Earlier this month, over 600 people from across Canada joined the Sustainable Finance Forum in Ottawa to press for policy needed to build a sustainable economy. Industry experts, civil society, non-profit organizations, academics, and parliamentarians came together to create a financial sector that addresses challenges of the 21^st century, including the climate crisis and housing, food, and energy affordability. It was an occasion to call for prompt policy action to ensure Canada’s financial sector and Canadians are resilient to environmental and climate risks while creating greater quality of life. 

Members of the Canada Climate Law Initiative (CCLI) team participated in the Sustainable Finance Forum to raise awareness of necessary policy changes, in particular regarding the green and transition financial taxonomy and mandatory corporate disclosures, and engage with federal legislators and policymakers.

Growing collaboration

Dr. Janis Sarra and I attended the Forum with Ed Ma, K.C., CCLI advisory committee member and expert. In addition to his role as VP General Counsel and Corporate Secretary at Thinkific Labs, Ed will continue to work with CCLI to develop policy recommendations, leading meetings with government officials, regulators, and policymakers. He brings more than ten years of experience in the energy and climate change policy sector. He was previously the Senior Strategy Advisor on Energy & Climate Change Policy at Suncor. He serves as an Advisor to the Minister of Environment & Climate Change Canada’s Sustainable Development Advisory Council, and he is a former Director and Canadian Chair of the International Emissions Trading Association. As a business-minded strategic advisor, we are delighted Ed will support us in making policy recommendations.

The three of us officially represented CCLI at the Forum and many people from our community of Climate Governance Experts attended the Forum to share their expertise and engage in this national dialogue. The large representation allowed us to gather insights from multiple panels. Here are some of my takeaways:

Sustainable finance and social finance go hand in hand

The first day of the Forum focused on sustainable finance and the policy changes needed to finance the transition to a net-zero emissions economy, while the second day of the Forum concentrated on social finance and the need to build an economy that is more inclusive. Even though these two subtopics were separated during the Forum, it is important to understand that sustainability and social issues are interconnected.

Indigenous Peoples, people of colour, youth, women, and other marginalized communities are disproportionately affected by climate change impacts, but they often don’t get a seat at decision-making tables. Not including them is dangerous to these communities’ survival and closing the doors to these communities is a deterrent to building a sustainable, resilience, and inclusive economy. Many of these communities have unique expertise that can help develop inclusive climate-aligned policies.

Along with other panelists, Member of Parliament Ryan Turnbull highlighted the need to develop system-focused changes driven by people because know-how lies in communities. He stated that we will build strong communities if we develop risk-informed and inclusive finance policies aligned with the climate transition.

Specificity over ambiguity

The word “specific” was brought up repeatedly at the Forum. For corporate disclosures, taxonomy and clean and social procurement, specific, high quality, transparent and comparable information is vital.

Corporate climate-related financial disclosures should be specific to help companies assess their progress year over year, against their peers and themselves. While data availability, reliability, and comparability may be challenging for companies, stakeholders should work together to overcome these data gaps and reduce ambiguity. Gildas Poissonnier, Chief Sustainability Officer of Desjardins Group, pointed out that public data is often irrelevant for institutional investors because it is heterogeneous, backward-looking, insufficient, and a lot of information focuses on climate physical risk but not enough on transition risk.

Mandatory disclosures would also help attract capital for Canadian businesses as investors are increasingly looking for climate and green opportunities. The annual investment gap to achieve our climate commitments is estimated to be has high as $115 billion. We must strengthen the infrastructure around climate disclosures to help investors access decision-useful information to effectively price and manage climate-related risks.

“Reporting will be a proxy for action.”

– Jonathan Fowlie, Chief External Relations Officer, Vancity

The green and transition financial taxonomy is a missing policy piece that will help provide investors the information they need. The taxonomy is a classification system to help investors make investment decisions by categorizing what is a “green” and “transition” investment. Countless countries, including Chile, Japan, Australia, the European Union, have developed taxonomies. They have done so regardless of the make up of their economy.

At the Forum, Roger Beauchemin, President and CEO of Addenda Capital, pointed out that investors need clarity and price signals to unlock capital. As Mark Carney, former Governor of the Bank of Canada, said, “the financial plumbing is vital to build a sustainable economy.” The government of Canada needs to advance the Sustainable Finance Action Council’s recommendations for a Taxonomy Council as soon as possible to accelerate capital investment into sustainable assets and projects.

Specificity also came up under the umbrella of social and clean procurement. There is a huge opportunity for governments and companies to develop sustainable procurement policies that embed social impact and circular economy. But to do so, contracts need to be specific. Procurement should embed the clean and social impact in contracts and add consequences if they are not achieved.

A call for swift action

While policies take time to develop, the window for action is getting smaller. Participants of the Forum were clear: we need rapid and bold policies, regulations and guidance that support sustainable finance and a net-zero emissions economy.

During the Sustainable Finance Forum, many successful examples in Canada and across the world were shared on Indigenous reconciliation, mandatory corporate disclosures, impact investment, affordable housing, and more. We must continue to advocate for sustainable finance policies, engage with communities, and rise over partisan politics when it comes to issues like climate change.

“When you’re successful on prevention, no one will pat you on the back.”

– Harjit Saijan, Minister of Emergency Preparedness and Minister responsible for the Pacific Economic Development Agency of Canada

Some might say “we didn’t need these sustainability policies and actions,” but preventing climate-related disasters is essential. Let’s implement key policies to ensure Canada’s economy is resilient to climate change and inclusive for all Canadians. Because as Minister Chrystia Freeland said, “climate policy is economic policy.”