January 26, 2019

Time to Act: Response to questions posed by the Expert Panel on Sustainable Finance on Fiduciary Obligation and Effective Climate-related Financial Disclosures

The Expert Panel on Sustainable Finance has been commissioned by the Canadian Government to determine how best to generate sustainable finance, a significant challenge given the carbon intensity of Canada’s economy. The Expert Panel has defined sustainable finance as capital flows, risk management activities and financial processes that assimilate environmental and social factors as a means of promoting sustainable economic growth and the long-term stability of the financial system. While there are numerous strategies to be deployed to move Canada to a financially sustainable future, this report addresses two critically important issues: fiduciary obligation of corporate- and pension-fiduciaries, and national action on environmental, social and governance (“ESG”) financial disclosure, including climate-related financial risk disclosure.

Our economy is facing significant challenges and disruptions in the transition to a lower carbon world. Our view is that absent clear and innovative steps to ensure our corporations and financial institutions act to address carbon emissions and other environmental, social and governance risks and opportunities, we will be seriously prejudiced in a world that is rapidly moving towards greener and more sustainable economic activity. Our report offers a comprehensive set of recommendations on these fiduciary obligation and disclosure.