Gary Schwartz
President | CEO
At a Climate Crossroads:
All of Canada’s Business Leaders must Step Up for a Sustainable Financial Future
Canada’s business leaders face a stubborn paradox: we are deeply concerned about how climate change will impact our nation’s environmental and economic health for future generations. But at the same time, many of us are woefully unprepared to take meaningful action.
For proof look to a recent BMO survey of 700 business leaders across the United States and Canada. It shows that although nearly half of respondents “believe climate change is already affecting their businesses,” just 10 percent of Canadian respondents, “said they feel strongly supported to establish and pursue a realistic climate plan.”
This should come as no surprise to anyone who has been trying to curb climate change in Canada. The truth is that there remains a critical element that is holding this country back from a greener economy and a safe future for all Canadians: the existence of clear industry guidance to help Canadian businesses pursue sustainable finance.
Simply put, there is no environmentally secure future for Canadians that doesn’t involve sustainable finance that is, the deliberate choice of business leaders to factor sustainability into their financial decision-making.
Whether that decision making includes tracking greenhouse gas emissions through a process called “carbon accounting,” or investing in green bonds, or raising capital for climate initiatives, sustainable finance done right is not an empty platitude. It is an urgent necessity in a nation facing a climate crisis– and in a city like Toronto facing increasingly frequent extreme weather events.
There is no combating climate change in Canada without major buy-in from its financial sector. Unfortunately, it doesn’t matter how well -intentioned individuals and activist groups are; protecting the environment demands participation from the sector that directly influences how Canadians spend their money and thus shapes the economy.
However, to participate in greening Canada’s economy, business leaders need to understand how to navigate an increasingly complex regulatory landscape. This means understanding and following strict emerging rules around environment disclosures—and ensuring employees at all levels of business understand and follow these rules too.
In other words, it is up to the leaders in Canada’s finance and business sectors to ensure that sustainable finance is an honest and legitimate project; that it doesn’t suffer the same fate as Environment, Social, and Governance—aka ESG investing.
The recent passage of anti-greenwashing legislation, Bill C-59, and the subsequent retraction of ESG claims by the oil and gas industry, serve as a cautionary tale to the finance sector. The unfortunate fate of ESG initiatives in Canada highlights the consequences of making bold environmental statements without rigorous industry procedures in place.
It’s also important to note that last year, OSFI, Canada’s bank regulator introduced “Guideline B- 15,” official recommendations for how financial instututions should manage climate-related risks.
In light of these two important directives, the business sector now stands at a crossroads: it can integrate these new rules into its operations or risk undermining the credibility of sustainable finance.
My sincere hope is that we choose the former path.
What we need is an all hands-on deck commitment from Canadian finance leaders—at big banks and alternative lenders both—to give their people the tools to do sustainability right: to obsessively verify environmental claims, and to continuously monitor their actions to ensure regulatory compliance. We shouldn’t do this merely to avoid trouble with regulators and government. We should do this because it is the right thing to do for the health of our environment and our economy.
Canadian business leaders must take decisive action to ensure that sustainable finance is not merely a checkbox on a corporate accountability report but the basis on which we conduct business in an era increasingly defined by climate realities. Failing to prepare on this issue now is preparing to fail. It is not hyperbole to say that the future of Canada’s economy—and the well- being of future generations—depends on this commitment.
Read more https://www.thestar.com/business/opinion/at-a-climate-crossroads-all-of-canada-s-business-leaders-must-step-up-for-a/article_79f58d44-6c66-11ef-aa7b-0b056510abd8.html
Please join us at the Sustainable Finance Summit https://lnkd.in/gHfj8DVY this week on Thursday 12th.