Desjardins Group lifts moratorium on pipeline lending

Credit union vows to apply new rules to loan applications

CALGARY A moratorium on loans for energy pipeline projects has been lifted, Desjardins Group said Wednesday, as it vowed to consider environmental, social and governance practices of clients in all lending decisions.

The decision in July to temporarily stop pipeline loans was applauded by environmental groups and First Nations opposed to oilsands development who urged the Quebec credit union to make the freeze permanent.

They also asked Desjardins to withdraw from pipeline lending commitments such as its $145-million stake in a loan package for Kinder Morgan Canada Ltd.’s Trans Mountain pipeline expansion project to send more oilsands crude from Alberta to the West Coast.

But CEO Guy Cormier said Wednesday the credit union will continue to live up to its agreements with energy companies after extensive consultations with supporters and opponents of the oil and gas sector over the past four months.

“It means that the moratorium we put on in July now is replaced by the application of the ESG (environmental, social and governance) criteria, not only for the energy sector but all the different business sectors we invest in,” he said.

“We want to work with the sector to support the transition to clean energy.”

The decision to adopt new criteria for business decisions was welcomed by Patrick Bonin, climate and energy campaigner at Greenpeace Canada, but he said it is disappointing Desjardins is not reassessing its existing loan portfolio.

“Although today’s announcement shows some important progress, such as investments in renewable energy projects, Desjardins failed to act consistently,” he said in an emailed statement.

“The Desjardins Group is turning its back to First Nations who oppose the (Kinder Morgan) project and is undermining the fight against climate change.”

He said Desjardins is falling short of lenders who distanced themselves from doing business in the oilsands sector, such as the French bank BNP Paribas and Dutch bank ING.

Grand Chief Stewart Phillip of the Union of B.C. Indian Chiefs said the Desjardins decision is “deeply disappointing” and suggested his group and others may target the lender with protests.

“They are motivated by the very shallow values of corporate greed and they have chosen to feed off the dying carcass of the fossil fuel industry,” he said.

Cormier said oil and gas investments represent about $6.6 billion out of $276 billion in Desjardins assets.

He said the company will move to a carbon-neutral state by offsetting its greenhouse gas emissions through the purchase of carbon credits starting this year. He vowed to ensure that by 2020 the emissions from companies in its investment portfolio are 25 per cent lower than the average of companies in stock and bond market indexes.

Before making an investment, he said Desjardins will assess whether the partner has consulted with affected communities, such as First Nations, and has a plan to manage its carbon footprint.

On Wednesday, Kinder Morgan announced it would raise up to $250 million by selling preferred shares through underwriters led by CIBC Capital Markets, Scotiabank, RBC Capital Markets and TD Securities.

Cormier said Desjardins is not involved in the offering.