September 27, 2019

By Olaf Weber, Truzaar Dordi and Vasundhara Saravade.

Canada’s expert panel on sustainable finance attests that climate change is a significant risk for financial sector stability and that Canada’s financial sector could benefit from more effective and consistent regulation on climate-related financial issues. The results of the study suggest that practitioners from the Canadian financial industry do perceive all 13 regulatory measures as feasible and favourable. Public guarantee funds are perceived to be the most favourable, followed by enhanced fiduciary duty requirements in asset management, green bond issuance, standardized reporting and enabling incentive mechanisms. There is some evidence that practitioners are less in favour of top-down regulatory policies or working with public institutions through shared climate funds or partnerships. This suggests that financiers prefer to maintain autonomy in finding and utilizing business opportunities, yet value regulation that reduces their own risk.

Read the paper here.

This CIGI working paper was informed by research funded by the Smart Prosperity Institute and the Economics and Environmental Policy Research Network (EEPRN), as part of a project lead by Dr. Olaf Weber (University of Waterloo) on Strategies and Policies for Integrating the Canadian Financial Sector into a Low Carbon Transition.  It is reposted here as an output of that project. The full working paper is available here.