Sustainable Finance Action Council
In May 2021, the Government of Canada launched the Sustainable Finance Action Council (SFAC) to help lead the Canadian financial sector towards integrating sustainable finance into standard industry practice.
The council’s early emphasis will be on enhancing climate-related financial disclosures in Canada’s private and public sector, aligned with the recommendations of the Task Force on Climate-Related Financial Disclosures. The council will also prioritize gender and diversity reporting.
The SFAC will serve as a centre of expertise, partnership, and dialogue on sustainable finance issues in Canada and internationally. It will also help champion the implementation of sustainable finance best practices across Canada's financial sector and the broader Canadian economy, and support the growth of a well-functioning sustainable finance market in Canada. This will help accelerate movement 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.
The SFAC’s principal mandate is to make recommendations on critical market infrastructure needed to attract and scale sustainable finance in Canada, including: enhanced assessment and disclosure of climate risks and opportunities; better access to climate data and analytics; and common standards for sustainable and low-carbon investments.
It will work in close collaboration with Canada’s independent Net-Zero Advisory Body to ensure climate considerations are taken into financial decision-making, and will be a key tool to accelerate progress towards Canada’s climate objectives.
Terms of Reference
Terms of Reference for the Sustainable Finance Action Council
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.
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.
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.
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.
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.
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.
Kathy Bardswick has spent nearly four decades in the financial services industry, retiring in 2016 from her position as President and Chief Executive Officer of The Co-operators Group.
Under Ms. Bardswick’s leadership, The Co-operators was the first Canadian insurance company to become a signatory of the UN Principles of Sustainable Insurance. She was also a member of the UN Inquiry into a Sustainable Financial System. She has also accepted numerous recognitions on behalf of The Co-operators for its good sustainability, environmental, social, and governance practices. More recently, Ms. Bardswick served as President of the Canadian Institute for Climate Choices.
Ms. Bardswick holds a Bachelor of Science (Math) from the University of Manitoba and an MBA from McMaster University. She was also awarded an Honorary Doctor of Laws from the University of Guelph.
Senior representatives from the organizations below are participating in the Action Council.
- Alberta Investment Management Corporation (AIMCo)
- ATB Financial
- Aviva Canada
- BMO Financial Group
- British Columbia Investment Management Corporation
- Caisse de dépôt et placement du Québec
- Canada Life
- Canada Pension Plan Investment Board
- Canadian Imperial Bank of Commerce
- CWB Financial Group
- Desjardins Group
- Healthcare of Ontario Pension Plan
- Intact Financial Corporation
- National Bank Financial
- Ontario Municipal Employees Retirement System (OMERS)
- Ontario Teachers' Pension Plan
- PSP Investments
- Royal Bank of Canada
- Sun Life
- TD Bank Group
- The Co-operators Group
- University Pension Plan
Technical expert groups
Three technical expert groups support the work of the SFAC and are comprised of SFAC organizations as core members, with expertise from industry, academia, civil society, and government incorporated to support progress on workplans.
The objectives of the three groups are:
- Disclosure (Lead: Barbara Hooper, TD Bank): Support efforts to introduce mandatory Task Force on Climate-Related Financial Disclosures (TCFD)-aligned climate disclosures in Canada, with the objective of achieving broad coverage across the economy.
- Taxonomy (Lead: Barb Zvan, UPP Investments): Outline needs amongst market participants to define green and transition investments and activities within the context of Canada’s capital markets.
- Data (Lead: Louis Marcotte, Intact Financial): Validate and advise on climate data needs and capacity within the financial sector.
SFAC Plenary Meeting Summaries
- Fourth meeting (April 26, 2022)
- Third meeting (January 12, 2022)
- Second meeting (October 28, 2021)
- First meeting (June 11, 2021)
Presentations to the SFAC
Current as of July 31, 2022
The SFAC invites technical experts to present to the SFAC and technical expert groups on sustainable finance issues and initiatives. Below is a list of organizations that have presented:
|June 2021||Deputy Prime Minister and Minister of Finance (plenary)|
|June 2021||Minister of Environment and Climate Change (plenary)|
|October 2021||Canada's Climate Ambassador (plenary)|
|October 2021||Office of the Superintendent of Financial Institutions (plenary)|
|October 2021||James Meadowcroft|
|November 2021||Canadian Climate Institute|
|November 2021||Green Finance Institute|
|January 2022||Principles for Responsible Investing|
|January 2022||Office of the Superintendent of Financial Institutions and Bank of Canada Presentation on Scenario Analysis Pilot Project (plenary)|
|January 2022||Net Zero Advisory Body Co-Chairs (plenary)|
|June 2022||Environment and Climate Change Canada|
|June 2022||Export Development Canada|
|September 2021||Canadian Standards Association Group||Taxonomy TEG|
|October 2021||Canadian Standards Association Group||Taxonomy TEG|
|October 2021||Canada Mortgage and Housing Corporation||Data TEG|
|October 2021||Insurance Bureau of Canada||Data TEG|
|October 2021||Intact Centre on Climate Adaptation||Data TEG|
|October 2021||Canadian Securities Administrators||Disclosure TEG|
|November 2021||CPA Canada||Disclosure TEG|
|December 2021||Climate Bonds Initiative||Taxonomy TEG|
|December 2021||Canadian Climate Law Initiative||Disclosure TEG|
|December 2021||Independent Review Committee on Standard Setting in Canada||Disclosure TEG|
|January 2022||Export Development Canada||Disclosure TEG|
|February 2022||TMX Group||Disclosure TEG|
|February 2022||Global Risk Institute||Disclosure TEG|
|February 2022||Climate Bonds Initiative||Taxonomy TEG|
|March 2022||Climate Bonds Initiative||Taxonomy TEG|
|April 2022||Climate Bonds Initiative||Taxonomy TEG|
|April 2022||Canadian Climate Institute||Taxonomy TEG|
|April 2022||Sullivan & Cromwell LLP||Disclosure TEG|
|April 2022||Canadian Securities Administrators||Disclosure TEG|
|April 2022||Bank of Canada||Data TEG|
|May 2022||Canadian Climate Institute||Taxonomy TEG|
|May 2022||CPA Canada||Disclosure TEG|
|May 2022||Institute for Sustainable Finance||Data TEG|
|June 2022||Canadian Climate Institute||Taxonomy TEG|
|June 2022||Canadian Securities Administrators||Disclosure TEG|
|July 2022||Office of the Superintendent of Financial Institutions||Disclosure TEG|
|July 2022||Office of the Superintendent of Financial Institutions||Data TEG|
|July 2022||Network for Greening the Financial System||Data TEG|
|July 2022||Glasgow Financial Alliance for Net Zero||Taxonomy TEG|
SFAC Presentations and Meetings
Current as of July 31, 2022
The SFAC Chair or technical expert group Leads are invited to events and speaking engagements to discuss the SFAC and its work. The SFAC has presented at the following venues and events:
|June 2021||Institute of Sustainable Finance – National Infrastructure Assessment Process|
|September 2021||International Economic Forum of the Americas|
|April 2022||International Financial Reporting Standards/International Sustainability Standards Board|
|April 2022||Office of the Superintendent of Financial Institutions Leadership Matters Series|
|May 2022||High level Roundtable on Sustainable Finance|
|June 2022||Sustainable Finance Action Council and Climate Action Network-Réseau action climat roundtable with Environmental NGOs|
|June 2022||Responsible Investment Association Canada – Conference 2022|
|June 2022||Net Zero Advisory Body Meeting|
|June 2022||Joint Forum of Financial Market Regulators Annual Meeting|
SFAC Submissions to External Consultation Processes
Current as of July 31, 2022
As a centre of expertise, partnership and dialogue on sustainable finance issues in Canada, the SFAC provides formal submissions to consultation processes related to sustainable finance issues. Below is a list of formal submissions to date:
- Kathy Bardswick (Sustainable Finance Action Council) Comment letter to - Comment Letters for 51-107 - Consultation Climate-related Disclosure Update and CSA Notice and Request for Comment Proposed National Instrument 51-107 Disclosure of Climate-related Matters.
- Kathy Bardswick (Sustainable Finance Action Council) Response to International Sustainability Standards Board request for Comment on Exposure Drafts for IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures.
SFAC Deliverables and Reports to the Government of Canada
Current as of March 2, 2023
To support the SFAC’s work and mandate, the council has commissioned or conducted the following research reports. It is important to note that SFAC deliverables and reports to the Government of Canada represent the views of the SFAC and, as such, do not constitute the official position of the Government of Canada.
Individuals and organizations with expertise in sustainable finance or related subject matter, domestic or international, seeking to engage with the SFAC, can contact the SFAC Secretariat at firstname.lastname@example.org.
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