Expert panel on sustainable finance

The right finance and investment structures can help fight climate change and build the low carbon economy. We’ve set up an expert panel to engage with business experts about investments that benefit the environment.

Final report

Final Report of the Expert Panel on Sustainable Finance - Mobilizing Finance for Sustainable Growth

Access the final report in PDF format

Executive Summary

Canada has a strong, diversified and resource-rich economy; a world-leading financial sector; and excellent capacity for innovation. By harnessing these advantages, Canada can be among the leaders in the global transition to a low-emissions future as a trusted source of climate-smart solutions, expertise and investment. Realizing this ambition will require a committed alliance between business, government and civil society, and determined investment. This Final Report is about mobilizing financial services to deliver the investment, ingenuity and influence needed to realize Canada’s leadership opportunity and secure a sustainable economic future.

The effects of climate change are upon us. Shifting weather patterns are amplifying the natural risks we already face – floods, storms, heat and drought – leading to more frequent and extreme loss events. Preparing for and adapting to the current and future impacts of climate change is a critical aspect in managing risk to our communities, businesses and ecosystems. As the effects of climate change are becoming more evident around the world, we are also seeing shifts in consumer preferences, innovation, economic activity, competitive advantage and wealth creation. Consumers are increasingly looking for services and products with a smaller environmental footprint. Climate-smart innovations are no longer marginal alternatives - they are becoming a massive global market opportunity yielding quality jobs. With these shifts, sound environmental stewardship is increasingly intersecting with market access and becoming a critical source of sustained competitive advantage.

While the Government has put forward a plan to underpin Canada’s transition - the Pan Canadian Framework for Clean Growth and Climate Change (PCF) - and begun implementing key policies, the role of financial markets in driving this change has yet to be fully leveraged. Finance is not going to solve climate change, but it has a critical role to play in supporting the real economy through the transition. The emerging field of ‘sustainable finance’ is focused squarely on channeling financial sector expertise, ingenuity and influence towards the challenges and opportunities posed by climate change.

The potential for sustainable finance to accelerate transition and help households and businesses manage new climate risks is already well recognized in a number of Canada’s international peers, including the European Union, the United Kingdom and China. Major financial centres in these countries are beginning to implement the recommendations of their sustainable finance task forces, with ambitions to become global hubs in this market. Canada has the means and the opportunity to stand among these global leaders as a decision-maker rather than a decision-taker in the global market for sustainable products, markets and growth.

Recognizing the opportunity, Canada’s Minister of Environment and Climate Change and Minister of Finance jointly appointed the Expert Panel on Sustainable Finance in April 2018 to explore opportunities and challenges facing Canada in this field, and to present the Government with a set of recommendations to scale and align sustainable finance in Canada with our country’s climate and economic goals.

Following extensive consultations, the Expert Panel delivered an Interim Report in October 2018 that laid out the state of play in Canada, identifying factors critical to developing and scaling priority financial markets and products.

This Final Report – Mobilizing Finance for Sustainable Growth – presents a package of practical, concrete recommendations focused on spurring the essential market activities, behaviours and structures needed to bring sustainable finance into the mainstream. If Canada is to meet its long-term objectives, sustainable finance must become, simply, finance. In other words, climate change opportunity and risk management need to become business-as-usual in financial services, and embedded in everyday business decisions, products and services.

The Panel’s 15 recommendations for achieving this goal are grouped into three mutually reinforcing pillars:

Pillar I: The Opportunity

Canada should put forward a renewed long-term vision for its transition, with focused policies to help businesses and investors of all sizes effectively respond to the economic opportunity. Mapping Canada’s climate goals into clear industry competitiveness visions and capital plans would spell out the size and horizon of the investment opportunity. Meanwhile, an incentive for Canadians to make climate-smart investments would drive demand for financial products and services that promote sustainable outcomes.

  • Recommendation 1: Map Canada’s long-term path to a low-emissions, climate-smart economy, sector by sector, with an associated capital plan.
  • Recommendation 2: Provide Canadians the opportunity and incentive to connect their savings to climate objectives.
  • ·Recommendation 3: Establish a standing Canadian Sustainable Finance Action Council (SFAC), with a cross-departmental secretariat, to advise and assist the federal government in implementing the Panel’s recommendations.

Pillar II: Foundations for Market Scale

Canada’s public and private sectors should invest in the essential building blocks needed to scale the Canadian market for sustainable finance to mainstream status. These foundations include authoritative and decision-useful climate information; effective climate-related financial disclosures from businesses and investors; legal clarity around the obligations of investment fiduciaries; financial regulation that addresses climate risk; and a supportive and climate-informed ecosystem of professional services providers.

  • Recommendation 4: Establish the Canadian Centre for Climate Information and Analytics (C3IA) as an authoritative source of climate information and decision analysis.
  • Recommendation 5: Define and pursue a Canadian approach to implementing the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD).
  • Recommendation 6: Clarify the scope of fiduciary duty in the context of climate change.
  • Recommendation 7: Promote a knowledgeable financial support ecosystem.
  • Recommendation 8: Embed climate-related risk into monitoring, regulation and supervision of Canada’s financial system.

Pillar III: Financial Products and Markets for Sustainable Growth

Recognizing Canada’s unique economic make-up, the Panel has identified several opportunities to develop and scale up market structures and financial products that would have particular impact in facilitating Canada’s transition and adaptation. These opportunities align closely with Canada’s PCF and support the financing needs of critical segments of the Canadian economy such as clean technology, oil and natural gas, infrastructure, buildings, and electricity generation and transmission.

  • Recommendation 9: Expand Canada’s green fixed income market, and set a global standard for transition-oriented financing.
  • Recommendation 10: Promote sustainable investment as ‘business as usual’ within Canada’s asset management community.
  • Recommendation 11: Define Canada’s clean technology market advantage and financing strategy.
  • Recommendation 12: Support Canada’s oil and natural gas industry in building a low-emissions, globally competitive future.
  • Recommendation 13: Accelerate the development of a vibrant private building retrofit market.
  • Recommendation 14: Align Canada’s infrastructure strategy with its long-term sustainable growth objectives and leverage private capital in its delivery.
  • Recommendation 15: Engage institutional investors in the financing of Canada’s electricity grid of the future.

We encourage governments at all levels, regulators, businesses and investors to consider these recommendations in charting Canada’s course toward a sustainable, prosperous, and resilient future.

Interim report

The Expert Panel has released an Interim Report that provides an overview of sustainable finance in Canada and highlights feedback received to date from a wide range of stakeholders. The Interim Report is being used to explore key issues during consultations across Canada. It will lead to a Final Report in spring 2019.

Terms of reference


Financial markets play a role in Canada’s transition to a low carbon economy by providing the investments and financing needed to develop and deploy low-carbon technologies, business processes, and infrastructure. Sustainable finance initiatives could help shift investors’ capital allocation decisions towards assets that are less carbon-intensive and more climate-resilient.

At the request of the G20, the chair of the Financial Stability Board, Mark Carney, commissioned an industry-led Task Force on Climate-related Financial Disclosures (TCFD) to develop recommendations for how firms can put forward more consistent and comparable disclosures of climate-related financial risks and opportunities. The final report and recommendations from this Task Force were released in June 2017.

The Canadian Securities Administrators (CSA) are assessing the TCFD’s recommendations as part of a broader review of the state of climate-related risk disclosures in Canada. The CSA recently completed public consultations on this issue and have published a report on their findings.

The Government of Canada supports the objectives of the Task Force and wishes to support its conclusions appropriately, recognizing that in Canada, the regulation of disclosures to investors is largely an area of provincial responsibility.

Canada’s financial markets are modern and sophisticated, and actors consider policy signals, such as a price on carbon pollution. The Pan-Canadian Framework on Clean Growth and Climate Change, adopted by First Ministers in December 2016, commits all Canadian jurisdictions to introduce carbon pollution pricing in 2018.  This policy signal carries tangible factors for financial markets that could change risk-reward profiles for investors and increase incentives to allocate capital to sustainable projects. By lowering the relative costs of projects that reduce emissions (e.g., by reducing carbon pollution pricing liabilities), a price on carbon pollution provides a means of increasing relative profitability, and in turn access to financing, for low-carbon projects.

At the same time, there is merit in investigating if there are market failures that, for example, make it difficult for investors to value climate risks related to projects and assets, leading to a misallocation of capital. This underscores the complementary importance of timely, consistent and comparable climate-related disclosures from both the suppliers and users of capital in the Canadian economy.

Role of the expert panel

On behalf of the Ministers of Environment and Climate Change (ECCC) and Finance, consult with Canada’s financial market participants on issues related to sustainable finance, including climate-related disclosures.

Work with the private sector and the federal government, in collaboration with securities commissions, to promote awareness among Canadian financial market participants of climate-related risks and to advance the recommendations of the TCFD. Where feasible, engage industry participants to dialogue on private sector-led approaches and collaboration or through private-public leadership.

Draft a report to Ministers outlining:

  • global trends in sustainable finance, including climate-related risk disclosure
  • roles and responsibilities for sustainable finance in Canada
  • opportunities and challenges relating to sustainable finance and climate-related risk disclosure in Canada
  • recommendations of potential next steps the Government of Canada may wish to consider within its area of jurisdiction
Panel members

Tiff Macklem

Tiff Macklem is the Dean of the University of Toronto’s Rotman School of Management. He served as senior deputy governor of the Bank of Canada, as well as chief operating officer and a member of its board of directors. Dr. Macklem also served as associate deputy minister of the Department of Finance and Canada’s finance deputy at the G7 and G20. He also served as chair of the Standing Committee on Standards Implementation of the Financial Stability Board. In that role, he worked to establish an international system of peer review to promote and assess the implementation of new financial standards across the 24 most financially important countries in the world.

Since joining the Rotman School of Management, Dr. Macklem has been appointed Chair of the Board of the Global Risk Institute, Chair of Ontario’s Panel on Economic Growth and Prosperity, Director of Scotiabank, and member of the Asian Business Leaders Advisory Board.

Andrew (Andy) Chisholm

Andy Chisholm is a member of the board of directors of the Royal Bank of Canada. He spent most of his career at Goldman Sachs & Co, in New York. Mr. Chisholm served as head and co-head of the Global Financial Institutions Group, in London and New York, and globally as senior strategy officer of the firm. He also served as co-chair of the Firmwide Commitments Committee, primarily overseeing the firm’s equity underwriting activities.

Mr. Chisholm holds a Master of Business Administration degree from the Ivey Business School at the University of Western Ontario and a Bachelor of Commerce degree from Queen’s University. He serves as the chair of the advisory board of the Ivey Business School; a board member of Evergreen Brick Works, in Toronto; and he sits on the advisory board of ArcTern Ventures, an early-stage clean-technology venture-capital firm.

Kim Thomassin

Kim Thomassin is the Executive Vice-President of Legal Affairs and Secretariat, with the Caisse de dépôt et placement du Québec. She manages the Legal Affairs, Corporate Secretariat and Compliance, and Responsible Investment teams. She is a member of the executive committee, in addition to being a member of the board of Ivanhoé Cambridge, the institution’s global real-estate subsidiary. Before joining the Caisse de dépôt et placement du Québec, she served as the national client leader and managing partner for the Quebec region, at McCarthy Tétrault.

Ms. Thomassin received a Bachelor of Civil Law degree from the Université Laval and a Minor in Psychology from McGill University. She also studied at the University of Western Ontario’s Faculty of Law, and she is a member of the Quebec Bar.

Barbara Zvan

Barbara Zvan is the Chief Risk & Strategy Officer for the Ontario Teachers’ Pension Plan. She leads the Strategy & Risk team in supporting the plan sponsors, in plan-design decisions, and the board, in determining the appropriate benchmarks and risk appetite. She drives the responsible investing and climate change risk management and strategy for the fund and directs the enterprise and operational risk-management approach for the organization.

Ms. Zvan is a fellow of the Society of Actuaries and the Canadian Institute of Actuaries, and she holds an Institute of Corporate Directors designation and a Master of Mathematics degree from the University of Waterloo. She also serves as the chair of the International Centre of Pension Management and on the boards of Cadillac Fairview, Global Risk Institute, and the Canadian Coalition for Good Governance.

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