“Stakeholders for a Cohesive and Sustainable World” was this year’s theme for the World Economic Forum Annual Meeting.
Three thousand stakeholders from around the world gathered in January to develop a “Davos Manifesto 2020” with the goal of reimagining the purpose and scorecards of companies and governments as they confront climate change. The participants explored a wide range of subjects including the role of businesses, and the financial sector in saving the planet.
Sustainable finance is well recognized internationally; the European Union, the United Kingdom and China are already beginning to implement the recommendations of their sustainable finance task force.
As efforts to tackle climate change intensify, so will the pressure on the financial sector to contribute to the solution; the concept of “sustainable finance” is gaining traction. Over the balance of the year, we will be publishing a series of short articles examining issues and developments around sustainable finance and their potential impact on our financial institutions.
The Canadian government’s “Final Report of the Expert Panel on Sustainable Finance” defines sustainable finance as:
Sustainable finance is well recognized internationally; the European Union, the United Kingdom and China are already beginning to implement the recommendations of their sustainable finance task force.
There are also several global initiatives focused on harnessing the power of sustainable finance. Such initiatives include:
Closer to home is the federal government’s “Final Report of the Expert Panel on Sustainable Finance” published last June. The Expert Panel’s mandate was to explore opportunities and challenges facing Canada in achieving sustainable growth, and to develop a set of recommendations to align sustainable finance with Canada’s climate and economic goals.
Organized under three pillars: The Opportunity, Foundations for Market Scale, and Financial Products and Markets for Sustainable Growth, the report’s 15 recommendations “seek to leverage Canada’s financial acumen to facilitate and accelerate market activities, behaviours and structures that—at scale—could put Canada and its key industries at the forefront of the transition to a climate-smart economy”2.
The report’s recommendations range from the establishment of new bodies such as a “Canadian Centre for Climate Information and Analytics” and a “Canadian Sustainable Finance Action Council” to broad objectives such as “promoting a knowledgeable financial support ecosystem” or mapping “Canada’s long-term path to low-emissions, climate smart economy, sector by sector, with an associated capital plan”.
Particularly relevant are recommendations 5 and 8, which propose that Canada define and pursue a Canadian approach to implement the recommendations of the Task Force on Climate-Related Financial Disclosures, and that climate-related risk be embedded into monitoring, regulation and supervision of Canada’s financial system.
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1 “Final Report of the Expert Panel on Sustainable Finance”, Mobilizing Finance for Sustainable Growth, Government of Canada, page 2.
2 Ibid, page 1