Sustainable Finance Action Council

Mandate

Reporting to the Ministers of Finance and Environment and Climate Change Canada, the Sustainable Finance Action Council ("Action Council") will:

• Support the growth of a well-functioning sustainable finance market in Canada to strengthen the mobilization of private capital in support of the Government of Canada's climate goals, in particular:
  • To support the achievement of Canada's enhanced 2030 target; 
  • To transition to a net-zero emissions economy by 2050; and,
  • To ensure climate resilience and adaptation throughout Canada.
• Provide financial sector input on the development of foundational market infrastructure including enhanced climate disclosure, defining green and transition investment, and climate data and analytics.
• Engage with the official sector through the Official Sector Coordinating Group to discuss barriers and opportunities to mobilizing private capital to support climate transition and adaptation in Canada's economy, as well as with external experts and civil society. 
• Serve as a centre of expertise, partnership, and dialogue on sustainable finance issues in Canada and internationally, and to help champion the implementation of sustainable finance best practices both across Canada's financial sector and the broader Canadian economy.

The Action Council will make climate-related financial disclosure its first priority and will provide advice on the most effective ways to implement the Government's commitment towards applying mandatory climate disclosures across a broad spectrum of the Canadian economy. This advice is to be prepared by the end of 2022 through a joint letter to the Minister of Finance and Minister of Environment and Climate Change Canada.

Recognizing that private sector investment will play a vital role in the transition to a low-carbon global economy, the Action Council will develop and report on strategies for aligning private sector capital with the transition to net-zero, with support from the Canadian Climate Institute and in collaboration with the Net Zero Advisory Body. This net-zero capital allocation strategy will be used to inform opportunities to achieve Canada's 2030 climate target of reducing emissions by 40 to 45% below 2005 levels by 2030. Preliminary advice on these findings is to be shared by March 2023 through a joint letter to the Minister of Finance and Minister of Environment and Climate Change Canada.

Furthermore, recognizing the Government's commitment to supporting the start-up of the International Sustainability Standards Board's Montreal office and positioning Canada as a leader in sustainability reporting, the Action Council will help coordinate Canadian financial sector input on the ISSB's global baseline standards and their adoption in Canada. The Action Council will share its advice with the Minister of Finance and the Minister of Environment and Climate Change Canada by winter of 2023.

The Action Council will also focus on gender and diversity reporting as an early topic. As circumstances merit, the Action Council will, if requested by the Ministers of Finance and Environment and Climate Change Canada and by mutual consent, work on additional sustainable finance issues, including broader environmental, social, and governance considerations, such as gender and diversity, and nature-related financial disclosures.

The Action Council is expected to work in close collaboration with other federal government advisory groups to ensure coordination and consultation on advice brought forth to the Government of Canada. As an immediate priority, the Chair of the Action Council will consult with the Co-chairs of the Net-Zero Advisory Body on the priorities, work plans, and perspectives of the two bodies.

Reporting

The Action Council will submit a letter to the Minister of Finance and Minister of Environment and Climate Change Canada annually on its activities and expected areas of focus in the next year, and more frequently on discrete issues as necessary, to address the specific objectives addressed above.  The letter will share findings to advance the mandate of the Council and proposed solutions participants agree to advance.

The Action Council will also report by the end of 2022 on any remaining gaps or obstacles for moving towards mandatory climate disclosures.

The Chair of the Action Council will brief the Minister of Finance and Minister of Environment and Climate Change Canada on a semi-annual basis, or as needed.

The Chair of the Action Council may be requested to join the Deputy Minister(s) of Finance and/or Environment and Climate Change Canada in briefing provincial and territorial governments and securities regulators on the progress of the Action Council, as needed.

Duration

The Action Council's mandate will extend to March 31, 2024.  The duration and content of the mandate may be modified by mutual agreement between the Government of Canada and the Action Council, as represented by its Chair.

Participants

The Action Council will have:

• One Chair; and
• Broad representation from Canada's deposit-taking institutions, insurance companies, and pensions.

The financial sector composition of the Action Council will be based on function, size, capital position, regional and national representation, and sustainable finance commitment and expertise. 

The Action Council will have an Official Sector Coordinating Group that will observe and advise the Action Council.  It will include participants of the policy and regulatory community connected to sustainable finance, including Finance Canada, Environment and Climate Change Canada, the Bank of Canada, the Office of the Superintendent of Financial Institutions, provincial securities commissions, and provincial prudential supervisors.

In consultation with the Chair, each major financial sector group will select a lead(s) to serve on the Action Council's steering committee.  The Chair of the Action Council will be the Chair of the Steering Committee. 

Observers and Experts

The Action Council may engage individuals and organizations with expertise in sustainable finance or related subject matter, domestic or international, to participate in full or sub-group meetings on an ad hoc basis.

Plenary Meetings and Sub-Groups

Initially, the Action Council is to meet quarterly, with changes in cadence based on consensus of Action Council participants.

The Action Council will establish sub-groups, as needed, to assess issues in support of the mandate.  These sub-groups may operate at different cadences.

Secretariat

Finance Canada and Environment and Climate Change Canada will staff a Secretariat, which will support the Chair and will provide logistical, administrative, and analytical support (e.g. backgrounders, summaries, and communiqués) to the Action Council in the fulfillment of the mandate. Finance Canada and Environment and Climate Change Canada will provide additional support and information to the Action Council as needed, and will liaise with other departments with expertise related to the Action Council's work.

Reasonable Expenses

Action Council participants will not be remunerated for their participation. Only the Chair will be reimbursed for reasonable Action Council-related travel and accommodation expenses, subject to Treasury Board Guidelines.

Protection of Information

The Action Council participants will treat as confidential any non-public information, records, or documents, which they may obtain as a result of their work on the Action Council during or after the duration of the Action Council.

Conflict of Interest

Action Council organizations and their representatives are expected to contribute to the activities of the Action Council in a manner that reflects the broad national interest, and not solely the interest of the institution they represent. In providing their views and advice, they are to uphold the highest ethical standards so that public confidence and trust in the integrity, objectivity and impartiality of government are conserved.

Representatives of Action Council organizations will also be required to meet any applicable requirements of the Lobbying Act and the Lobbyists' Code of Conduct that may arise as a result of their participation on the Action Council. Any representatives who are public office holders as defined in the Conflict of Interest Act are subject to and required to meet all applicable requirements of that Act in connection with their participation on in the Action Council.