Scotiabank is the fifth bank in Canada to publicly refuse to bankroll industrial development in Alaska’s Arctic National Wildlife Refuge, the institution announced in a new policy released Monday.

“Scotiabank will not provide direct financing or project-specific financial and advisory services for activities that are directly related to the exploration, development or production of oil and gas within the Arctic Circle, including the Arctic National Wildlife Refuge,” the bank said in a statement.

Scotiabank joins the rest of Canada’s major financial institutions, including Royal Bank of Canada (RBC), Toronto Dominion (TD), Bank of Montreal (BMO) and Canadian Imperial Bank of Commerce (CIBC), in vowing not finance development in a roughly 1.6 million-acre oil-rich parcel of the refuge known as the coastal plain. 

The largest national wildlife refuge in the United States, the protected area is home to myriad sensitive species, including polar bears and the Porcupine caribou, a culturally sacred animal to the Gwich’in Nation and transboundary herd that undertakes one of the largest land mammal migrations on Earth.

The banks’ commitment comes as the Trump administration moves ahead with controversial plans to sell off oil leases in the development area early next month before president-elect Joe Biden takes office on Jan. 20, 2021. Biden campaigned on a pledge to permanently protect the refuge, calling Trump’s move to open the area to oil and gas development an “attack on federal lands and waters.”

All of Canada’s major financial institutions have now vowed not to finance development in the Arctic National Wildlife Refuge. Photo: Matt Jacques / The Narwhal

That all major Canadian financial institutions have agreed to not fund oil and gas drilling in the refuge is a testament to advocacy work by First Nations and conservation organizations, Dana Tizya-Tramm, Chief of the Vuntut Gwitchin First Nation, told The Narwhal.

“Scotiabank is respecting our people’s vision, you know, RBC is listening to my Elders, Bank of Montreal values our children growing up on caribou,” he said. “They see the value in this iconic herd.”

“I think the financial institutions have sent a very large signal to the rest of the world,” Tizya-Tramm said.

And while many are embracing the banks’ Arctic pledges, observers continue to note that Canada’s  banks remain heavily invested in fossil fuels. A report by the Rainforest Action Network released earlier this year, for instance, found Canada’s five major banks were among the world’s top financial backers of fossil fuel development.

Major U.S. banks pledged not to fund oil and gas drilling in refuge

The Gwich’in Steering Committee, which represents Gwich’in in the U.S. and Canada, spearheaded efforts to pressure U.S. banks against funding development in the refuge in 2018. 

Earlier this year, five major U.S. banks, including Goldman Sachs, Wells Fargo and J.P. Morgan Chase, pledged to not finance development in the refuge.

That likely influenced Canadian banks, said Malkolm Boothroyd, campaigns coordinator with the Yukon chapter of the Canadian Parks and Wilderness Society (CPAWS), which has been calling on Canadian institutions to drop funding for oil and gas development in the refuge since December 2019.

The announcements from Canadian banks comes on the heels of similar pledges from five major U.S. financial institutions, including Goldman Sachs, Wells Fargo and J.P. Morgan Chase. Photo: Matt Jacques / The Narwhal

“There are so many reasons for oil companies to be wary of pursuing leases in the Arctic refuge,” he said, noting the high costs of doing business in the remote region and skepticism over whether there’s actually enough oil available to warrant industry incursion. 

Every time a bank comes out with a new policy to avoid funding development, that adds yet another reason for companies to steer clear of the refuge, Boothroyd said.

In October, RBC, the largest bank in Canada, became the first financial institution to refuse to fund development in the refuge.

“Due to its particular ecological and social significance and vulnerability, RBC will not provide direct financing for any project or transaction that involves exploration or development in the ANWR,” RBC’s updated policy guideline states.

These announcements should act as a warning to companies regardless of the politics of the day, Boothroyd said.

“The financial world is lining up and saying that they wouldn’t provide a dime to these kinds of projects, so hopefully that will make any company think twice,” he said.

‘They’re respecting our human rights as Indigenous people’

To Bernadette Demientieff, executive director of the Gwich’in Steering Committee, the message from Canadian banks is clear: “It shows that more and more people are listening to the Indigenous voices, that they’re respecting our human rights as Indigenous people,” she said.

However, the fight to protect the refuge is far from over, she added.

Map showing overlap of 1002 area lands and the Porcupine caribou herd range. Map: Carol Linnitt / The Narwhal

Indigenous leaders are increasingly shifting their focus to insurers, Demientieff said. Without the support of insurance companies, prospective companies would have no safeguards in place should they encounter financial pitfalls.

Ensuring that Biden makes good on his promise to permanently protect the refuge is another priority for the committee, she added.

Biden made several campaign commitments to increase protections for the Arctic, including a moratorium on offshore drilling in the Arctic Ocean and prioritizing climate change at the Arctic Council, an intergovernmental body that seeks to address problems faced by people who live in the area. 

There are also several lawsuits fighting the Department of the Interior’s handling of the environmental assessment process. CPAWS Yukon, along with 12 others, allege that the Department of the Interior “broke the law by disregarding the refuge’s original purposes and failing to safeguard those purposes through the design of its oil and gas leasing program.”

Porcupine caribou cover the valley of the Hulahula river in the Brooks range mountains of the Arctic National Wildlife Refuge. Photo: Matt Jacques / The Narwhal

The National Audubon Society and the Center for Biological Diversity, among other U.S. groups, also launched a lawsuit against David Bernhardt, the secretary of the Department of Interior, who signed off on the record of decision.

And in September, attorneys general of 15 states sued the Trump administration, saying the move to open up part of the refuge to development “fails to fully evaluate and consider the devastating environmental impacts.”

“We’re not giving up, we’re gonna keep pushing,” Demientieff said. 

“This isn’t a job for us. We can’t go home at 5 o’clock and turn it off. This is our way of life. This is our identity. This is our food security, and we are spiritually and culturally connected to our lands, water and animals.”

“We are up against a very tough battle,” she continued. “We are up against a lot of money, but I really truly believe in my heart what I’m fighting for and I’m a strong believer in the power of prayer and I do believe we are going to stop this.”

‘We don’t want another Standing Rock’: Chief

Tizya-Tramm said his nation’s decision to bring advocacy efforts to financial institutions and corporate boardrooms was, in part, to keep citizens safe.

The refuge provides crucial habitat to the Porcupine caribou, a culturally important herd to the Gwich’in, who have relied on them for subsistence purposes from time immemorial. The Gwich’in, who live in Yukon, Northwest Territories and Alaska, refer to the refuge as “the sacred place where life begins.”

“I do not want to see our people having to go out onto the highways, set up picket lines and block machinery from going into this area,” Tizya-Tramm said. “Our people would be met with military, rubber bullets, pepper spray and dogs.” 

“We don’t want another Standing Rock,” he said, referring to the 2016 gathering of thousands of opponents of the Dakota Access Pipeline, which threatened water used by those on the nearby Standing Rock Sioux reservation. 

The event became a flashpoint issue for Indigenous Rights across the continent.

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.

Canada’s largest bank, the Royal Bank of Canada (RBC), has quietly become the first major financial institution in the country to refuse to fund any oil and gas development in the Arctic National Wildlife Refuge (ANWR) in Alaska.

“Due to its particular ecological and social significance and vulnerability, RBC will not provide direct financing for any project or transaction that involves exploration or development in the ANWR,” reads RBC’s updated policy guidelines for sensitive sectors and activities posted on Friday. 

RBC is “committed to finding ways to balance the transition to a low-carbon economy while supporting efforts to meet global energy needs and our energy clients,” Andrew Block, an RBC spokesperson, said in an email to The Narwhal.

The refuge, the largest of its kind in the United States, is home to myriad sensitive species, including polar bears and the Porcupine caribou, a transboundary herd that undertakes one of the largest land mammal migrations on Earth.

The bank’s pledge comes on the heels of a controversial U.S. decision to open up part of the Arctic National Wildlife Refuge to oil and gas development. The decision prompted swift reaction, with 13 environmental organizations taking the Department of the Interior to court.

Block said RBC has never financed any oil and gas development in the refuge, and noted the policy update is a “proactive decision” to ensure development isn’t funded in the future by the institution.

The bank also placed restrictions on financing the development of coal-fired power plants, thermal coal mines, mountain-top removal coal mines and development in UNESCO World Heritage Sites. RBC also now requires “enhanced due diligence” of any financing of energy exploration in the Arctic. A report by the Rainforest Action Network released earlier this year found RBC to be the biggest funder of fossil fuel development in Canada. 

Vuntut Gwitchin, Gwich’in Tribal Council and the Yukon chapter of the Canadian Parks and Wilderness Society have been putting pressure on major Canadian financial institutions to refuse to finance development — and withdraw any existing financing — in the refuge since last fall. 

Dana Tizya-Tramm, Chief of Vuntut Gwitchin First Nation, said RBC’s commitment marks the first time a Canadian bank has taken meaningful strides to consult with affected First Nations and made a decision based on those deliberations.

“This is a wonderful acknowledgement and vindication of our Elders, who spoke to the importance of the caribou. We are looking to all major banks in Canada to come into the sunlight with RBC,” he said, adding that meetings have also occurred with TD Canada Trust, the Bank of Montreal and Scotiabank, among others.

The Porcupine caribou, which migrate into Yukon, are of great cultural importance to the Gwich’in, who have harvested them for thousands of years and exercise subsistence harvesting rights.

“This is what true leadership looks like,” Tizya-Tramm said. “This movement speaks to responsible financing. They’ve really opened up a vacuum and created a whole new discussion.”

RBC joins other U.S. banks that have made similar commitments 

Earlier this year, five major U.S. banks, including Goldman Sachs, Wells Fargo and J.P. Morgan Chase, pledged to not finance development in the refuge.

Chris Rider, executive director of the Yukon chapter of the Canadian Parks and Wilderness Society, said RBC’s decision sends a clear message that investment in the Arctic National Wildlife Refuge is risky. 

“This is sending a strong message that this is a project that is not going to work and that this is a project that companies aren’t going to be able to get capital for, if they do want to pursue it,” he said.

“It shows that banks like RBC are recognizing both the moral importance of protecting landscapes like the Arctic refuge and also simply that it makes good economic sense.”  

When Goldman Sachs committed to not fund development, others followed its lead “almost immediately,” Rider said.

He said this domino effect could occur in Canada, too.

“We hope to see the rest of Canada’s major banks follow suit,” Rider said. “We will be stepping up the campaign in the coming months until they do that.”

Map showing overlap of 1002 area lands, proposed for oil drilling, and the Porcupine caribou herd range. Illustration: Carol Linnitt / The Narwhal

How RBC assesses projects that may come with a risk

RBC evaluates all potential transactions through an environmental and social risk management process.

“A client’s environmental and social issues can affect their cash flow, their ability to operate, or the ability to grow their business,” according to a policy summary. “Our experience and knowledge along with our policies and processes help us identify and manage risks associated with a client’s environmental and social issues, minimizing our exposure to credit, reputational, regulatory and legal risk.”

Risk could be foisted onto RBC if a company has a history of spills, costs related to fines and remediation efforts or they default on loans, it says.

The bank assesses risk by visiting sites and conducting third-party environmental assessments, the summary says. 

Resource and energy development in the Arctic is deemed as “high risk” in a policy guidelines document.

“RBC recognizes the natural and cultural significance of the Arctic ecosystem that is threatened by a number of factors, including climate change,” it says. “The harsh conditions and fragile ecosystems make it a particularly vulnerable and challenging region for energy and resource development projects.”

Updated at 3:15 p.m. PST to add more detail about RBC’s new policy guidelines and add reference to a report by the Rainforest Action Network.

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.