Toronto | Traditional territories of the Huron-Wendat, the Anishnaabeg, Haudenosaunee, Chippewas and the Mississaugas of the Credit First Nation – Over 85 investment firms, academic organizations, and environmental groups from across Canada and the globe unite to call on the government of Canada for climate-aligned financial policy by endorsing independent Senator Rosa Galvez’s Climate-Aligned Finance Act, Bill S-243. The widespread endorsement shows a consensus that financial reform is key for Canada to succeed on climate action.
“There is an evident regulatory gap when it comes to the Canadian financial sector and its capacity to transition to a low-carbon economy. The widespread support for the Climate-Aligned Finance Act demonstrates the appetite for clear and coherent legislative solutions to help guide the financial sector,” says independent Senator Rosa Galvez. “These organizations are now looking to the Senate to do its legislative duty and send the bill to committee for study.”
Senator Galvez tabled the Climate-Aligned Finance Act on March 24, 2022. If passed, the Act would ensure that all financial institutions align with Canada’s climate commitments, while avoiding carbon lock-in and respecting the rights of Indigenous Peoples. With this legislation, Canada would be a leader in ensuring a stable, 1.5-C aligned, low-carbon financial system. Canada will only deliver strong climate action if the financial sector aligns with our required climate commitments. The signatories call on both Canada’s Senators and House members to implement the provisions of Bill S-243 into law.
“We need policies that bring the financial sector in line to keep global warming below 1.5-C. While Canada already regulates the financial sector, and has implemented policies to advance climate action, sustainable finance – where climate and finance come together – is a regulatory void. This oversight is a liability for Canada’s climate action and financial stability”, says Julie Segal, Senior Manager Climate Finance at Environmental Defence. “Canada’s financial sector continues to make investments that worsen the climate crisis. Senator Galvez’s Bill S-243 gives policymakers a roadmap and a lifeline to fix climate finance.”
“For years, governments have been talking about tackling climate change and its mammoth implications for the planet, society, and our economic system. Yet that talk has hardly been accompanied by ambitious actions. Our financial system continues to stack on carbon risks without properly accounting for them. The political climate has arguably never been more favorable for climate action, which begs the question: if not now then when? Senator Galvez’s CAFA is a gold standard legislative bill that would help steer Canada’s financial system towards better management of climate change risks, create incentives for funneling capital towards climate-related opportunities, and position Canada’s economy as a global leader in a low-carbon world” says Amr Addas, Adjunct Professor and Strategic Advisor for Sustainability at Concordia University.
“Directors of financial institutions already have a duty to manage climate-related financial risks and opportunities. The Bill offers a clear set of accountability mechanisms to assist them in meeting their duties and supporting a path to net-zero emissions.” Said Sonia li Trottier, Director at Canada Climate Law Initiative.
Mitigating climate change requires collaboration from top to bottom of all sectors of Canada’s economy. But the financial sector is behind the required pace of climate action. Although the Canadian government has committed to reducing emissions by 40-45 per cent by 2030, many of Canada’s banks, pension funds, and insurers continue to worsen the effects of climate change. Voluntary initiatives are not meeting the required level of ambition. We need federal policy to spur action.
The full endorsement letter and list of signatories can be found here.
About ENVIRONMENTAL DEFENCE (www.environmentaldefence.ca): Environmental Defence is a leading Canadian advocacy organization that works with government, industry and individuals to defend clean water, a safe climate and healthy communities.
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