Investment industry veteran Andy Chisholm, a leading voice in the effort to mobilize finance for Canada’s net-zero transformation, has a strong message for policymakers: stop studying the problem and just get on with it. “For goodness sake, the stuff that’s lying on our desks, get it done,” Chisholm said last week in a passionate call to action at the Sustainable Finance Forum in Ottawa. “We don’t need new reports. We have libraries full of fabulous reports. Let’s just act on the ones that we’ve got.”
In 2018, Chisholm was appointed to the federal government’s Expert Panel on Sustainable Finance to make recommendations on how Canada could meet the enormous challenge of raising capital to fight climate change and build a low-carbon economy. The panel called for sector-by-sector decarbonization plans, corporate climate disclosure rules and investment incentives for clean energy and fossil fuel emission reductions, among other recommendations.
Time is running short to create needed investment flows, said Chisholm, a Royal Bank of Canada board member who served 30 years in New York and London as a senior executive with global banking powerhouse Goldman Sachs. The Finance Department estimates that Canada will need between $125 billion and $140 billion a year of investment to meet its net-zero targets, far more than the $15 billion to $25 billion invested now.
“Emissions are nowhere near what we want them to be,” Chisholm said. “They’re nowhere near what we hope they would be, and they’re nowhere near what we need them to be. Conditions are probably, in some ways, getting worse rather than better.”
Losing race for sustainable economy
Canada’s greenhouse gas emission targets aren’t the only thing at stake, Chisholm said. Much bigger investments are needed to keep up in the global sprint to decarbonize the economy. Canada desperately needs to raise its ambition to play in the “game” of the global sustainable economy of electric vehicles and clean energy, sectors dominated by China and the United States. “We’re not winning this game, and we need to be a lot more aggressive.”
The government has failed to act on a key recommendation in the Expert Panel on Sustainable Finance’s 2019 report to work “deeply hand-in-hand” with Canada’s largest companies on decarbonization plans for their sectors, Chisholm said. “We’re not very far along that path,” he said, adding that government-to-business, government-to-government and business-to-business relationships need to be intensified.
Canada is also lagging behind in planning for the increased electrification of its economy, a key recommendation in the report, which has become more urgent with rising data-centre power demand. “We’re nowhere near the intensification and clarity we need.”
Chisholm was appointed to the expert panel along with three other financial industry heavyweights: Tiff Macklem, now governor of the Bank of Canada; Kim Thomassin, senior executive of the $400-billion Caisse de dépôt et placement du Québec; and Barbara Zvan, now CEO and president of Ontario’s $12-billion University Pension Plan.
After two years of inaction, partly due to the COVID pandemic, the government appointed the Sustainable Finance Action Council (SFAC) in 2021 to implement the expert panel’s recommendations. But the range of activity narrowed over the years. Work on a taxonomy that would provide an official green and transition investment standard for banks, funds and asset managers progressed slowly, bogged down by disagreement over whether to include oil and gas decarbonization projects.
A working group was able to forge a consensus on the taxonomy recommendations in March 2023, and the SFAC wrapped up its work in March 2024. But it wasn’t until just this past October that Finance Minister Chrystia Freeland announced that the taxonomy would go ahead, although even now it is not expected to be fully operational for another year.
Political realities loom over conference
The two-day Sustainable Finance Forum, the third in an annual gathering pulled together by social innovation consultant turned Liberal MP Ryan Turnbull, attracted about 700 consultants, community economic-development organizers, policymakers, climate campaigners, think tank staffers and financiers.
Despite the bleak picture he painted, Chisholm’s remarks were well received by participants in the conference, where Donald Trump’s re-election and the prospect of a Pierre Poilievre government in Canada cast a shadow over the country’s prospects for sustainable finance.
Sustainable investment incentive programs could be on the chopping block under a Poilievre government, including the $15-billion Canada Growth Fund, carbon pricing policies and a cap on oil and gas emissions.
In an armchair discussion with Turnbull at the opening of the conference, Prime Minister Justin Trudeau seemed to recognize the frustrations of Canadians who do not support these policies. “It’s understandable – and right now when people are squeezed every single day at the grocery store, in paying the rent, in thinking about whether their job is going to hold them to retirement, what their kids are going to do, it’s really easy to scare people into being even more anxious,” Trudeau said.
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Sustainable finance and social innovation can help Canadians “get over this funk,” the prime minister said, arguing that they can help finance businesses that are meeting people’s daily needs while protecting the climate and economy.
The policies are necessary to help Canadians prosper in a more crisis-ridden future, even though they may seem out of sync with the current funk felt by millions of people, Turnbull says. He serves as parliamentary secretary to both the finance minister and to the innovation and industry minister, an indication of his influence in the Trudeau administration. He has been a dogged advocate of sustainable finance in the government and has built a base of support for it through the annual forum. “I spent two years of my life rallying this forum and using the momentum built in these conversations to get things done,” he says. The delays that Chisholm spoke of were caused by the need to avoid “a quagmire of different kinds of standards and disclosure requirements across Canada,” he says.
“What we’re talking about is creating a resilient economy that can absorb the shocks of other crises that are coming,” he says, speaking of the strain on Canadians and the limited support for sustainable finance policies. “We need to raise our ambition, which is the exact opposite of what you would think we should do at a moment when Canadians just want us to meet their immediate needs.”
Eugene Ellmen writes on sustainable business and finance. He is a former executive director of the Canadian Social Investment Organization (now the Responsible Investment Association).
