Sustainable Finance Action Council - Fourth Plenary Meeting

April 26, 2022

Meeting Readout

The Sustainable Finance Action Council (SFAC) held its fourth meeting on April 26, 2022. Key aspects of the meeting included an update from the Government of Canada on measures recently announced in Budget 2022 related to building the net-zero economy, such as net-zero capital allocation strategies and the Canada Growth Fund. Canada's climate priorities and policies, including the Net-Zero Emissions Accountability Act and the 2030 Emissions Reduction Plan were also discussed. These opening remarks provided framing for subsequent discussions on the overarching theme of net-zero capital allocation strategies.

The Office of the Superintendent of Financial Institutions (OSFI) provided an update on its planned guidance on climate risk management for federally regulated financial institutions. The guideline will build upon the 2021 public consultation paper "Navigating Uncertainty in Climate Change", the climate scenario analysis pilot with the Bank of Canada, and will reflect international regulatory developments.

SFAC organizations took part in a panel discussion to share their experience and learnings in setting corporate net-zero commitments, developing transition plans, and setting emissions reduction targets. While organizations are dedicated to meeting their net-zero commitments, it was noted that a high level of effort is involved in executing on their commitments, and internal engagement across the organization was critical. Others highlighted the importance of working with client companies to help better understand their financed emissions and to support decarbonization efforts through analytical tools and frameworks and early engagement.

The SFAC Chair and leads of the Technical Expert Groups (TEGs) provided updates on the work underway in the TEGs, including supporting the effort to make mandatory climate-related financial disclosure comprehensive and cost-effective, defining a value proposition for defining green and transition investments and activities within the context of Canada's capital markets, and identifying climate-related data gaps in financial decision-making. The SFAC discussed the need to continually stay abreast of the rapidly evolving international context, particularly on climate-related financial disclosure. In addition to the proposed disclosure instrument from the Canadian Securities Administrators on climate-related and ESG disclosure, SFAC members also reflected on more recent developments, including the launch of consultation processes by the International Sustainability Standards Board (ISSB) on proposed global sustainability and climate-related disclosure standards and the Securities and Exchange Commission on proposed rules to enhance and standardize climate-related disclosures for investors.Footnote 1

With respect to net-zero capital allocation strategies, the discussion noted the importance of establishing policy goals around net-zero, with credible frameworks to spur investment in Canada. The SFAC Chair noted that an approach would need to be developed to support Canada's net-zero capital allocation strategy, and invited SFAC representatives to provide their additional perspectives following the meeting.

Participating organizations:

Also in attendance was the Official Sector Coordinating Group, made up of:

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