Canada finally has an all-star team ready to tackle the biggest gap in Canada’s climate plans: regulations that align Canada’s financial system with climate action.
Canadian banks and pension funds rank in the bottom third globally on financing clean energy, yet are among the world’s largest investors in fossil fuels. Investments in polluting activities contribute to climate disasters like wildfires, and hold Canada back from securing opportunities and good jobs in the green economy. Slow movement to address climate change puts over $100 billion of Canadians’ investments at risk of nose diving in value, as high-polluting assets become obsolete and climate risk worsens.
Canada’s financial system is under-regulated on climate change. Policy should ensure financial institutions create credible climate plans and disclose the environmental risks caused by their investments.
Last month, 16 Members of Parliament supported a government motion, Motion 84, and called on the government to “use all legislative and regulatory tools at its disposal to align Canada’s financial system with the Paris Agreement” on climate change, where countries agreed to deliver best efforts to limit global warming to 1.5-degrees.
This call to action recognizes that financial institutions play a deciding role in whether we successfully address climate change. Although regulators now require financial institutions to count and report on their greenhouse gas emissions, these rules don’t necessarily help reduce emissions. In a sinking boat, you have to plug the leaking holes, not just count them. Similarly, financial institutions must be required to reduce their emissions, not just disclose them.
Every policymaker should help advance climate-aligned finance. It fights for the best interest of Canadians and our climate. Clear policy solutions have already been laid out by climate experts like Environmental Defence and partners, as well as by policy makers through the proposed Climate-Aligned Finance Act.
We have the opportunity to create a safe climate and stable economy. Canada must set rules to ensure investments go into climate solutions that keep us safe and healthy. Climate-related financial regulation is essential for a safe climate and a functioning, more affordable economy. Motion 84 is a significant step in the right direction and we invite more Canadians and policymakers to support it.
Sign our letter today and tell your local Member of Parliament (MP) you want them to join the growing team of policymakers moving to require all financial institutions to develop credible plans for climate action.