed to fix drying problems. Better storage cannot restore eroded land. The team must establish which problem exists before selecting the response.
CCC’s guide to finding nature-based solutions in your supply chain explains where to look. Here, the next task is to turn a broad concern into a testable proposal.
2. Develop nature-based carbon investments around the actual supply chain
The assessment would trace Moonbucks’ purchases back through the exporter and supplying producer groups. Which farms supply the contracted lots? Who controls land-management decisions? How long does the buyer expect to maintain the purchasing relationship?
Furthermore, Jimma natural Grade 4 cannot be treated as interchangeable with every Ethiopian coffee. Moonbucks would need to test any substitute against its own blend and quality requirements.
Suppose Moonbucks’ assessment identifies an opportunity to maintain shade trees and restore vegetation along exposed streambanks. The IPCC describes agroforestry as a way to store carbon in vegetation and soil, with potential benefits for erosion control and water quality.1 Moonbucks would need local advice on species, growing conditions and maintenance before deciding how these measures fit its sourcing plan.
The proposal now has a defined sourcing connection and a candidate intervention. The next steps are to test its effect on production, assess carbon eligibility and build the financial case.
3. Compare the proposal with other ways to protect supply
WBCSD’s Nature-based Solutions Blueprint recommends comparing nature-based options with other responses across their benefits and costs.2 For Moonbucks, that means evaluating the landscape proposal alongside drying improvements, storage controls and alternative sourcing arrangements.
The product’s natural-process designation matters. Moonbucks should examine the drying and dry-milling chain alongside land conditions. Its team would check storage practices, contamination risks and incoming-lot quality to see whether problems arise before or after the coffee leaves the farms.
The revised proposal might combine land stewardship with separate post-harvest controls. Each component needs its own purpose and budget. A sustainability label should not obscure which activity is expected to solve which problem.
The project develops as the evidence improves. Its scope should follow the diagnosis rather than preserve the first idea unchanged.
4. Establish what the carbon outcome could count toward
Moonbucks’ sustainability team now tests the proposed carbon case separately from the sourcing case. Is the objective a measurable change in Moonbucks’ value-chain emissions, verified credits for separate voluntary use, or distinct outcomes under carefully defined arrangements?
Scope 3 covers value-chain emissions. A purchasing relationship alone does not prove that a farm intervention can be included in Moonbucks’ inventory. The team needs an applicable accounting method, defensible boundaries and evidence supporting attribution.
SBTi’s FLAG Guidance (forest, land and agriculture), version 1.2, says purchased credits used as offsets cannot meet near-term FLAG or energy and industry targets. Eligible land-based removals are subject to accounting requirements.3 Moonbucks needs to test its proposal against those rules before including an outcome in its targets.
For Moonbucks’ Jimma proposal, maintaining existing trees and establishing new vegetation could involve different carbon questions. Specialists must examine the baseline and additionality, meaning what changes because the project proceeds. They must also assess measurement and the risk that stored carbon is lost. CCC’s MRV and additionality article introduces those tests.
Until that work is complete, Moonbucks should not budget an assumed Scope 3 reduction or credit-sale receipt. Direct emissions reductions remain the priority.
5. Build a financial case that survives weaker assumptions
Moonbucks’ finance team would now build a multi-year budget. UNEP’s State of Finance for Nature 2023 compares current finance with the investment needed to meet climate, biodiversity and land-restoration goals.4 The company would cost its proposed activities, farmer participation and ongoing monitoring. Verification, where required, is a separate expense. Maintenance and responsibility for replacing failed plantings must remain visible after the initial establishment budget ends.
Operational benefits need equally careful treatment. If fewer rejected lots reduce emergency purchasing, count that saving once. Do not add “supply resilience” as another financial benefit when it represents the same avoided cost.
Moonbucks should compare a base case with slower benefits, higher implementation costs and no carbon revenue. It should also distinguish production outcomes from quality and shipment outcomes. A single good harvest would not prove that the landscape intervention caused better delivery performance.
A project can remain worth funding even when its carbon case needs more work. That decision must rest on the operational evidence and the company’s objectives, without unsupported environmental claims.
6. Fund a pilot with a clear expansion decision
Moonbucks’ first approval would fund a bounded pilot, rather than commit the entire sourcing program. Before spending, Moonbucks would agree on participating farms, responsibilities and the evidence needed at review.
Its scorecard could track farmer participation, implementation costs and plant survival, alongside accepted coffee volumes and lot-quality results. Carbon measurements would follow the selected method. Farm-level traceability must connect the intervention to the actual sourcing relationship.
Suppose Moonbucks’ review later finds that storage changes explain most quality improvements, while the land measures need longer observation. Those findings would shape the next decision: expand the proven component, adjust the landscape work or pause further spending. They would not justify crediting all improvements to tree planting.
This gives nature-based carbon investments a practical place in a multi-year strategy. Funding increases as the evidence supports it, and the project can change direction before a larger commitment.
Discuss a sourcing opportunity with CCC
Carbon Credit Capital’s nature-based supply-chain investment service uses its Dual-Value Model to examine supply-chain economics alongside potential sustainability outcomes.
Schedule a consultation to discuss your sourcing exposure and the questions to resolve before allocating capital.
Sources
- Intergovernmental Panel on Climate Change (IPCC), Climate Change 2022: Mitigation of Climate Change, Chapter 7, Agriculture, Forestry and Other Land Uses, section 7.4.3.3 (Agroforestry).
- World Business Council for Sustainable Development (WBCSD), Nature-based Solutions Blueprint, 5 June 2024.
- Science Based Targets initiative (SBTi), Forest, Land and Agriculture Science-Based Target-Setting Guidance, version 1.2, March 2026, section 3.1.4, pp. 37–38.
- United Nations Environment Programme (UNEP), State of Finance for Nature 2023, 2023.
Carbon Footprint
How to buy plastic credits, and what to check before you do
A plastic credit funds the collection of plastic waste in places where no formal system exists to collect it. Each credit represents a measured, independently audited quantity of plastic taken out of the environment or returned to use, tracked on a public registry.
![]()
Carbon Footprint
EU carbon credit claims after 27 September 2026
EU carbon credit claims changed on 27 September 2026, the day the Directive (EU) 2024/825 began to apply across the European Union. The change is narrow. It changes how a company can talk about the credits it buys. A product can no longer be called neutral on the strength of compensation alone; however, every specific, evidenced statement about what a company measured, reduced, and funded stays fully available.
![]()
-
Climate Change1 year ago
Guest post: Why China is still building new coal – and when it might stop
-
Greenhouse Gases2 years ago嘉宾来稿:满足中国增长的用电需求 光伏加储能“比新建煤电更实惠”
-
Greenhouse Gases1 year ago
Guest post: Why China is still building new coal – and when it might stop
-
Climate Change2 years ago嘉宾来稿:满足中国增长的用电需求 光伏加储能“比新建煤电更实惠”
-
Renewable Energy1 year agoSending Progressive Philanthropist George Soros to Prison?
-
Greenhouse Gases1 year ago
嘉宾来稿:探究火山喷发如何影响气候预测
-

