BankTrack
For any feedback or questions on this page please contact us at climate@banktrack.org
Share this page:
Banking on Climate Change 2020 - Tar sands. Photo: Rainforest Action Network (RAN)Go directly to: tar sands policy table or tar sands exclusion table
What are tar sands?
Tar sands, also known by the fossil fuel industry as oil sands, are a type of unconventional fossil fuel. Tar sands consist of a mixture of clay, sand, water and a very thick, highly viscous form of oil often referred to as bitumen. Crude bitumen is so thick that it usually cannot be recovered through a well, so other extraction methods are needed. The two most commonly used extraction methods are ‘in-situ’ mining, where steam is used to liquify bitumen deep in the ground, and ‘surface mining’, where the extraction site is excavated. Most of the world’s proven tar sands reserves are in the province of Alberta, Canada.
Surface mining of tar sands involves clearing large sections of boreal forest. The tar sands extraction and refining process also puts a heavy burden on fresh water supplies, consuming about six units of water for each unit of tar sands gasoline produced. The resulting waste water is highly toxic and often ends up stored in dangerous ‘tailings ponds’. Due to these unconventional extraction and refining methods, Canadian tar sands emit about 31% more greenhouse gases over their entire life cycle than average North American crude. The extraction of tar sands, and its transport by pipelines, is also linked to many other environmental and human rights issues such as water pollution, increased rates of cancer, disruption of habitat, air pollution and disruption, and violations of the collective human rights of Indigenous People.
Banks and tar sands
The severity of the climate crisis requires that banks must urgently take steps to disengage from financing all business activities and projects that continue the world's reliance on fossil fuels. Banks must therefore end support for all new tar sand projects and implement a full phase-out for financing tar sands, in line with the Paris climate agreement.
The world’s biggest financiers of tar sands are the Canadian banks TD and RBC. In the four years since the Paris climate agreement (2016-2019), both these banks poured about USD 22 billion into tar sands. Other major financiers of tar sands are JP Morgan Chase and Canadian banks CIBC, Bank of Montreal and Scotiabank.
Bank policies on tar sands are scored below. These scores were originally published in our Banking on Climate Change 2020 report, and any policy changes implemented since then have been assessed using the same methodology. The details section in the table contains further detail on the exact scoring per bank, as well as an overview of relevant policies.
See here for banks' exposure to the tar sands sector in 2016-2019.
Bank policy scores on tar sands
The point-based policy ranking above assesses bank policies in four ways:
1) Restriction on direct financing for tar sands projects.
-
None (0), weak exclusion (1.5), moderate exclusion (3), strong exclusion (4)
2) Restriction on financing for companies that expand tar sands.
-
None (0), weak exclusion (3), strong exclusion (5)
3) The bank’s commitment to phase-out financing for tar sands.
-
None (0), reduction (1.5), weak phase-out (3), strong phase-out (5)
4) The bank’s commitment to exclude companies active in tar sands above a certain threshold.
-
None (0), enhanced due diligence (0.5), weak exclusion threshold (2), strong exclusion threshold (5), full exclusion (6)
A bank can obtain a total of 20 policy points for its tar sands policy. Based on this score banks are then classified as laggards (0-5 points), followers (5.5-10 points), front runners (10.5-15 points) or leaders (15.5-20 points).
Banks excluding finance for tar sands
A number of banks have already taken steps to fully or partially exclude tar sand projects or companies involved in tar sand operations from their investments. The table below lists banks that have taken such steps.
Exclusion table tar sands
This table lists banks that have adopted a full ( ) or partial ( ) exclusion policy for tar sands projects and/or companies. Click on 'Details' for the rationale of this assessment for each bank.
Feedback welcome
Our policy assessments are always a work in progress and we very much welcome any feedback, especially from banks included in them. Please get in touch at climate@banktrack.org.