Five Takeaways from the 2024 Sustainable Finance Forum

Nearly 700 delegates gathered in Ottawa at the end of November at the 2024 Sustainable Finance Forum to explore how financial markets can drive socio-economic and environmental progress while continuing to build momentum around initiatives that are accelerating the transition to an inclusive, low-carbon economy.

Here are our five takeaways from the 2024 Sustainable Finance Forum:

1. Climate action is integral to Canadian economic competitiveness

“When a country sets a clear goal and aligns policy with it, it becomes profitable for companies to be part of the solution and costly to remain part of the problem.”

~Mark Carney, UN Special Envoy on Climate Action and Finance; Co-Chair, GFANZ

Implementing credible action is increasingly seen as necessary for economic competitiveness. According to research presented at the conference by Mark Carney, companies that reduce their emissions outperform those who do not. However, policies are needed to enable capital markets to increase investment flows in the net-zero transition.

The Net Zero Policy Matters report, published by the Taskforce on Net Zero Policy last month, suggests current policies across the G20 lack the scope, depth and ambition required to drive action in alignment with a 1.5° future. Indeed, Canada’s Department of Finance estimates that Canada will need between CAD 125 – 140 bn per year of investments to meet its net zero targets, much more than the CAD 15 – 25 bn currently being invested.

2. Taxonomies will facilitate investments in the transition to net-zero

In October, the Government of Canada announced the development of a Canadian sustainable finance taxonomy. Otherwise known as sustainable investment guidelines, the taxonomy will provide Canadian capital markets with clarity about business activities that are aligned with 1.5°C decarbonization pathways and the transition to a net-zero economy. In doing so, the taxonomy will play a critical role in mobilizing the significant capital needed to support Canada’s efforts to mitigate climate change and keep global warming within 1.5°C above pre-industrial levels. For more details, see our Five-Minute Brief here).

As international governments develop their own taxonomies, it is important that they reflect unique national economic, financial and environmental contexts, and are integrated into broader economic strategies and national climate plans. As best possible, they should also be globally compatible, providing certainty for companies and financial institutions with international operations.

In the Canadian context, the conference panelists reinforced that transition-related activities in carbon-intensive sectors need to be a part of the taxonomy to encourage decarbonization capital to flow towards them. They also underscored the importance of leveraging learnings from other jurisdictions that have adopted taxonomies with an eye to aligning on priority sectors and eligibility criteria, where appropriate.  

With respect to social finance, Sustainable Finance Forum participants were among the first to hear about the Pilot Social Equity Lens Investment (SELI) Coding System. This new tool is a taxonomy that will track progress towards the Social Finance Fund’s (SFF) targets to advance social equity and gender equality. The SELI taxonomy will be available in spring 2025 to any investors that wish to adopt it.

3. Indigenous economic participation and reconciliation are essential for a net-zero future

Nearly all conversations at the Forum included mechanisms and tools to enable Indigenous participation, ensuring that projects are inclusive and support reconciliation. Globally, Indigenous lands contain about 80% of Earth’s remaining biodiversity, according to the International Institute for Sustainable Development’s Policy Brief, Indigenous Peoples: Defending an Environment for All.

Many financial instruments and programs from and for Indigenous people, businesses and communities, like the Indigenous Loan Guarantee Program and First Nations Finance Authority (FNFA) Indigenous Growth Fund, were used to illustrate how the National Indigenous Economic Strategy is being implemented.

4. Agriculture can deliver both carbon reduction and food security

Solving the climate crisis must include a focus on agriculture, one of the largest contributors to greenhouse gas (GHG) emissions. Indeed, 10% of Canada’s GHG emissions are from crop and livestock production, excluding emissions from the use of fossil fuels from fertilizer production, according to Agriculture Canada. However, according to Farm Credit Canada, productivity is declining and crop yield growth has plateaued. Agriculture is a key part of the Canadian economy and an industry that we can build competitive advantage in if it makes the necessary changes to adapt to climate change. Canadian companies like RBC and McCain (who spoke on the panel) are advancing major projects like Canadian Alliance for Net-Zero Agri-food (CANZA) to address this opportunity.

5. Focusing governance on corporate purpose can catalyze progress

Dr. Victoria Hurth, Fellow of University of Cambridge Institute for Sustainability Leadership, reminded conference attendees that a transition to a low-carbon economy that delivers long-term well-being for all will require transformational changes to our economy. These changes will only be achieved, according to her, if we shift the focus short-term financial interests and doing no harm to making long-term wellbeing the purpose of all companies. Dr. Hurth purported that corporate governance must centre on this purpose in order to achieve it.

Organizations and tools are emerging to support companies in articulating their purpose. The Canadian Purpose Economy Project, formed in 2020, is working to stimulate the purpose economy by creating the conditions for social purpose businesses to start and grow. Canada is also an active participant of Wellbeing Economy Governments (WEGo), a collaboration of national and regional governments sharing expertise and policy practices to advance their shared ambition of building Wellbeing Economies. Additionally, there is a new ISO Standard (37011) under development (expected to be finalized in 2026) that will define what a purpose-driven organization is and how it behaves with respect to governance and decision making. 

At Quinn+Partners, we advise businesses and investors to embrace sustainability, develop and implement climate transition journeys and target impact. If you are ready to take action, please get in touch.