Thursday, March 31, 2016

Vancity Investment Management’s Dermot Foley recently participated in a Carbon Talks event hosted by SFU, with the David Suzuki Foundation and the Centre for International Governance.

Joining Dermot on the panel of experts was Jeff Rubin, former chief economist at CIBC, and anti-oil-sands-expansion campaigner Karen Mahon. Key discussion topics included concern around the commercial viability of the oil sands, and proposed pipelines like Energy East.

The Tyee provides good coverage of the event: .

Here's an excerpt:
"...Vancity's manager of socially responsible investment funds, Dermot Foley, pointed out that Canada's climate pledges in Paris will put even more pressure on the oil industry -- and soon.
To stay "within that 1.5 to 2 degree limit," Foley said, "means that over the next five years we're going to see emission reduction targets, regulations, and carbon taxes becoming common throughout the global economy."
"We believe climate risk is manifesting as a business risk," he added. "It's time for government to come up with a transition plan for a low-carbon economy."

Thursday, January 28, 2016

Ontario Hits Green Bond Market for Second Time

The province of Ontario is poised to close its second green bond offering, according to reports, this time with a price of $750 million. In its first green bond issued in 2014, under the same framework, proceeds were used primarily to fund the Eglinton Crosstown rail link.

There's no word on what the province will fund with the newest green bond, other than they will be used for eligible projects, which means "all projects funded by the province that have environmental benefits, exclusive of fossil fuel and nuclear energy projects," the province said in a regulatory filing.

Ontario's first green bond was for $500 million for a term of four years. Ontario is so far the only Canadian province to issue green bonds. By comparison, China has issued $5 billion in green bonds so far this year.

Thursday, January 7, 2016

Ontario Credit Union Offers a Financial First: Socially Responsible GICs

Mennonite Savings and Credit Union (MSCU), based in Kitchener, Ontario, said Thursday that they are the first Canadian financial institution to offer socially responsible guaranteed investment certificates (GICs). Until now, the RI approach to investing, which involves sustainable screens, has been limited to mutual funds and market investments, the credit union noted.

"We are thrilled to be a leader in SRI," said Brent Zorgdrager, the MSCU's CEO. "Our commitment to our members is to to continue to look for ways to offer value-based products that connect faith and value with finances, inspiring peaceful, just and prosperous communities. Investments in the MSCU SRI GICs provide our members with the confidence that their funds support loans which clearly align with a sustainable, responsible view of their communities and the world."

ESG research firm Sustainalytics helped the credit union develop a set of socially responsible lending criteria to incorporate into its agricultural and commercial lending practices. These criteria include screening business borrowers for any involvement in industries such as alcohol, tobacco and gambling and for any significant negative impacts on the environment, human rights or communities. Once the screens had been in place for six months, Sustainalytics carried out a review of MSCU's lending portfolio to validate compliance with socially responsible criteria. Because these loans are funded by members' GIC deposits, the screens in place make sure the GICs are SRI compliant.

"MSCU's socially responsible GICs address a growing demand among individual investors considering the environmental and social impacts of their investments," said Sustainalytics CEO Michael Jantzi. "MSCU has embedded socially responsible criteria into its lending practices in an innovative way and in doing so is providing individuals with greater access to SRI retail banking products enabling them to align their investments with their values."

Responsible Investment Association CEO Deb Abbey said that while many financial institutions offer responsible investing options, MSCU is leading the way by integrating environmental and social factors into their GICs. "We're very excited to see them take this initiative," she said.

Wednesday, October 14, 2015

Canadian banks failing to consider climate change risks, says SHARE

A new research report from SHARE concludes that Canadian banks have not sufficiently integrated climate change considerations into their long-term business strategies and risk management processes.

The report notes that banks are particularly vulnerable to climate-change related risks because their financing activities span all sectors of the economy. Despite this exposure, however, Canada’s banks are not adequately considering the potential impacts of climate change in the way that they do business, the report notes.

“Canada’s banks are failing to demonstrate to their shareholders that they understand the implications of this fundamental risk to their core business,” says SHARE’s Director of Responsible Investment, Shannon Rohan, who also authored the report. “It is critical for investors that are concerned about the long-term risks associated with climate change to push for improved performance by Canada’s banks in integrating climate change considerations in their business strategies and risk management processes.”

The report, “Banking on 2°: The Hidden Risks of Climate Change for Canadian Banks,” includes a set of recommendations suggesting how Canada’s banks can more effectively manage climate change risks and catalyze the transition to a low carbon economy.

The recommendations include integrating climate change considerations into risk management, establishing carbon reduction targets and incentives to achieve them, and disclosing meaningful information to investors.

To date, five of the big banks have disclosed information under the CDP program. While all five referenced risks from uncertainty around new regulation as well as potential impacts of energy efficiency regulation and carbon taxes, all of the banks considered those risks to be low.

“In their most recent CDP disclosures the banks acknowledge the reputational risks associated with their financing of carbon-intensive industries, although it is not clear how any of the banks are managing this risk,” the report says. “We find that Canadian banks’ disclosures of their consideration of systemic risks associated with climate change and the potential impacts of transitioning to a low carbon economy on their overall business model fall short of what is needed by investors to make informed investment decisions.

Download the full report.