How significant is the ESG backlash in many US states to Canadian banks that have large US operations?
A recent article in the Globe & Mail “Canadian banks caught in ESG backlash from U.S. state officials” outlines this unfortunate (in my opinion) trend.
The article refers to TD in particular, but lists large US banks that have also been impacted by this anti-ESG stance.
Thanks for your insight.
The article noted that West Virginia State Treasurer Riley Moore placed TD Bank and three other banks on its restricted financial institutions list. As a result, they will not be allowed to provide banking services to the state. The Treasurer has an anti-ESG stance and is pretty much saying that they will not deal with the banks it has identified as "boycotting fossil fuel companies." It is tough to gauge the impact of this and if it really has any significant impact at all. This list was initially published in 2022 with four banks and now includes a total of seven which includes pretty much all of the largest Banks in America. It seems a bit extreme as Banks have legally mandated caps on financed emissions as a response to ESG concerns given that fossil fuel companies can be some of the Banks largest customers. It does not seem overly significant given that pretty much every other large bank is included in this list.