The Canadian banking sector is under pressure to balance financial growth with sustainability. The Big Five banks of the country – Royal Bank of Canada (RBC), Bank of Montreal (BMO), Bank of Nova Scotia (Scotiabank), TD Bank, and Canadian Imperial Bank of Commerce (CIBC) – have all reported their latest earnings while advancing their climate commitments.
The Big Five banks’ financial results reflect the strength of the Canadian economy, while their sustainability and net-zero initiatives show how committed they’re to reducing carbon emissions.
But how do these Canadian banks compare? Let’s dive into their latest earnings and see who is leading the charge toward a greener future.
Financial Performance: A Competitive Landscape
Royal Bank of Canada (RBC): Record Earnings with Strong Performance
RBC reported a net income of CAD 5.13 billion in Q1 2025, up from CAD 3.52 billion in Q1 2024. Adjusted earnings per share (EPS) stood at CAD 3.62, surpassing analyst expectations of CAD 3.24.
- Revenue: CAD 16.74 billion (up from 13.49 billion year-over-year)
- Net Interest Margin (NIM): Not explicitly stated in available reports
- Provision for Credit Losses (PCL): CAD 1.05 billion (up from 815 million)
RBC’s financial performance was bolstered by a strong wealth management division, which saw a 48% increase in income, and robust capital markets earnings. The acquisition of HSBC Bank Canada contributed an additional CAD 214 million to net income.
Bank of Montreal (BMO): Solid Growth Amid Economic Challenges
BMO reported a net income of CAD 2.14 billion in Q1 2025, up from CAD 1.29 billion in Q1 2024. Adjusted earnings per share (EPS) stood at CAD 3.04, surpassing analyst expectations of CAD 2.41.
- Revenue: CAD 7.28 billion (up from 6.22 billion year-over-year)
- Net Interest Margin (NIM): Not explicitly stated in available reports
- Provision for Credit Losses (PCL): CAD 573 million (slightly down from 585 million a year ago)
BMO’s financial performance was strong despite higher credit provisions. Its capital markets division contributed significantly, with a 45% increase in adjusted net income, reaching CAD 591 million.
Bank of Nova Scotia (Scotiabank): Facing Margin Pressure
Scotiabank’s Q1 2025 net income stood at CAD 2.02 billion, slightly lower than CAD 2.12 billion in Q1 2024. Adjusted EPS was CAD 1.68, missing expectations of CAD 1.70.
- Revenue: CAD 8.16 billion (down slightly from 8.23 billion)
- Net Interest Margin: Not explicitly stated in available reports
- Provision for Credit Losses: CAD 955 million (up from 910 million)
While Scotiabank saw modest revenue growth, higher loan loss provisions and lower NIMs affected profitability. The bank’s Latin American operations performed well, helping offset domestic weakness.
TD Bank: Strong Performance Despite Loan Losses
TD Bank announced a net income of CAD 2.79 billion in Q1 2025, a slight decline from CAD 2.82 billion in Q1 2024. Adjusted EPS was CAD 1.55, remaining flat year-over-year.
- Revenue: CAD 14.05 billion (up from 13.71 billion)
- Net Interest Margin: Not explicitly stated in available reports
- Provision for Credit Losses: CAD 1.21 billion (up from 1.02 billion)
TD’s performance was driven by strong deposit growth and capital markets revenue. However, increased provisions for credit losses reflect potential economic headwinds.
CIBC: Higher Earnings But Growing Risks
CIBC posted a Q1 2025 net income of CAD 2.18 billion, up from CAD 1.73 billion in Q1 2024. Adjusted EPS was CAD 2.20, above the consensus estimate of CAD 1.81.
- Revenue: CAD 7.3 billion (up from 6.14 billion)
- Net Interest Margin (NIM): Not explicitly stated in available reports
- Provision for Credit Losses (PCL): CAD 573 million (down from 585 million)
CIBC’s earnings growth was supported by strong loan and deposit growth. Its capital markets unit saw a 19% increase in net income, reaching CAD 619 million. However, rising provisions for bad loans signal caution.
Carbon Emission Reductions and Sustainability Race: Who’s Leading?
As these Big Five Canadian banks are going after profits, they, too, are under pressure to go after their sustainable and net-zero goals. Let’s see what they’re doing to hit their climate goals.
Royal Bank of Canada (RBC): Advancing Towards Net Zero
RBC has pledged to achieve net-zero emissions in its operations and financed emissions by 2050. The bank is aligning its lending and investment activities with global climate targets, focusing on energy efficiency, sustainable finance, and emissions reductions.
RBC’s GHG emissions totaled 119,802 metric tons of CO₂e in 2023, reflecting a steady decline from previous years. The bank has committed CAD 500 billion in sustainable finance by 2025.
As of 2023, RBC has allocated CAD 393 billion in sustainable finance, making progress toward its CAD 500 billion target by 2025.
The most valuable bank in Canada also used carbon offsets as part of its strategy to neutralize its operational footprint.
Key emission reduction initiatives are:
- Expanding financing for renewable energy and clean technology projects.
- Increasing investments in green buildings and energy-efficient operations.
- Strengthening partnerships in climate finance and transition investments.
- Supporting industries in their transition to a low-carbon economy.
RBC remains committed to climate risk management and improving transparency in its sustainability disclosures. The bank continues to refine its financed emissions tracking and collaborates with businesses to meet shared net-zero goals.
Bank of Montreal (BMO): Charging its Net-Zero Ambitions
BMO has committed to achieving net-zero emissions in its operations by 2050. The bank has been carbon-neutral in its operations since 2010 and aims to cut its Scope 1 and 2 emissions by 30% by 2030 (from a 2019 baseline). The bank has achieved this by:
- Upgrading heating and cooling infrastructure across its buildings.
- Purchasing renewable energy certificates (RECs) to match 100% of its global electricity consumption.
- Offsetting residual emissions through high-quality carbon credits, including projects like the Great Bear Rainforest conservation initiative..
In 2023, the bank’s total greenhouse gas (GHG) emissions stood at 101,960 metric tons CO₂e, down 12% from 2022 levels. The bank retired 45,918 tCO₂e of carbon credits in the same year as part of its emission reduction strategies.
Major climate actions include:
- Issued CAD 10 billion in sustainability bonds.
- Financed CAD 70 billion in sustainable lending projects.
- Pledged to provide CAD 150 billion in green financing by 2025.
- BMO’s Asset Management division offers multiple sustainable investment options, focusing on ESG-oriented portfolios.
BMO has pledged CAD 300 billion in sustainable financing and has surpassed this with CAD 330 billion issued as of 2023.
The giant financier aims to support businesses transitioning to a low-carbon economy. In 2023, the bank expanded its emissions tracking for lending portfolios, including commercial real estate, and continues to refine its sustainability-linked lending framework.
Bank of Nova Scotia (Scotiabank): Carbon Intensity Reduction
Scotiabank aims for net-zero financed emissions by 2050 and a 40% reduction in operational emissions by 2030. In 2023, its operational carbon emissions were 110,000 metric tons CO₂e, down 9% year-over-year.
“font-weight: 400;”>>The Canadian bank has reduced energy consumption in branches and offices by 25% as part of its net-zero efforts. It has also financed low-carbon initiatives in Latin America
Scotiabank has set a target of providing CAD 350 billion in climate-related financing by 2030. In 2023, the bank provided CAD 36 billion toward this goal, bringing its cumulative total to CAD 132 billion since 2018.
Key climate initiatives include:
- Developing an internal net-zero scoring system to assess client transition plans.
- Setting interim emissions intensity reduction targets for the automotive manufacturing sector.
- Intending to increase internal carbon price to further emission reductions.
- Expanding financing solutions for renewable energy projects and electric vehicle adoption.
The bank also continues to reduce its own operational emissions by securing emissions-free electricity, implementing energy efficiency programs, and integrating climate risk assessments into its lending strategy.
TD Bank: Leading in Sustainable Finance and Decarbonization
TD Bank has the most aggressive green finance strategy among the four banks. It has pledged CAD 500 billion in sustainable and decarbonization finance by 2030, with nearly CAD 70 billion allocated in 2023 alone.
TD has emitted a total of 117,317 metric tons of CO₂e in 2023, down 14% from 2022. The bank has already achieved a 28% reduction in operational Scope 1 and 2 emissions, surpassing its 2025 target of 25%.
The bank has retired 85,176 verified carbon reduction and removal credits, equal to the bank’s market-based Scope 1 and 2 emissions and Scope 3 category 6 (business travel) emissions.
More notably, the bank has one of the largest direct air capture (DAC) carbon credit purchases in the financial sector. It agreed to buy 27,500 metric tons of carbon removal credits over four years.
Also, TD Bank has expanded its financial emissions tracking across nine high-emission sectors, including energy, automotive, and agriculture. The financier has also improved climate risk assessment tools and developed a central data repository to track emissions reduction progress across its operations and client portfolio.
Other Sustainability Highlights:
- Launched the first net-zero branch in Canada,
- Invested CAD 20 million in community-based climate projects, and
- 60% of power is sourced from renewable energy.
CIBC: Balancing Growth and Sustainability
CIBC is committed to reducing its Scope 1 and 2 emissions and achieving net zero. In 2023, its operational emissions stood at 71,031 metric tons CO₂e, a 5% increase from 2022.
Per CIBC’s sustainability report, the bank has set a 30% operational GHG reduction target by 2028 (compared to 2018 levels). It also aims to achieve carbon neutrality in operations by 2024. The bank is on track to meet this target through:
- Increasing investments in renewable energy.
- Expanding sustainable finance offerings, including carbon capture, hydrogen, and e-mobility financing.
- Implementing energy-efficient technologies in offices.
- Partnering with carbon capture firms for carbon offset projects.
- Enhancing transparency in climate risk reporting and engaging with industry groups
The bank has issued over CAD 157 billion in sustainable finance investments as of 2023. It has a target of 300 billion by 2030.
CIBC helped finance sustainable infrastructure projects. This includes battery energy storage systems in the UK and big renewable energy deals.
Who’s Winning the Net Zero Race?
With all the sustainability initiatives and financing solutions provided by each bank, who wins the net-zero race? The chart below shows the comparison of the banks’ GHG emissions and sustainable finance progress as of 2023.
Overall, TD Bank and RBC lead with the highest sustainable finance commitment, while BMO has surpassed its financing goal. RBC is also making significant strides in sustainable finance and net-zero initiatives, leveraging its market leadership.
CIBC has made strong progress in both emissions reductions and sustainable investments. Meanwhile, Scotiabank continues expanding its climate financing but has the third-highest operational emissions among the five banks.
Conclusion: Balancing Profitability with Climate Commitments
The five major Canadian banks continue to navigate economic headwinds while strengthening their sustainability and net-zero initiatives. While financial results varied, all banks have made progress in decarbonization efforts, sustainable finance, and emissions reductions.
- RBC leads in net income and is expanding climate finance and net-zero initiatives.
- BMO remains a leader in carbon-neutral operations and financed emissions tracking.
- Scotiabank is aggressively expanding climate-related finance and client net-zero assessments.
- TD Bank is surpassing emissions reduction targets and making innovative carbon credit investments.
- CIBC is strengthening its renewable energy financing and operational net-zero transition.
As regulatory pressure and investor expectations increase, these Big Five Canadian banks will need to accelerate their climate and net-zero strategies while maintaining profitability. Future progress will depend on expanding sustainable finance, improving emissions tracking, and supporting client transitions to a low-carbon economy.
The post RBC, BMO, TD: Who Wins the Canadian Big Five Banks’ Financial Face Off and Net-Zero Race? appeared first on Carbon Credits.
The accounting differences that decide whether your nature investment shows up in inventory, in BVCM, or nowhere at all.
The question reaches a procurement team about three weeks before the next sustainability committee meeting. Someone has read about insetting. Someone else has just signed off on an offset purchase. The CSO wants to know if the two are interchangeable. The answer is no, and the GHG Protocol Land Sector and Removals Standard is the reason why.
This article walks through what each term means at audit-grade specificity, what the standards actually say about how each gets counted, and how to decide which tool fits which target. The insetting vs offsetting question is one of the most-searched in corporate climate strategy, and one of the most poorly answered. By the end of this piece, you should be able to brief a committee on the difference without notes.
The two definitions, in plain English
Offsetting means buying carbon credits generated outside your value chain and retiring them against your residual emissions. The reduction happens somewhere else, financed by you, and the credit is the receipt.
Insetting means investing in emission reductions or removals inside your own value chain, typically with suppliers, where the reduction is directly linked to the products and services you buy. The reduction happens inside the boundary of your Scope 3 inventory, and the accounting treatment is fundamentally different.
The shorthand from the University of Oxford’s Nature-based Insetting Initiative is useful: insetting is what you do with the supply chain you have; offsetting is what you do with the supply chain you do not have.
What the GHG Protocol Land Sector Standard actually says
The GHG Protocol Land Sector and Removals Standard, finalised in 2024 after a multi-year pilot, sets the rules for how land-based emission reductions and removals enter corporate inventories. The Standard distinguishes between inventory accounting (Scope 1, 2, and 3) and project or intervention accounting (a separate methodology for crediting).
For insetting, the practical implication is that supplier-level interventions, when properly measured and attributed, can reduce your Scope 3 category 1 (purchased goods and services) emissions in your inventory. The reduction is not a credit retired against the inventory; it is a lower inventory number, period.
For offsetting, the credit is retired separately. It can be reported as a contribution toward a net-zero claim under the SBTi Beyond Value Chain Mitigation framework or as part of a VCMI Carbon Integrity claim, but it does not lower the inventory number.
A practical consequence: if your Science Based Target requires a 50% absolute reduction in Scope 3 emissions by 2030, insetting moves you toward the target. Offsetting does not. This single point of difference reshapes the procurement decision.
When insetting counts toward Scope 3 (and when it does not)
Insetting counts toward Scope 3 only when several conditions are met:
- The intervention must occur with an entity in your value chain.
- The emissions reduction or removal must be measured against a defensible baseline.
- The reduction must be attributed to your share of that supplier’s output, not double-counted with other buyers.
- It must follow the inventory accounting rules in the GHG Protocol Land Sector Standard, not the project accounting rules used to generate credits.
The most common failure mode is double counting. If your supplier sells the same reduction as a credit on the voluntary market and also reports it to you as a Scope 3 reduction, the math breaks. The Standard requires you to address this risk, typically by purchasing and retiring the supplier-issued credit as part of your inventory or by contractual provisions that prevent the supplier from selling the reduction twice.
When insetting does not count toward Scope 3: when the intervention sits with a supplier you do not buy from, when the baseline is not defensible, when the attribution is unclear, or when the documentation does not survive audit. Those cases default to Beyond Value Chain Mitigation, which is still useful but operates on a different ledger.
The procurement and supplier engagement question
Insetting is harder than offsetting. That is the unfashionable truth most buyers eventually confront. Offsetting is a transaction; insetting is a relationship.
To run an insetting program, you need supplier mapping precise enough to know which farms or facilities sit at which Scope 3 boundary. You need an engagement model that gets suppliers to participate, which usually requires multi-year commitments and shared economics. You need an MRV architecture that measures the right things and produces audit-ready documentation. And you need a contractual structure that prevents double counting and protects both sides.
The trade-off you receive in return is significant. Reductions count against your inventory rather than your residual. Supplier relationships deepen, which protects sourcing continuity. Yield and quality improvements often follow regenerative interventions, which reduces your input cost over time. And the regulatory file, under CSRD, CSDDD, EUDR, and the SBTi FLAG Guidance, is materially stronger.
Choosing the right tool for the right target
A practical decision rule. If your target is a science-based Scope 3 reduction and you operate in a FLAG sector or source FLAG commodities, insetting is the structurally correct tool. If your target is a net-zero claim that includes neutralising hard-to-abate residual emissions outside your value chain, BVCM via high-integrity offsets is the structurally correct tool. Most companies with material Scope 3 exposure need both, in different proportions, sequenced over time.
The sequencing matters. Insetting takes longer to stand up but produces a permanent reduction in the inventory. Offsetting can be transacted faster but does not change the inventory and now sits under tighter claim restrictions. Treat them as complementary tools with different jobs, not as substitutes. The Accountability Framework Initiative and the IUCN Global Standard for Nature-based Solutions both provide useful guardrails for the insetting side, with biodiversity, human rights, and benefit-sharing requirements that go beyond carbon math.
If you are mapping a Scope 3 reduction roadmap and need to scope which interventions count toward your inventory versus which sit in Beyond Value Chain Mitigation, the carbon and sustainability experts at Carbon Credit Capital can help you structure a nature-based supply chain investment program that fits your FLAG exposure, your target architecture, and your audit horizon. Schedule a consultation.
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