Growing the sustainable economy

As companies and countries look to move to a low-carbon future, a question arises: How to finance that transition? One organization that’s working toward an answer is the Institute for Sustainable Finance (ISF), housed at Smith. Founded in 2019, the ISF is the first collaborative hub in the country that brings together academia, the private sector and government to increase Canada’s sustainable finance capacity. The 2020-21 year saw a number of ISF highlights:

In July 2020, the ISF received funding from Canada’s McConnell Foundation. The grant of $450,000 over three years was in addition to $150,000 in funding and will support ISF research, education and collaboration objectives.

In September 2020, the ISF released the Capital Mobilization Plan for a Canadian Low Carbon Economy, a groundbreaking report on Canada’s transition to a low-carbon future. Based on research, it found that Canada can meet its 2030 greenhouse gas emission targets through $128 billion in investments over the next decade—a highly achievable goal representing less than 0.62 per cent of Canada’s GDP and less than 10 per cent of annual capital expenditures of public firms.

In November 2020, Canada’s big five banks—TD Bank Group, Scotiabank, CIBC, BMO and RBC—committed $5 million to support the ISF’s efforts in education, professional training, research and collaboration, as well as outreach to advance Canada’s leadership in sustainable finance.

In April 2021, the ISF released the first-ever assessment of TSX companies’ climate target and disclosure performance. It found that only two-thirds of Canada’s publicly traded firms disclose GHG emissions, which is similar to U.S. firms, but well below those in the EU and the U.K. But it also found some good news: large emitters in Canada are not only starting to disclose their greenhouse gas emissions, they are starting to set climate targets.