What are some consulting firms in Canada

Canada can win a lot

Today, the term "sustainable finance" is primarily associated with public and private funds that support the transition to a CO2-to support poor and sustainable economies. This also includes the financing of short-term and long-term measures for climate protection and climate adaptation.

The idea of ​​sustainable finance is relatively new to the Canadian market. Canada is currently taking stock of the awareness of sustainability activities in finance and considering what next steps could be taken.

Over the past year, some financial actors in Canada have explored how climate change should be incorporated into financial decisions and reporting. In spring 2018, the Minister for the Environment and Climate Change and the Minister of Finance of Canada set up a team of experts on sustainable finance.

The working group is tasked with involving the financial sector in sustainable activities, raising awareness and promoting dialogue. In the fall of 2018, the team published an interim report on the state of sustainable finance in Canada.

Series: This is how the green financial transition works

The year 2019 is decisive for future climate policy in Germany and Europe. Finance and its leverage across all sectors play a key role in the fight against climate change and for sustainable business.

 

Germany can learn from pioneering countries for "green finance". In the seven articles in our series, international authors explain their countries' approach to making the financial market greener and address opportunities, hurdles and unanswered questions.

Major challenges are continuously recorded through a nationwide consultation process. The team plans to present its final report this year.

The importance of climate-related risks and their potential financial impact on the Canadian economy is becoming increasingly evident. In the spring of 2017, the Canadian central bank first recognized the systemic extent of the effects of climate change - as well as the urgency to counteract the effects of climate change.

Definition as a core element

Two years later, in spring 2019, the central bank announced that it would join the Network for Greening the Financial System (NGFS). This network has set itself the goal of "better understanding the consequences of climate change for the economy and the financial system".

On the one hand, there is a political strategy for a more sustainable financial system that is more ambitious, better coordinated and more reliable.

On the other hand, the markets themselves can also drive change. Disclose climate-related risks (see also the article from France) is becoming more and more decisive.

Since the Financial Stability Board's Working Group on Climate-Related Disclosure (TCFD) published its recommendations, 33 Canadian institutions - most of them financial institutions - have officially declared their support.

To person

Environmental scientist and administration expert Olena Kholodova is the lead analyst on climate change and sustainability at Canadian consulting firm Mantle314.

Some institutions already apply the TCFD framework for climate-related disclosure in their reporting and are committed to its further development. The Canadian capital market regulator CSA has also made it clear that it considers an expansion of general non-financial disclosures to be necessary.

Canada's largest exchange, the Toronto Stock Exchange, also recently joined the UN's Sustainable Securities Trading Initiative (SSE), whose currently nearly 90 exchanges involved promote and support non-financial disclosures.

At least as important is a consistent, transparent and practicable definition for sustainable or climate-friendly activities. This is actually the core element in making the transition to a CO2-Implement the poor and resilient economy and bring it into line with the goals of the Paris Agreement.

However, every country has a specific economy with different perspectives on possible transformation paths. It is especially important for Canada to understand how the CO2-can convert intensive sectors.

Key elements of a sustainable financial system. (Own translation based on the interim report of the Canadian team of experts on sustainable finance)

For Canada's team of sustainable finance experts, there is a gap in many countries between existing and emerging sustainable development classification systems. Transition activities in emission-intensive industries are often not taken into account.

According to the team of experts, this could affect the acceptance of a sustainable financial system in Canada. That is why it is particularly important for Canada to participate in the development of definitions and standards for sustainable finance.

New financial products

It is estimated that the Canadian financial sector will be able to generate an additional $ 27 billion to $ 110 billion annually through sustainable financial activities by 2025. The team of experts on sustainable finance published a list of measures that have the potential to be economically successful while increasing Canada's climate ambitions.

They include, for example, upgrades to existing buildings in the building sector, urgently needed investments in Canada's infrastructure, a transformation of the energy system and the addition of climate and sustainability aspects to financial investment management.

In addition, new financial products could be introduced that facilitate the transition to a CO2-Support poor and resilient economy. So there is a lot to gain for Canada.

Note to editors: The article was written in cooperation with Germanwatch e.V.