The National Bank of Canada (NBC) will increase renewable energy lending to $20 billion by 2030, as revealed in its latest sustainability report. This move strengthens its net-zero emissions strategy despite the ongoing shift in U.S. clean energy policies.
In this context, NBC plans to add nearly $10 billion in new renewable loans over the next six years, but some of its existing loans will be partially or fully repaid during this period. The final lending total accounts for both the new loans and the repayments of old ones.
NBC is Backing Major Renewable Projects in the U.S.
Since 2019, the bank has tripled its renewable energy funding to reach $15 billion. In 2023, its renewable energy loans exceeded its non-renewable energy exposure for the first time. This shift shows its strong commitment to clean energy.
Despite the U.S. government’s shifting stance on clean energy and Trump’s unfavorable stance on clean energy, National Bank continues to invest heavily in renewable projects.
In 2023, it played a crucial role in financing two major U.S. renewable energy initiatives, namely the SunZia wind and transmission project and the Solar Landscape community solar portfolio
By 2030, the bank aims to reduce the intensity of emissions in its power generation financing by one-third. To reach this goal, it continues investing in large wind, solar, and hydro projects. However, it restricts coal-related financing.
NBC Emission Reduction Targets
SunZia Wind and Transmission Project
The bank underwrote $775 million for the $8.8 billion SunZia project. Pattern Energy Group LP is developing this 3.5 GW wind farm and 550-mile transmission line. It will be the largest clean energy project in U.S. history.
SunZia will send wind power from New Mexico to Arizona and the western U.S. This will help fix transmission problems and improve grid reliability. The project will deliver affordable, fuel-free energy to millions of homes. On a larger scale, it supports the shift away from fossil fuels.
Solar Landscape Community Solar Portfolio
The bank acted as the green structuring agent and lead arranger for a $283 million green loan. This loan helps Solar Landscape LLC with its 107 MWdc rooftop solar projects in New Jersey. This includes 101 solar rooftops. It also adheres to the state’s Community Solar Energy Program rules
This project is a great initiative to expand New Jersey’s community solar access. At least 51% of the affordable clean energy will go to the low- and middle-income subscribers. Additionally, Solar Landscape will track and report usage.
NBC’s Emission Reduction Targets Across High-Carbon Sectors
The bank is committed to cutting carbon intensity by 33% by 2030 from 2019 levels. This effort reinforces its leadership in North America’s clean energy shift.
To reduce emissions, the bank has set interim targets for high-carbon sectors. In 2021, it introduced targets for oil and gas. A year later, it expanded its focus to commercial real estate and power generation.
Oil and Gas Sector Transition
Oil and gas production contributes 26% of Canada’s greenhouse gas emissions. The bank supports this sector’s transition by setting ambitious reduction targets.
Strong governance and strategic credit policies have kept its oil and gas portfolio aligned with its 2030 and 2050 targets.
Commercial Real Estate and Energy Efficiency
Due to their heating, cooling, and lighting demands, buildings have a major impact on climate change. However, energy-efficient technologies and sustainable designs can significantly reduce emissions.
In 2022, the bank set an interim target focused on commercial buildings, including offices, retail spaces, and multi-family housing.
- By 2024, it had already reduced these emissions by 25% and aims to cut Scope 1 and 2 emissions by 50% by 2030.
Power Generation and Clean Energy Goals
As said before, the bank’s power generation portfolio is diverse. Apart from solar and wind, it also includes hydro, nuclear, and biogas and natural gas while limiting coal-related financing. It provides loans to support both new and existing power projects.
Since 2019, it has cut scope 1 emissions intensity in power generation by 29%, reaching 0.10 tCO₂e/MWh as of October 31, 2023.
- By 2023, it had already achieved a 29% reduction. Its 2030 target is to reduce Scope 1 emissions by 33% from 2019 levels.
Cutting Ties with Coal: Stronger Funding Restrictions
The bank will not fund new thermal coal mines or lend to new clients earning over 25% of their revenue from coal mining. However, it will continue supporting existing clients who commit to reaching net-zero emissions by 2050 or phasing out coal operations.
It will also avoid funding new coal-fired power plants. The bank will not finance new clients that generate over 10% of their power from coal unless the money helps them transition to clean energy. It will support clients acquiring coal power assets only if they have clear plans to phase out coal or achieve net zero.
Notably, in the oil and gas sector, the bank will not fund exploration, extraction, or production in the Arctic.
NBC continues to enhance its sustainability strategy, focusing on investments that create lasting environmental impact. Its goal is to support North America’s clean energy transition and contribute to a net-zero future.
