TORONTO, June 13 (Reuters) - The CEOs of Canada's big

five banks on Thursday reassured members of parliament about

their commitment to fighting climate change, but said reducing

funding for fossil fuel extraction would take time and more

works need to be done to reach net zero emissions.

In a rare meeting, MPs grilled the heads of Royal Bank of

Canada ( RY ), TD Bank Bank of Montreal, Bank

of Nova Scotia ( BNS ) and CIBC appeared via videolink

before a House of Commons committee to answer questions about

any steps their banks are taking to help reduce greenhouse gas

emissions and steer away from fossil fuel funding.

Canadian banks, among the biggest oil and gas financiers in

the world, have come under pressure over recent years with

demands to change their lending practices that contribute to

climate change.

The five banks financed about $104 billion to fossil fuels

last year, 13% of the value of the deals covered from global

banks, according to a recent report.

The banking and oil and gas industries contribute roughly

about 3% to 5% to Canada's gross domestic product.

"Energy is still a big part of the Canadian economy. And

therefore, we have to continue to support the economy as we make

the transition, you have to do both, can't just do one," RBC CEO

Dave McKay said in response to a member of parliament's

questions.

The banks have all set climate goals but members questioned

the lack of commitment to only finance companies if the projects

are verified to have an impact that will reduce the greenhouse

gas emissions significantly.

"I think that's part of the problem- is that the commitments

are vague. We're talking about sustainable investments. There's

no real definition around it. There's not a lot of transparency

around it," MP Leah Taylor Roy said.

The banks' short and long-term emissions reduction targets

includes net-zero in operations and financed emissions by 2050,

while helping clients to make the transition.

Canada, the world's fourth-largest oil producer, has pledged

to cut greenhouse gas emissions 40% to 45% below 2005 levels by

2030.

TD's CEO Bharat Masrani said it would follow an "orderly

transition" and support responsible oil and gas industry

responsible while making sure the bank provides capital and

investment to move to a net-zero world.

Meanwhile, environment activists criticised the lack of a

commensurate plan of action.

"The investments they make are holding the country back from

climate progress and, until now, there had been no signs they

would be held to account," said Julie Segal, senior manager of

climate finance at Environmental Defence Canada said.