On March 24, 2022, Senator Rosa Galvez introduced Bill S-234, the Climate-Aligned Finance Act, to align the Canadian financial sector with climate commitments.
The new legislation would require financial institutions, and Crown corporations, to commit to set of climate-aligned priorities, including:
- developing action plans and targets;
- establishing a duty of alignment with climate commitments for directors and officers of entities;
- requiring the appointment of a person with climate expertise to certain boards of directors;
- and establishing a capital adequacy requirement, proportionate to the climate risks generated by the financial institution in question.
In developing the Bill, Senator Galvez consulted dozens of national and international experts across the sustainable finance sector to inform the broad priorities of the document. SHARE’s Engagement Research Specialist, Mike Toulch, worked with the Senator’s team to provide input in the context of institutional investor stewardship, and the critical importance of early and ambitious action.
The Bill was developed in collaboration with the Sustainability Ecosystem at Concordia University, as well as our peers at the Trottier Family Foundation.
Over the past few years, we have seen the launch of a number of commercial incentives to lower institutional emissions, but it is unlikely that we will see real change until Canada’s financial regulations require a genuine alignment with climate commitment, as well as climate risk disclosure. As stated in the “What We Heard”: Aligning Canadian Finance with Climate Commitments report, “now is the time to urgently address the risks that finance poses to the climate.”
We look forward to tracking the progress of this Bill, and hope to see movement towards concrete legislation. To learn more about our climate engagements, visit our Climate Action Impact page, explore our Investor Initiatives, or get in touch.
