WHAT IS CLIMATE FINANCE?
Climate finance refers to the flow of dollars from governments, financial institutions, businesses, and individuals to support activities and initiatives aimed at addressing climate change. Climate finance is often also referred to as sustainable or green finance. It involves financial investments and mechanisms designed to mitigate greenhouse gas emissions, adapt to the impacts of climate change, and promote sustainable development.
The primary goal of climate finance is to mobilize resources towards activities that contribute to reducing greenhouse gas emissions and enhancing resilience to climate change.
Climate finance is often provided through a combination of public and private funding sources, including international climate funds, development assistance, public grants, loans, and private investments. It is an essential component of global efforts to combat climate change and achieve the objectives of international agreements such as the Paris Agreement.
Despite voluntary commitments to green their business practices, Canadian banks, pension plans, and other financial institutions are still putting money into polluting investments such as oil and gas. By putting our money into polluting investments, Canada is held back from reaching our climate goals.
Canada also lags behind international peers on regulating our financial market to be in line with creating a safe climate .
For Canada to meet its climate goals, dollars from the private sector (investors and businesses) and public sector (government) must shift out of polluting investments and into green solutions.
To do the federal government must:
Establish Regulations: Regulations to align finance with climate action is in the public's and financial institutions’ best interest. Our governments must pass policy to ensure that large financial institutions stop investing in sectors that make climate change more severe. Financial institutions promising to go green on their own will not work - regulations would ensure they actually invest dollars in a way that’s good for our planet.
Align Finance with Climate Science: The financial sector needs guidance to understand how capital and sustainability intersect. Finance can and should learn from climate experts about what’s scientifically needed and in the public’s best interest.
By implementing these measures, we can safely shift investments away from polluting industries and towards sustainable and environmentally friendly solutions.
IT’S TIME TO CLEAN UP CANADA’S FINANCIAL SECTOR
Canadian financial institutions like banks and pension funds are funding the destruction of the environment. They continue to invest in polluting sectors and are too slow to fund climate solutions.
Redirecting the financial sector is key for Canada to succeed on climate action. We can create a safe climate and stable economy by reducing the money flowing into fossil fuels - and technologies like carbon capture that allow for more fossil fuel production - and helping to mobilize finance for true climate solutions like renewable energy and energy efficiency.
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