What is Sustainable Finance?

The transition to a more sustainable, lower-carbon economy is increasingly viewed as critical to the long-term success of businesses, economies and society. Global financial centres such as Toronto are viewing “sustainable or green finance” as a strategic priority and a critical element for the growth and competitiveness of the financial sector and the broader economy. According to global investment giant BlackRock, in 2012 global sustainable investment was US$13.3 trillion. By 2018, it had grown to US$30.7 trillion. Canada’s Expert Panel on Sustainable Finance defined sustainable finance as follows: “Sustainable finance is viewed as capital flows (as reflected in lending and investment), risk management activities (such as insurance and risk assessment), and financial processes (including disclosure, valuations, and oversight) that assimilate environmental and social factors as a means of promoting sustainable economic growth and the long-term stability of the financial system.”

Corporate directors, executives and management professionals are increasingly expected to understand the need for sustainable finance initiatives and the spectrum of elements that need to be considered in order to assess the risk and opportunities of the transition to more sustainable economies. The pace of growth in sustainable finance research, education, training, regulatory, and policy initiatives has been significant in recent months. The following list provides some of the key resources regarding sustainable finance both in Canada and globally to help individuals and businesses navigate this fast evolving area of economic development.

Key Sustainable Finance Announcements in Canada

November 26, 2020

Canadian ESG Assets Surge to $3.2 Trillion

November 25, 2020

CEOs of eight leading Canadian pension plan investment managers call on companies and investors to help drive sustainable and inclusive economic growth 

November 19, 2020

Government of Canada charts course for clean growth by introducing bill to legislate net-zero emissions by 2050

November 19, 2020

Canada’s Leading Financial Institutions Commit $5 Million to Institute for Sustainable Finance

November 16, 2020

Bank of Canada and OSFI launch pilot project on climate risk scenarios

September 29, 2020

Institute for Sustainable Finance releases critical capital blueprint for Canada’s low-carbon transition

September 15, 2020

Investor Leadership Network Takes Further Action In The Fight Against Climate Change

July 6, 2020

US$1 Trillion Asset Owner Platform Launches Solution For Identifying SDG-Investments

June 16, 2020  

City of Toronto issues inaugural social bond, a first in Canada’s public sector

May 14, 2020

Climate Change Requirements a Feature of new COVID-19 Federal Loan Program

February 2020

Canadian Ideas: Leveraging Our Strengths (Report of the Standing Committee on Finance) 

December 6, 2019

Canadian Members of UNEP FI Sign Statement Of Support To The Final Report Of The Expert Panel On Sustainable Finance

Nov. 19, 2019

New Institute for Sustainable Finance Will Harness Canada's "Best and Brightest" to Advance a Prosperous Transition to a Sustainable Economy

October 18, 2019

Canada Joins International Platform on Sustainable Finance (IPSF)

June 14, 2019

Expert Panel on Sustainable Finance Delivers Final Report

March 27, 2019

Bank of Canada joins Central Banks’ and Supervisors’ Network for Greening the Financial System

Feb 19, 2019

TMX Joins UN Sustainable Stock Exchanges Initiative

September 17th, 2018

Leadership in Sustainable Finance – The Economic Opportunity for the Toronto Financial Centre

July 18, 2018

City of Toronto Issues its First-Ever Green Bond

June 11, 2018

Canada Pension Plan Investment Board to Issue Green Bonds

June 6, 2018

Leading Canadian and G7 investors come together in support of global development initiatives

Nov. 14, 2017

Manulife First Life Insurer to Offer a Green Bond

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Sustainability Ratings/Indexes

According to the Global Initiative for Sustainability Ratings, there were over 125 providers of ESG data by 2016. While the categories and methods of establishing these ratings typically differ from one provider to another, they all strive to measure a company’s performance along the three measures of environment, social and governance (ESG). Some of the most commonly used providers include:

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Climate Data

The need for quality climate data is an important component in developing a strong ecosystem for sustainable finance. Access to reliable and consistent climate data - and the ability to turn that data into relevant financial insight - is essential for sustainable business decisions.

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Sustainable Finance Initiatives by Canadian Banks

Canada’s five largest banks are investing $850 billion in sustainable finance.

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