BMO Capital Markets continues support for energy deals: press
SUMMARY
As climate pressure grows, the CEO of Canada's 8th largest bank stands behind hydrocarbons
By Maureen McCallPOSTED IN:
Despite increasing pressure to halt lending to fossil fuel companies, BMO Capital Markets CEO Dan Barclay said he stands by traditional oil and gas firms, according to a January 17 BNN Bloomberg report.
The world’s biggest banks, including Canada's BMO which is the 8th largest, have been under intense pressure to stop funding new oil and gas ventures.
In its controversial 2021 report, Net Zero by 2050: a Roadmap for the Global Energy Sector, the International Energy Agency called for no new investments in fossil fuels in order to stop exploration and development of new oil and gas fields and achieve net zero by 2050.
Globally, big banks have been under intense pressure to curtail financial support and Canada’s BMO is no exception. Barclay said until there is sufficient support for “new” energy, traditional oil and gas firms can’t be abandoned.
“What we’ve learned in the last little while is we haven’t had enough investment in the ‘new.’ And so we need to have a very, very thoughtful and progressive transition,” he said.
Barclay sees the need for significant work on infrastructure development to achieve that transition which will require a longer timeline.
“Simple things like the electricity grid to power [electric] cars – we have a long way to go to make that grid robust enough…nevermind charging stations,” he said.
Changes are coming in how Canadian banks approach financing oil and gas but Barclay expects another strong year of M&A activity this year and sees a strong role for BMO.
“We believe in energy and we believe in the Canadian energy story in particular, and we believe in a smart transition. So we’ll continue to support our clients in the energy business, especially those that are doing a smart transition to a lower-carbon future.”
