In recent years, investors, lenders, and insurers have been avoiding oil sands projects in Canada due to environmental reasons. ING Groep in June 2017 became one of the first institutions to exclude transactions linked directly to mining, exploration, transportation, and processing of oil sands. The policy includes TC Energy’s Keystone XL, Enbridge’s Line 3, and Trans Mountain pipeline expansion.. BNP Paribas has also stopped financing tar sands, as well as shale oil and gas projects since October 2017.
Other institutions that have phased out or restricted backing on oil sands projects include Societe Generale SA (December 2017), Insurer Axa SA (December 2017), Royal Bank of Scotland (May 2018), Sweden’s central bank (November 2019), UBS in (March 2020), Norges Bank (May 2020), Mitsubishi UFJ Financial Group (May 2020), Deutsche Bank (July 2020), and Dutch asset manager Robeco (September 2020).
Canada’s oil sector accounts for 7% of its GDP. Canada, the world’s fourth-largest crude producer, extracts most of its oil from hydrocarbon-soaked sands which incur a high environmental cost. Analysts said that Canada emits the highest emissions per barrel compared to other major oil-producing countries. Oil sands producers have managed to reduce CO2 emission per barrel production by 20% between 2005 and 2018, but combined emissions grew by 22% over the same period. The government is betting on efforts to reduce emission to attract investors again.
