Corporate commitments to become net-zero by 2050 became so trendy this year, Canada鈥檚 big banks made them twice.

First came a string of promises one by one, starting with TD Bank late in 2020 followed by the other banks throughout 2021. In November, they all recommitted to the goal as they joined former Bank of Canada governor Mark Carney鈥檚 Glasgow Financial Alliance for Net Zero.

But while the round numbers seem like a neat solution, the U.N. and others have emphasized that much of the heavy lifting on emission reductions needs to happen this decade, and only through details to be released in the next year or so will it start to become clear how quickly Canada鈥檚 big banks are prepared to move.

Pressure is certainly mounting as Canadians live through the very real effects of climate change, and activists increasingly focus their efforts on the financing behind fossil fuel production.

Governments are also increasingly moving toward climate action, including the huge shift in direction brought by U.S. President Joe Biden, raising the spectre of regulation if the industry doesn鈥檛 change fast enough.

And the finance industry is increasingly talking about the importance of action, and putting the standards and data together that will allow for potentially meaningful moves on climate change.

鈥淭here鈥檚 nobody who鈥檚 not aware of it, there鈥檚 not a single continent that isn鈥檛 deeply impacted,鈥� said Margaret Franklin, chief executive of the CFA Institute, which put out sustainable investment disclosure guidelines in November.

鈥淭hat urgency is starting to create co-operation. So where we would have seen a cluttered, disjointed, chaotic disposition, everybody coming out with everything, now you鈥檙e starting to see the centrifugal force of consolidation.鈥�

But while there鈥檚 change underway, Canada鈥檚 big banks are still major funders of the fossil fuel industry, which produces relatively cheap energy at an environmental cost that鈥檚 becoming increasingly clear.

Two independent reports out this year by activist groups show that Canada鈥檚 Big Five banks鈥擱oyal Bank of Canada, TD Bank, Bank of Nova Scotia, Bank of Montreal and Canadian Imperial Bank of Commerce 鈥� supplied around $700 billion in funding and underwriting to fossil fuel companies since the world formally agreed to rein in greenhouse gases with the 2015 Paris Accords.

Reducing that access to capital is key because it can make fossil fuel projects more expensive, and potentially change the balance of whether it鈥檚 more worthwhile than the lower-carbon alternatives, said Keith Stewart, senior energy strategist with Greenpeace Canada.

鈥淏y choking off funding to fossil fuels, you鈥檙e creating greater urgency on the other side to find those projects and get them underway.鈥�

Canada鈥檚 big banks have also committed to mobilizing hundreds of billions of dollars in sustainable finance to help emission reduction efforts this year, but Stewart and others have raised concerns about the stringency of standards around that lending, and how Canadian standards, currently being drafted, could fall short of what the European Union has already established.

Overall, Stewart said the banks have been relatively slow to respond to the climate issue, and that they now want to be able to 鈥渟ell gasoline to the arsonists and water to the fire department.鈥�

Canadian banks have framed it more around taking a cautious, balanced approach.

Lindsay Patrick, head of strategic initiatives and ESG at RBC Capital Markets, said the bank is trying to advance financial, social, and environmental outcomes together.

鈥淭he balance is how fast do you reduce emissions, and at what disruption to any economic and social consequences might there be.鈥�

She said RBC, which has been particularly targeted by activists as the largest fossil fuel funder in Canada, had no plans to stop funding new projects.

鈥淲e continue to think there is a role for that sector to play, particularly as their end product continues to be consumed by the likes of all of us on a daily basis.鈥�

Patrick said that future funding for fossil fuel projects could theoretically open new, lower-emission production that could displace higher-emitting projects, but made no assurances.

Banks have been thin on details about how they plan to achieve net-zero financed emissions, so activists are watching closely for interim emissions targets and any plans to achieve them.

In their own net-zero announcements, banks haven鈥檛 said exactly when they would set those targets, but some indications for key sectors should start to emerge next year.

Meanwhile Carney鈥檚 net-zero club gives members 18 months to come up with targets, with the direction that they should set 2030 goals that represent 鈥渁 fair share鈥� of the halving of emissions needed by then.

Investors should also soon get a better sense of just how banks are financing emissions, after Canada鈥檚 Big Six all joined the Partnership for Carbon Accounting Financials as part of their net-zero commitments. The partnership standardizes reporting around financed emissions, with banks expected to release baseline data next year.

Banks can also expect increased activism in the year ahead. The example of Exxon Mobile Corp., where a small hedge fund managed to gather enough support to install three climate-focused directors over the company鈥檚 objections earlier this year may have provided a wake-up call about how quickly things can turn.

The commitments made so far show the banks are already aware of the growing pressure, said Anthony Schein, director of shareholder advocacy at the Shareholder Association for Research & Education.

鈥淚 think they鈥檝e been responsive to investors, to policy-makers, to the way the wind鈥檚 blowing. They鈥檝e started to make some really positive commitments in the last 12 months. They鈥檝e still a long way to go.鈥�

He said shareholder resolutions could focus on the banks committing to stop funding new fossil fuel projects, as well as pushing them to be faster, more detailed, and ambitious on interim targets. These more near-term details are needed because 2030 is within the range of capital budgets and of what companies are planning for now.

鈥淵esterday is the timeline of when we need to see those plans.鈥�

Ian Bickis, The Canadian Press

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