Greenpeace Canada is campaigning against TD Bank for its financing of four tar sands pipelines. We are calling on TD to refuse to participate or underwrite any financial agreements or loans which facilitate the construction or expansion of tar sand pipelines.
Q. Why campaign against TD Bank for their financing of tar sands pipelines?
A. TD is one of the key financiers for the proposed expansion of one of the dirtiest sources of energy on the planet — Canada’s tar sands. For more information on the environmental and social impacts of tar sands oil, read here.
Based on information gathered from SEC filings and the Bloomberg Business Terminal, TD participated in 13 of the 18 credit facilities active this year that banks have provided to the three pipeline companies (Kinder Morgan, TransCanada, Enbridge) proposing to build four pipelines (Trans Mountain expansion, Keystone XL, Energy East, Line 3) to transport tar sands to refineries and markets. TD was the lead agent in four of those deals – more than any other bank – and it participated in every one of the credit facilities for both Kinder Morgan and TransCanada. TD played a lead role in arranging Kinder Morgan’s $5.5B project loan to build its Trans Mountain pipeline expansion, and according to research published by the National Observer, overall TD has helped Kinder Morgan obtain $731M for its pipeline, more than any other bank.
(If you’re asking yourself “what is a line of credit” or a “lead agent”, or need a refresher on some of the technical terms, read our Fossil Fuel Financing 101 summary. All the finance terms we use below are described in this backgrounder.)
TD played a key role in the Initial Public Offering (IPO) for Kinder Morgan Canada, where the US parent company sold shares in a new Canadian subsidiary to help finance the proposed Trans Mountain pipeline. TD also facilitated a recent a share offering by TransCanada and helped lead a $1B bond sale by Enbridge earlier this year.
TD is seen as a leader in the financial community, and if it joined ING in refusing to finance tar sands projects and pipelines, it could encourage other banks to take a second look as well.
Q. Why is it important to focus on lead agent banks?
A. Lead agent banks play a crucial role in making these loans happen, and if they walk away from renewing these credit facilities that will make it harder, and possibly more expensive, for the pipeline companies to finance their projects. Lead agents do the work required to organize the other lenders in the agreement, make sure the paperwork is squared away, and perform due diligence on the environmental, social and financial risks of the loan.
If a lead agent decides not participate in renewing a loan that they themselves put together because they recognize the serious concerns people have about the threats pipelines pose to our environment and Indigenous rights, the pipeline companies will have to look elsewhere for another bank to organize the financing. This could introduce significant delays, tarnish the reputation of the project among investors, and potentially raise the costs of financing the project.
Finally, the pipeline companies may seek out additional financing beyond the credit facilities that have been made public so far. They may seek to offer equity shares in the pipeline through a share offering, they may seek out a specific project loan (as Energy Transfer Partners did with the Dakota Access Pipeline) or they may seek to raise money through bond issuances. All these methods of raising capital involve banks, and so campaigning against key lead agent banks now puts them on notice that they should stay far away from any additional financing for these projects.
Q. When will financial decision on these pipelines be made?
A. Because many of TD’s credit facilities are maturing and come up for renewal in 2017-18, the time is ripe to ask TD to do the right thing for people, the planet, and ultimately the bottom line. The maturity date is a moment in time when the parties are able to renegotiate the terms of the loan agreement and decide whether or not to continue with it.
Most of these pipelines are still in the planning phases, meaning the full financing has not been worked out yet. Kinder Morgan’s Trans Mountain pipeline is scheduled to begin construction this month, and earlier this year they concluded an (not entirely successful) IPO to raise capital for the project.
TransCanada’s Keystone XL and Enbridge’s Line 3 projects are still going through permitting and regulatory approval, meaning there might still be time to influence large banks to stop supporting the projects before they move ahead.
Q. What do I need to know about TD Bank anyway?
A. In terms of size TD Bank is in the top two of the “Big Five” banks that dominate the Canadian banking sector. Like many large financial institutions they are involved in almost all aspects of the financial world — from retail banking and credit cards, to corporate finance and hedge funds. They are headquartered in Toronto and their CEO is Bharat Masrani. You can read more about how they stack up against other banks on various fossil fuel projects by reading this collaborative report from our partner organizations.

Q. What has TD said about climate change?

A. TD says that “Climate change is a megatrend that has wide-ranging and long-term implications for global economies. Climate change-related risk has the potential to affect virtually every area of business in the financial services sector. But there are also opportunities to support our customers in the transition to a lower-carbon economy and to enhance the resilience of manmade structures.”
TD says that it addresses these risks via a “responsible finance” approach and that they are revising this approach in light of the Paris climate agreement: “One of our greatest opportunities to facilitate environmental progress in society is through lending and banking solutions. As a responsible bank, we need to align with commitments made by our governments to support the growth of the North American economy while also promoting the transition to a lower-carbon world…. The Paris Agreement in 2015 triggered numerous government actions aimed at driving the transition toward a lower-carbon economy while continuing to support traditional fossil fuel industries that are key to the North American economy. TD is involved with all aspects of energy supply, and in 2016 we updated TD’s Energy and Environment Position to reflect our approach to balancing economic and environmental interests within the rapidly changing energy landscape.”
Investing in the expansion of tar sands production, or the pipelines that facilitate this expansion, is clearly inconsistent with a rapid decarbonization of the economy. That is why we are asking TD to follow the lead of ING and step away from pipeline projects for good.
Q. What has TD said about human rights?
A. TD is a signatory to the Equator Principles and the UN Principles for Responsible Investment, which require companies to conduct human rights due diligence prior to entering into businesses, especially with regard to Indigenous People. TD also claims to “promote Indigenous rights and support the principle of free, prior and informed consent (FPIC), with our commitment reflected in TD’s Environmental Policy and Environmental Management System.”
The proposed tar sands pipelines do not have the permission of many Indigenous communities and First Nations along the pipeline routes and/or directly affected by the pipelines. Over 120 First Nations across Canada and the U.S. have signed the Treaty Alliance Against Tar Sands Expansion. 130 First Nations and their allies have signed the Save the Fraser Declaration to specifically oppose Kinder Morgan’s Trans Mountain Expansion Project which is also currently the subject of 11 legal challenges from First Nations alleging infringements of their rights.
Which is all the more reason TD shouldn’t be anywhere near these pipeline companies or the proposed pipeline infrastructure finances.
Q. Any other TD policies I should know about?
TD says that its “environmental responsibilities stretch beyond our own business operation and extend to the activities that we finance through both lending and investing.” It also states that its Environmental and Social Credit Risk Management Procedures include “assessment of TD’s clients’ policies, procedures, and performance on material environmental and related social issues, such as air, land, and water risk, climate risk, biodiversity, stakeholder engagement, and free prior and informed consent (FPIC) of Aboriginal peoples.”
Yet despite these commendable commitments TD decided to finance pipelines that threaten to pollute water, harm wildlife, destabilize the climate, and violate Indigenous rights. For a bank that presents itself as green, it seems to be doing an awful lot of greenwash.
TD has publicly committed to “not lend money for transactions that would involve activities within World Heritage sites,” even as it provide hundreds of millions to Kinder Morgan to build a pipeline that would pass through Jasper National Park, a UNESCO World Heritage Site, threatening it with devastating spills (Kinder Morgan’s existing pipeline in Jasper has already spilled a six times).


The information on this page is not financial advice, investment advice, or trading advice.


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I am very disappointed in an organisation like TD Friends of the Environment is associated with funding pipelines. I am a TD Bank customer and have been for my whole adult life but I am seriously considering making changes. Please stop funding pipelines.


Disappointed in your organization supporting kinder Morgan