Canada’s largest association of credit unions has temporarily put a halt to the financing of energy pipeline projects, and says it may make it a permanent ban this fall 2017 following closer analysis.

Desjardins Group, a financial institution with total assets of $258 billion according to its most recent annual report (more than the National Bank of Canada, Canada’s sixth-largest), is a minor partner in the funding consortium behind Kinder Morgan’s Trans Mountain Pipeline expansion. The announcement of the temporary moratorium does not affect that investment, but its impact may be felt by other project proponents seeking pipeline financing.

The decision by Desjardins may be one of principle, or sound business, or a bit of both.

“This decision shows that astute financial institutions are becoming increasingly wary of financing fossil fuel projects. Tar sands pipelines pose major risks, whether you are concerned about profits, human rights, the environment, or all three,” said Greenpeace Canada Climate and Energy Campaigner Patrick Bonin in a release applauding the decision. Greenpeace said it was in communication with Desjardins and met with them the week prior to the decision to press them to cease financing oil sands pipeline projects.

However, organizations such as the UK-based Carbon Tracker have also been sounding alarm bells since at least 2013, warning companies and investors that expensive investments in fossil-fuel infrastructure risk becoming stranded assets in a carbon-constrained world (see, for instance, here).

The announcement from Desjardins is not unique. According to a statement posted on its global website, Netherlands-headquartered ING has as a matter of policy avoided “transactions that are directly linked to the mining, exploration, transportation and processing of oil sands.” Specifically, this includes the financing of the Trans Mountain, Keystone XL, Energy East and Line 3 pipeline projects.

And on June 15, 2017, news agency Reuters reported that Sweden’s largest national pension fund, AP7, had sold its holdings in six companies, including TransCanada Corp., whose operations it said were in breach of the Paris climate agreement.

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