17 December 2021
The UNEP FI Regional Roundtable for North America was held virtually as part of the first Sustainable Finance Summit with Finance Montreal on 4-8 October 2021. The event welcomed 600+ delegates and 30+ speakers to help define the role of banking, insurance and investment in shaping ambitious responsible and sustainable strategies to proactively address the challenges and opportunities of a green recovery whilst transitioning to a low-carbon, inclusive and sustainable future.
In the first panel, speakers discussed how the financial sector addresses climate change impacts on the sector and recommended that financial institutions set ambitious science-based targets among other concrete actions. Members from Net-Zero Alliances discussed the role of the financial sector and regulators in achieving net-zero goals, as well as Canada’s contribution to sustainable finance globally. The next panel discussed national and global taxonomies, obstacles including the data challenge, and the importance of supporting businesses to transition. Data challenges and solutions were also discussed in the third panel, which focused on how the financial sector has a key role to play, and opportunities to seize in supporting economies and societies transition. In the panel on banking, speakers discussed the benefits of the Principles of Responsible Banking as a guiding framework for sustainability strategies and measuring impacts. Speakers on another panel discussed the need to consider a Just Transition and the imperative of including indigenous communities early on. The next panel focused on how insurers can help people and economies build resilience by supporting green investments. The last panel stressed the importance of investing in biodiversity conservation, with all stakeholders and especially indigenous communities whose knowledge must be integrated in solutions.
The first panel of the Roundtable was a CEO dialogue where panellists discussed the impacts of climate change on the financial sector, and how financial institutions are responding to them. Speakers presented their ambitious climate strategies and action plans, which include creating financial products that promote industry decarbonising, increasing green assets, encouraging companies to transition, ensuring transparency, and building multi-stakeholder partnerships for systemic impact. Panelists encouraged financial institutions to take transforming steps like aligning with science-based frameworks to measure performances, and the business sector to have a shared taxonomy to reach the Paris agreement objectives. Panelists also stressed the importance of interim targets to build internal and external momentum, maintain trust with stakeholders, and measure progress and effectiveness. Speakers stressed that the financial sector cannot act alone: consumers, businesses, governments and financial institutions must all take concrete, creative and impactful action for a healthier and socially just world.
Clockwise from the left: Nili Gilbert, Vice Chairwoman, Carbon Direct; Guy Cormier, President, CEO, Desjardins Group; Charles Emond, President, CEO, Caisse de dépôt et placement du Québec (CDPQ)
In this panel, members of three net-zero alliances talked about how the financial sector can achieve net-zero and inclusive portfolios, and address challenges. Panelists discussed the need for the following actions: set up interim targets to guarantee transparency and accountability, invest in more impact portfolios, ensure that clients have solid strategies to meet net-zero targets, engage with industry associations, policymakers and regulators. Regulators have a role to play in guiding the transition by articulating the cost of inaction to better understand impacts and actions to take, and they could do this with a taxonomy based on North American realities. Speakers concluded with Canada’s potential contributions to global finance, which entails showing what transitioning looks like for carbon-intensive sectors like extractives, and tapping into the opportunities in the buildings, energy and transportation sectors, that the transition can bring.
Clockwise from the left: Eric Usher, Head, UNEP FI; Roger Beauchemin, CEO, Addenda Capital; Christine Bergeron, President & CEO, Vancouver City Savings Credit Union (Vancity); Rob Wesseling, President, CEO, Co-operators
In the next session, panelists discussed the importance of taxonomies in helping economies transition and the usefulness of public and private collaboration. Speakers noted the trend towards national taxonomies but stated the need to initiate conversations about a global taxonomy that would strike the right balance between comprehensiveness, specification, usability and stringency; current taxonomies should improve on addressing the social aspects of sustainability. Panelists spoke about the Canadian taxonomy, currently being developed by the Canadian financial sector, which aligns with the Paris agreement and science-based pathways and targets. Speakers said that legislators and regulators need to provide clarity on comparability including mapping taxonomies with pre-existing frameworks and mapping local standards to international ones. Panelists mentioned that it is important to make heavy emitting industries, like agriculture, transition, and to create a credible sectoral roadmap against which a company’s transition plan can be assessed. Moving forward, panelists mentioned engaging with businesses as they have been working on such topics, providing the tools that the market needs, creating consistency between ESG frameworks, and ensuring that taxonomies evolve with new knowledge.
Clockwise from the top left: Daniel Bouzas, Europe Regional Coordinator, UNEP FI; Karen Degouve, Head of sustainable business development, Natixis; Denisa Avermaete, Senior Policy Adviser, European Banking Federation; Peter Johnson, Director, Scotiabank
In this panel, speakers spoke about how the financial sector addresses and assesses climate-related physical risks. Speakers spoke about how physical risks are defined in the financial sector and mentioned acute risks like extreme events which can be used to understand portfolio exposures and needed action, as well as chronic risks with gradual long-term effects. Speakers discussed data needs including climate data for better modeling, data that is holistic for systems level thinking, asset and location-specific data to assess such risks, damage data to understand the cost of repair and internal data to understand the financial institutions’ own exposures. On adaptation, speakers discussed the importance of building internal resilience in the form of net-zero and transition commitments, supporting business in transition, integrating the interconnectedness of climate-induced physical risks, investing in climate technology and infrastructure, and communicating more on the transition costs to ensure a social license to operate. On new financial products like green bonds, they said that we need to make sure that capital is indeed getting to solutions. Speakers advised not to focus on one issue like removing carbon and also think about social impacts, whilst noting that physical and adaptation requirements are just as important as transition risks.
Clockwise from the top left: David Carlin, Task Force on Climate-related Financial Disclosures Lead, UNEP FI; John A. Cook, Senior Vice President, Portfolio Manager and Investor Engagement, Team Co-Lead Mackenzie Greenchip Team Investment, Mackenzie Investments; Nicole Vadori, AVP & Head of Environment, TD Bank Group; Margaret Eve Childe, Head of ESG, Canada, Manulife Investment
In this panel, panelists talk about how signatories to the Principles for Responsible Banking are delivering on their commitments, and what civil society expects from North American banks. The banks highlighted the following benefits of the Principles: understand how to determine and measure impacts, identify and improve on impact areas, create frameworks for developing sustainability strategies and articulate them when engaging in multi-stakeholder dialogues. In joining the Net-Zero Banking Alliance, speakers said that its guidelines support robust climate target setting, interim and long-term. Data gathering and disclosure, and client engagement have to improve; the discussed CERES Ambition 2030 initiative is poised to be a solution especially in key emitting sectors. Panelists said the Canadian government’s net-zero commitment is important in collaboratively finding solutions and making it necessary to consider the impact on other SDGs. Speakers said that regulators have to work on mandatory climate disclosures, and incentives. Panelists mentioned the importance of a planned and just transition, and contributing to social finance.
Clockwise from the top left: Puleng Tumelo Ndjwili-Potele, Interim Banking Team Lead, UNEP FI; Claude Breton, Vice-President, Public Affairs and Corporate Social Responsibility, National Bank; Davida Heller, Senior Vice President of Sustainability & ESG, Citi; Dan Saccardi, Senior Director, Company Network Ceres
In this panel, speakers talked about what the Just Transition means for this global transition towards a cleaner and healthier world, and how to ensure its success. Speakers stressed that social justice and equity should be at the center of climate action, and that if the transition is not planned properly, it risks harming vulnerable communities. Panelists emphasised the imperative to include Indigenous communities and first nations in decision-making processes from the beginning and stated that financial institutions could be strong allies when these communities engage in dialogue with policymakers. Speakers talked about having strong political governance to make sure that resources are funneled into transition solutions that also benefit society. They also discussed the importance of “place-based investments” in localities, for financial institutions to think about impacts on socioeconomic well-being especially as they develop energy portfolios, and find ways to measure progress. Panelists stressed the importance of stakeholder engagement, as well as collectively identifying policy and commercial barriers to enable technologies and solutions that will create new industries for green job creation and shift industries.
Clockwise from the top left: Layalee Ramahi, North America Network Coordinator, UNEP FI; Camilla Roman, Policy Specialist, International Labour Organization; Susan McGeachie, Head, BMO Climate Institute; Mijin Cha, Assistant Professor, Urban and Environmental Policy, Occidental College; Mark Podlasly, Director, Economic Policy, First Nations Major Project Coalition
During the next panel, speakers emphasised the opportunity and obligation that insurers have to support customers, communities and businesses to cope with the physical impacts of climate change and building resilience. The insurance industry can future-proof critical infrastructure that is vulnerable to weather and mobilise funding to protect communities. Speakers said that engaging governments is necessary to make climate resilience a priority political issue and will ensure that policymakers are held accountable and follow through on their commitments. They noted that governments have critical data and insurers could create opportunities to share and merge this information, and test solutions to assess the effectiveness of an investment. Panelists highlighted community-based approaches as critical to closing the protection gap. They discussed investments in nature-based solutions as being effective to build resilience and discussed that the insurance industry should support the protection and preservation of features like wetlands, forests, and green infrastructure. They noted that Canada can globally contribute with its leadership on solutions like flood resiliency and fire-smart guidelines. Panelists stressed that the insurance industry should embed a focus on customer and company climate risk resilience in its operations and include a social lens in its project approvals processes.
Clockwise from the top left: Butch Bacani, Programme Leader, Principles for Sustainable Insurance Initiative , UNEP FI; Moira Gill, Associate Vice President Environment, Government and Industry Relations, TD Insurance; Michael Peterson, Inaugural Deputy Commissioner, California Department of Insurance; Mandy Dennison, Director, Social Impact, Sustainability & ESG, Intact
In this panel, speakers talked about how indigenous community leaders, the financial sector, businesses and policymakers can collaborate to mobilise financial flows for biodiversity conservation. Speakers highlighted the importance of nature preservation and access to natural resources for indigenous culture and community well-being; they said that multi-stakeholder collaboration is imperative, and not only should indigenous people hold decision-making power but traditional knowledge must also be incorporated in investments and projects for biodiversity conservation. Panelists called for a shift in how we value nature and ecosystem services, and align our economies and investments with actions that support biodiversity conservation and climate. Speakers stressed the need to think beyond traditional investment models and attract varied forms of investments and funding sources with varying degrees of risks and return that would create economic opportunities for indigenous, rural and local communities. Speakers said that governments have a role in collaborating with the financial sector, communities and civil society to support holistic nature-positive investments and nature-based solutions.
Clockwise from the left: Hilary French, Program Management Officer, Regional Coordinator for Climate Change, Chemicals and Waste, and Resource Efficiency, UNEP; Mandy Gull-Masty, Grand Chief, Grand Council of the Crees (Eeyou Istchee), Eeyou Istchee; Hadley Archer, Executive director, Nature United