Canada’s Expert Panel on Sustainable Finance releases recommendations to government

Investors welcome the long-awaited report

Canada’s Expert Panel on Sustainable Finance has published its recommendations to federal government, outlining 15 recommendations to help the country’s policymakers and supervisors support the development of climate finance.
The group comprises just four members, but includes two major public pension funds – Caisse de dépôt et placement du Québec and the Ontario Teachers’ Pension Plan. It was tasked with consulting with the market last April and its final recommendations have been praised by institutional investors and responsible investment bodies in the country.

“The exclusion of social considerations and the just transition may undermine its effectiveness in the Canadian context” – SHARE’s Kevin Thomas

For details of the recommendations, see our analysis. Key proposals include the creation of a number of bodies such as a national data hub for climate information, an advisory council to support the government with technical implementation, and an oil & gas cluster to help finance and develop climate-aligned solutions for the industry – which makes up a significant part of Canada’s economy.“The Panel has done a tremendous job of outlining a series of practical steps to not only embed climate change considerations in financial decisions but also for government to develop a serious plan for a low-carbon transition, leveraging the power of the financial sector,” said Kevin Thomas, Executive Director of the Shareholder Association for Research & Education in Canada, praising the recommendations for ongoing groups to monitor progress and support developments over the longer term.
However, he added, “the Panel’s mandate regarding sustainable finance was still too narrow, and the exclusion of social considerations and the just transition may undermine its effectiveness in the Canadian context”.
Thomas also warned against “vague requests for better governance” and active ownership, saying that “the Canadian financial community has got to be more aggressive in asking investee companies for targets, and using their votes to demand meaningful and measurable change and accountability for outcomes”.
Dustyn Lanz, CEO of Canada’s Responsible Investment Association, which represents more than C$12trn in assets, hailed the report as “an important step forward”. RIA members including Addenda Capital, Desjardins Group, RBC Global Asset Management and NEI Investments said they support the recommendations.