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| 04/18/18

Ottawa steps up focus on sustainable finance ahead of G7

TCE

As the federal government faces down a simmering pipeline dispute between Alberta and British Columbia, on the international stage, Ottawa is readying itself to focus on climate change as host of this year’s G7 summit.

Amidst deepening controversy over pipelines in Canada, the federal government has prioritized ratcheting up global climate change targets and boosting sustainable finance ahead of the G7 summit the country is hosting in July.

Ottawa announced last week that it has struck an expert panel on sustainable finance along the lines of similar bodies recently put together by both the European Union and the United Kingdom.

Federal ministers of Environment and Climate Change and Finance hosted a round table discussion that included the governor of the Bank of England, Mark Carney, and representatives of banks, insurers, pension funds and energy companies. The talks were intended to take a sounding from these sectors ahead of the G7 meeting wherein climate change and sustainable finance are on the list of five major briefs on which Ottawa wants to see substantial international movement. With respect to climate change in particular, the federal government hopes to achieve an acceleration of action on global climate targets.

The expert panel is to investigate both opportunities and challenges from climate-related risks such as extreme weather events and wildfires. The insurance sector and investors have been keen to encourage businesses to be more open and consistent with respect to reporting how such phenomena could impact their financial standing.

Last year, a global task force comprising representatives of some of the world’s major financial institutions and headed by former New York mayor Michael Bloomberg and Carney, former boss of the Bank of Canada, issued a voluntary framework for climate impact disclosure.

The Canadian expert panel aims to build on this experience. The European Union has likewise established its own High-Level Expert Group on Sustainable Finance, and the UK has struck a Green Finance Taskforce, both of which are tasked with similar remit to that of the Canadian Expert Panel.

At the same time, developed countries face a challenge in delivering on pledges made to their poorer counterparts at UN climate talks over the last decade to ensure substantial flows of financial support to ease their transition to a low-carbon economy, and the global body’s Sustainable Development Goals likewise place an emphasis on sustainable finance. Funds are often slow to materialize, however, as cash-strapped OECD governments in many cases already face voter discontent over domestic austerity programs.

But if private sector actors can begin to recognize profitable opportunities for climate mitigation and adaptation investment, then such climate finance flow pledges may still be met.

The move comes as Canadian Prime Minister Justin Trudeau, while on his first official visit to France this week, signed a partnership agreement with French President Emmanuel Macron that includes pushing for a global price on carbon and reduction to transport-related greenhouse gas emissions.

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