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Despite an underlying economy that’s heavily resource driven, Canada’s big banks are increasingly trying to go green, says DBRS Morningstar.

The rating agency examined the environmental efforts of the Canadian banks — ranging from greening their own operations to altering their lending practices to stepping up their disclosure commitments.

The banks have made a concerted push to get greener through efforts such as seeking carbon neutrality in their operations and leading in environmental building design, the DBRS report said.

They’ve also signed on to important global initiatives such as the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD), the Carbon Disclosure Project and the UN Principles for Responsible Investing, the report said.

On the financing front, five of the large banks have also begun issuing either sustainable bonds or green bonds to fund environmental projects.

“Although the amount of funding provided by these bonds is very small, the issuances have been very well received by investors, especially outside Canada, and the appetite exists for further growth in this market,” it said.

At the same time, the banks “have also been actively ‘greening’ their lending practices and advising clients on environmentally sound projects,” it said.

As a result, their loan portfolio exposure to environmental risks is declining, the report noted, though the energy industry’s importance to the Canadian economy means the large banks will continue to provide financial services to the sector.

“The banks’ efforts to become greener are underway,” said Maria-Gabriella Khoury, senior vice president at DBRS Morningstar.

“To the extent that oil and other fossil fuels remain important contributors to the Canadian economy, we expect the large Canadian banks will continue to play a role in financing the sector. Nevertheless, these banks have all made progress towards their goals for developing environmentally friendly operations, funding sources, and business practices,” she said.

The Canadian government and the Bank of Canada’s efforts to shift to a more sustainable economy “will provide opportunities for Canadian banks to finance the transition of firms who are going green, particularly carbon-intensive companies that are implementing projects to significantly reduce their associated greenhouse gas emissions,” the report said.