The Canadian Expert Panel Report

What is the Canadian Expert Panel on sustainable finance?

The Canadian Expert Panel on Sustainable Finance was convened in April of 2018 by the Minister of Environment and Climate Change Canada (ECCC) and the Minister of Finance. The panel’s terms of reference included working with the private sector and the federal government to consider private-public leadership opportunities to advance sustainable finance in Canada. The panel consulted with a variety of leaders and experts from academia, industry, government, and other organizations to produce an interim report in October of 2018. That report served as the basis for extensive additional research and discussions, including several roundtables, written submissions and bilateral consultations, culminating in the publication of their final report in June of 2019. One of the panel’s main messages is calling on governments, regulators, and businesses to “consider these recommendations in charting Canada’s course toward a sustainable, prosperous, and resilient future.”

Who are the members of the Canadian expert panel?

Andy Chisholm is a member of the board of directors of the Royal Bank of Canada, the former head of the Global Financial Institutions Group at Goldman Sachs & Co. and a member of the ISF’s Advisory Board.

Tiff Macklem is the Governor of the Bank of Canada.

Kim Thomassin is Executive Vice-President of Legal Affairs and Secretariat with the Caisse de dépôt et placement du Québec.

Barbara Zvan is the President and CEO of the University Pension Plan, and the former Chief Risk & Strategy Officer for the Ontario Teachers’ Pension Plan, and a member of the ISF’s Advisory Board.

What are the panel's key recommendations?

The final report includes the following 15 recommendations, organized along three mutually reinforcing pillars:

Pillar I: The Opportunity

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

Pillar II: Foundations for Market Scale

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

Pillar III: Financial Products and Markets for Sustainable Growth

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

Are other countries taking similar action?

Several nations and groups of countries have engaged in similar sustainable finance initiatives including:

• the United Nations Environment Programme – Finance Initiative;
• the G20 Sustainable Finance Study Group (SFSG);
• the OECD Centre on Green Finance and Investment;
• the Sustainable Stock Exchanges Initiative; and,
• the Central Banks and Supervisors Network for Greening the Financial System (NGFS).

Like the report prepared by the Canadian Expert Panel, several countries have developed recommendations, roadmaps, or commitments, which provide actionable sustainable finance strategies. These documents were prepared by expert panels, task forces, working groups or independent think tanks. The countries include: China, Italy, Singapore, France, Australia, New Zealand, Norway, the EU, and the U.K. Several of these reports have been followed up by associated Action Plans.

Where does Canada go from here?

The Expert Panel has provided Canadians with a solid, high-level blueprint for finance to play a critical role in addressing climate change and in supporting the transition to a sustainable low-carbon economy. We must empower our financial sector to design a made-in-Canada sustainable finance system so that over the long-term, Canadian firms can compete successfully among their global peers.

All 15 recommendations were endorsed by the federal government in pre-budget materials in February 2020, just prior to the COVID pandemic disrupting those budget plans. Ultimately, the impact of the report will be determined by whether its high-level recommendations are transformed into practical and specific actions that facilitate a prosperous transition. As the report notes “The recommendations across all three pillars of this report are highly interconnected and the success of each will, to varying extents, rely on the implementation of others.”

There has been progress made on several of their recommendations from various stakeholders, and to varying degrees. A September 2021 ISF report provides a two-year update on progress on these recommendations, as part of a broader discussion regarding sustainable finance progress in Canada.¹ The overall conclusion of the report is that progress has been made, but that a significant amount of work needs to be done and we need to accelerate our progress on sustainable finance issues.

The ISF update report identified the following seven major areas of key priorities for sustainable development in Canada, all of which have a high degree of inter-connectivity to the Expert Panel recommendations:

1. Accelerated action and execution is needed.
2. Our financial ecosystem needs to embrace change.
3. Canadian-specific solutions are required.
4. Sustainable finance must include more than climate.
5. Canada’s net-zero transition requires a more unified approach and narrative.
6. While climate mitigation is critical, we need a greater focus on adaptation and resiliency.
7. Clean Innovation and other opportunities need more support.

• ¹Source: "Changing Gears: Sustainable Finance Progress in Canada," ISF, September 2021.