toronto – Thousands of sustainable finance experts from around the world gathered in Toronto this week for the PRI in Person conference, providing an important opportunity to convey details about Canada’s approach to sustainable finance to the Canadian federal government.
Canada is in dire need of new financial rules because it is already listed by the United Nations as a “low regulatory jurisdiction” for sustainable finance, while also having some of the highest levels of financing for oil, gas and coal.
In her speech at the conference, Deputy Prime Minister Chrystia Freeland noted that reporting requirements and sustainable finance labeling, known as the Taxonomy, continue to evolve. But we must advance policies that align our financial system with Canada’s climate commitments.
The government’s directive that classification should be scientifically aligned with 1.5 degrees is positive. This means that the sustainable finance classification should not, by definition, include oil or gas. While it is clear that the sustainability label excludes new fossil fuel expansions, the inclusion of existing ‘natural’ methane gas projects in the taxonomy may be problematic one way or another. Studies show that when extraction, cooling and transportation are taken into account, gas pollutes the climate more than coal.
The government must commit to excellent representation for civil society climate experts and indigenous rights holders, as it missed these essential perspectives in the initial process three years ago.
But more progress toward true climate-adjusted finance, including a requirement for a 1.5-degree adjusted climate transition plan, must be a priority. Finance is a missing piece in Canada’s federal climate plan, and new policies are needed to ensure our financial system is aligned with the goals of the Paris Agreement on climate change.
Julie Segal, senior program manager for climate finance at Environment Protection Canada, said:
“These sustainable finance policies must be the foundation for ensuring our financial system is aligned with climate action. Definitions of what constitutes sustainable investing must be rigorous to avoid promoting greenwashing and driven by science, not politics.
While the government’s acknowledgment that new oil or gas projects are not consistent with a safe climate is a positive step, investment in gas projects of any type still risks locking Canada into an anachronistic economy. The government’s announcement today about classification and disclosure requirements for large companies makes sense. However, to build credibility and move the financial system in the right direction, including demanding a credible climate transition, additional requirements are needed to align the financial system with climate action. “Economy-Wide Planning.”
Richard Brooks, Director of Climate Finance at Stand.earth said:
“It is clear from the Department of Defense report. University of Toronto It was revealed yesterday that Canada’s largest financial institutions are not doing enough to accelerate the energy transition. They are doing the exact opposite, with funding equivalent to twice Canada’s total emissions. That’s why we need stronger financial regulation to drive real climate action from big banks and pensions. “Today’s announcement on classification and disclosure is helpful, but our government must go much further to shift financial institutions from exacerbating the climate crisis to advancing real climate solutions.”
Karine Peloffy, Attorney and Sustainable Finance Project Director at Ecojustice and Legal Architect at CAFA said:
“This classification announcement is intended to determine what is considered a ‘sustainable investment’ and what is not. This is an element of a broader effort to align Canada’s financial sector with Canada’s climate commitments and ensure that one side is not actively collaborating with the other. Instead, what we got was another “plan to get the ball rolling” that leaves the door open to considering fracked fossil gas as a climate solution and gets us no closer to reining in the financial sector’s climate heating investment practices. If decision-makers are looking for inspiration to bring much-needed clarity to this sector, I would strongly recommend that they borrow from the proposed common sense principles. Financial law according to climate change (CAFA), “It is currently being referred to the Senate.”
Adam Scott, Managing Director move: ACTIONS FOR PENSIONS WEALTH AND PLANET HEALTH said:
“Aligning Canada’s financial system with climate goals is essential to protecting our financial system and our planet. Any policy to get us there must be fit for purpose. Completing the climate transition is not about short-term marginal emissions reductions. This is about creating a systematic path to fully replacing fossil fuels in our energy system. Policies like Canada’s new climate classification need to be implemented correctly to prevent stranded assets and climate failure.
Keith Stewart, Chief Energy Strategist, Greenpeace Canada said:
“Categorization and disclosure are good, but what we really need is for our elected officials to step up and set clear rules to move big money away from fossil fuels and toward climate solutions. Anything less is an affront to all who are trying to clean up the wreckage of life after unnatural disasters like wildfires, floods and storms caused by burning fossil fuels.”
end
Media Inquiries
Laura Bergamo, Communications Campaigner, Greenpeace Canada
[email protected] ; +1 438 928-5237
Alex Ross, Conservation Communications Manager
[email protected] ; +1 647 546-3230
Cari Siebrits, Communications Strategist, Ecojustice
[email protected] ; +1 647 620-1212
