On Monday, May 13^th, elected officials came together to discuss their strategies for advancing Canada’s climate goals through sustainable finance, ensuring Canada builds a resilient economy and healthy environment.

We were joined by:

• Senator Rosa Galvez
• Ryan Turnbull, Liberal Member of Parliament Whitby; and Parliamentary Secretary to the Minister of Innovation, Science and Industry
• Elizabeth May, Party Leader of the Green Party of Canada; and Member of Parliament Saanich—Gulf Islands
• Monique Pauzé, Bloc Québécois Member of Parliament, Repentigny
• Laurel Collins, NDP Member of Parliament

Canada has committed to climate action both internationally and domestically. As part of Canada’s commitment to the Paris Agreement, the government pledged to cut emissions by at least 40-45 per cent below 2005 levels by 2030. These policymakers spoke about how Canada can achieve these goals by ensuring alignment from Canada’s whole financial system, including banks, pension funds, and insurance companies.

Some of the policies and tools they focused on:

• The Climate-Aligned Finance Act, a bill that is progressing through the Senate that would ensure financial institutions’ investments help limit climate damage, and would protect the financial system from climate risks. The bill is currently under review by the Standing Senate Committee on Banking, Commerce and the Economy.
• Motion 84, which was tabled in the house and continues to encourage conversation on how to use all legislative and regulatory tools at the government’s disposal to align Canada’s financial system with the Paris Agreement.
• Canada’s taxonomy which would define which projects and industries could be eligible for a sustainability label, with an aim to attract sustainable investment and reduce greenwashing in financial markets.
• Mandatory reporting on climate transition plans from companies in Canada, including demonstrating strategies are in place to reduce emissions, and requiring reports on progress of those targets.

As our governments and institutions grapple with the climate crisis, the financial sector plays a crucial role in ensuring we succeed in reducing emissions and building climate resilience. These policies are key to making that happen.

Both frustration and optimism were expressed during the webinar. Each policymaker expressed progress they have been working on to advance these key policies, and articulated what they think needs to happen next. At this pivotal moment, Canada should choose to be a leader in climate change adaptation and mitigation, and has a moral obligation to do so.

Morals aside, many experts assert that there are legal arguments for Canada’s financial institutions and their board of directors to address climate change risk. For example, the Bank Act requires directors and officers of a bank to “act honestly and in good faith with a view to the best interests of the bank, and to exercise the care, diligence, and skill that a reasonably prudent person would exercise in comparable circumstances.” According to Dr. Janis Sarra, the board’s oversight must include being satisfied that senior management is developing and implementing an effective climate transition plan to manage the bank’s short-, medium-, and long-term risks, opportunities, and strategies in the transition to a net-zero greenhouse gas emissions (GHG) economy.

Or as one webinar participant wrote in the Questions & Answers box: “If the financial sector’s mandate is to ‘maximize profits’, why wouldn’t that sector focus naturally and urgently on mitigating the massive financial losses ($billions $trillions) caused in Canada & globally by GHG-driven extreme weather? Isn’t serious climate action clearly in the sector’s self-interest?”

Yet research shows that the largest banks in Canada have not yet taken the required action to align their business practices with their own net-zero commitments. Pension funds are, in general, similarly not yet delivering long-term financial security and climate action at the scale required.

To create good jobs, help prevent climate catastrophe, and increase Canada’s global competitiveness, climate-aligned financial policy is the missing piece of Canada’s climate plan. The parliamentarians on this webinar have made notable efforts to fill this gap, and we look forward to ongoing progress leading to the upcoming election year.

Hear from our elected leaders directly: