TFI Sustainable Finance Strategy

The global demand for cleaner economic growth is providing an opportunity for financial centres to play a leading role in unlocking the potential of sustainable growth. Global green bond issuance has more than tripled in the last 3 years to $163 billion in 2017. Recent data published by Corporate Knights estimates that the annual value of the sustainable finance opportunity for Canada’s financial sector is at least $27 billion and could be as high as $110 billion annually by 2025. TFI is working with the financial sector and our international partners to establish a strategy for the Toronto Financial Centre’s role in developing and growing sustainable finance in Canada in order to capitalize on the economic opportunity that can be created by the transition to a low carbon economy.

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Defining Green & Transition Finance in Canada

Canada's Expert Panel on Sustainable Finance noted that "several international initiatives are in the process of advancing standardized taxonomies for green and related investments, and early precedents have emerged. However, initial criteria seem to exclude opportunities for GHG emissions reductions brought by innovation within heavy resource and industrial sectors. This restrictive scope could exclude some of Canada’s core economic sectors from certain investment mandates, benchmarks, funds, and accreditation standards – even if companies in these sectors are pursuing projects and strategies that lead to better environmental improvements than approved pure green projects."

To address this challenge the CSA Group, working with financial stakeholders such as TFI, are currently leading the development of a Canadian definition of Green and Transition Finance.

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International Network of Financial Centres for Sustainability

TFI is a member of the International Network of Financial Centres for Sustainability (FC4S) which is a partnership between global financial centres and the United Nations Environment Programme. The FC4S objective is to: 1) exchange experience and take common action on shared priorities to accelerate expansion of green and sustainable finance; 2) strengthen international connectivity and create framework for common approaches.

The network is currently focused on initiatives to establish clarity and convergence on sustainable finance taxonomy, increase green finance activity and skills base in global financial centres, and foster innovation in sustainable finance markets.

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Sustainable Finance in Canada Today

Canada’s federal government has set out ambitious targets and plans for reducing carbon emissions under its commitment to the Paris agreement. In April 2018, to support that commitment, the Government of Canada announced the creation of an Expert Panel on Sustainable Finance which noted that “accelerating action to support sustainable finance is an important part of Canada’s G7 presidency.” The interim and final reports of the Expert Panel were released in October 2018 and June 2019.

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