SFAC chair slams slow pace of government progress on sustainable finance in Canada

The Canadian government has failed to make fast enough progress on sustainable finance, according to Kathy Bardswick, chair of the Sustainable Finance Action Council (SFAC).

Launched in 2021, SFAC was set up by the government to help Canada’s financial sector integrate sustainable finance into standard industry practice. It is made up of representatives from 25 Canadian financial institutions, including banks, pension funds and insurers. It has four technical expert groups, focused on taxonomy, disclosures, data and net-zero capital allocation.

Bardswick, who was CEO and president of the Co-operator’s Group for more than 15 years, was speaking at RI Canada in Toronto last week.

In a keynote interview, she said SFAC had still not received a formal response from the Canadian government to recommendations from autumn 2022 on what a green and transition finance taxonomy could look like, as well as thoughts on the path forward on climate-related disclosures submitted in January.

“I’m not going to mince words,” she said. “I’m very concerned that it’s taking us too long. We were hoping we would see progress more quickly. And it’s not because the financial system has not been clear that it wants to see this progress.”

On a more positive note, Bardwick highlighted the taxonomy group’s discussions with other jurisdictions, including the EU, the UK and Australia. 

“We’re all trying to figure this out,” she said. “We don’t want to have to duplicate work – none of us has the resources nor the time. On the other hand, we also recognise that it has to be fit for purpose within our countries.

“Yes, interoperability, but we also need to recognise that there are considerations within countries that need to be taken into account, which is why Canada needs to be at the table.”

SFAC 2.0?

SFAC’s mandate comes to an end in March. According to Bardswick, 23 of the 25 organisations involved would like it to continue in some form as they do not want to lose the opportunity of having a venue to come together.

Bardswick said she had tried to be as inclusive as possible over the last two and a half years and bring in other institutions – both financial institutions that were not formally represented in SFAC and other stakeholders with relevant expertise.

She suggested that this approach could be adopted for a “SFAC 2.0”. “It should perhaps be more formally constituted, with the capacity to be able to be more inclusive and ensure that the work was being influenced from the get-go with these additional perspectives and stakeholder groups.”

For the two institutions that were opposed to reconstituting SFAC, Bardswick said the motivation was likely a sense that the initiative “was not ultimately having the impact that they hoped we would, because we haven’t seen progress”.

In her concluding remarks, Bardswick called on financial institutions to become more vocal about what they need and ensure that their voice is heard through trade associations and in front of policy decision-makers, both provincial and federal.

“Make it clear that you need to be able to compete on a global scale with this global reality, that this thing is moving, and it will move without us – and you and your clients need the support to be able to compete effectively,” she said.