Scotiabank has become the first Canadian bank to publish its Energy Supply Financing Ratio (ESFR or ESR). Meanwhile, RBC and CIBC have only published their methodologies, not the resulting ratio [1]. Scotiabank follows the approach of other North American banks by including capital market activities (such as bonds) and covering the entire fossil fuel value chain, further widening the gap with French banks.
In its latest sustainability report [2], Scotiabank discloses an ESFR of 0.65:1 for 2025. This means that for every dollar allocated to fossil fuels—referred to as “conventional energy”—the bank allocated 65 cents to “low-carbon” energy.
The methodology has several strengths: financing for fossil fuels are considered across their entire value chain, and include not only loans but also capital market activities, such as bonds. These elements align with the practices of its North American peers [3] and the recommendations of sectoral actors such as Bloomberg New Energy Finance (BNEF) and the Louis Bachelier Institute. They form a minimum baseline for any credible ESFR approach.
However, significant limitations remain. The “low-carbon” scope includes activities linked to fossil fuels, such as carbon capture and storage (CCUS) and hydrogen produced from fossil fuels. More problematic is the publication of a “complementary ESFR,” in which fossil gas financing is counted not on the “fossil” side of the ratio, but on the “low-carbon” side. This approach perpetuates the misleading idea that fossil gas is a transition energy, despite its well-documented negative impacts—including worsening climate change, ecosystem destruction, human rights violations, health degradation, and energy price crises. Banks, including Scotiabank, should immediately stop supporting its expansion and instead plan for a rapid and phased exit, rather than promoting gas industry myths.
Analysis of Scotiabank’s ESFR methodology [4]
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CIBC published its methodology in March 2026, similar to Scotiabank’s in both positive (covering the full fossil fuel value chain and bonds) and negative aspects (including CCUS, fossil hydrogen, and bioenergy in the “low-carbon” scope).
Analysis of CIBC’s ESFR methodology [5]
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Despite its limitations, Scotiabank’s methodology highlights the lag of French banks and underscores priorities for enhancing the credibility of their ratios. While BNP Paribas and Crédit Agricole are the only French banks to have set medium-term ratio targets, their methodologies are too weak to ensure that meeting these targets will align with the needs of the energy transition [6]. As it stands, the ratios of BNP Paribas, Crédit Agricole, and BPCE appear more as greenwashing attempts than genuine efforts toward transparency and reorienting their financing for the energy sector. French banks should prioritize expanding their scope to cover the entire fossil fuel value chain and include bonds. Meanwhile, CIBC and RBC are now expected to publish their own ratios. Finally, while transparency is welcome, it is not enough: North American banks must now set ESFR targets for 2030 to ensure the shift of their financing for the energy sector.
