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Canada’s largest bank is over a quarter of the way to reaching its $100-billion target for sustainable financing by 2025, according to its report on climate-related financial disclosure. “As Canada’s biggest bank, and one of the largest in the world based on market capitalization, we recognize that we have a role to play in accelerating the transition to a low-carbon economy and in mitigating the risks associated with climate change,” the report reads. About 4.6 per cent of RBC’s credit risk exposure in 2019 carbon-related. (The Logic)

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Talking point: RBC has been carbon neutral since 2017, having rolled out emission-reduction programs and offset its carbon output by purchasing credits. That same year, it started considering climate change as a risk to its business and began tracking and disclosing it across its portfolio. Disclosure is now the norm among financial institutions in Canada—all the Big Six banks, along with the biggest pension funds, support the Task Force on Climate Related Financial Disclosure (TCFD), a global standard for tracking and reporting climate risk on businesses. Still, many firms have been slow to meaningfully change their practices to address climate change. The TCFD’s 2019 status update found just 25 per cent of companies that committed to the guidelines complied with more than five of its 11 recommended disclosures. RBC, for its part, has set targets for five of the nine climate-related metrics it reported for 2019.

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The Bank of England governor, certainly among the Northwest Territories’ most famous exports, will be tasked with sensitizing the world’s business and financial sectors to the dangers of climate change—and to the economic benefits of going green. (Financial Post)

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Talking point: Carney and Michael Bloomberg can take some credit for the mainstreaming of climate-focused sustainable finance. In 2015, the Bank of England governor and the billionaire former New York City mayor spearheaded a global initiative called the Task Force on Climate-Related Financial Disclosures (TCFD). Its landmark 2017 report laid out 15 climate-related metrics—like emissions levels, water and land use—for organizations to measure and report on, and included recommendations on how to gauge climate risk. Last June, the Canadian government released its own report based on Carney’s initiative. His appointment takes effect next year, though Carney said he may stay on as governor should Britain’s exit from the European Union be as challenging as many have predicted.

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Leaders from the Gwich’in community are heading to Bay Street to pressure the country’s largest banks to follow the U.S. bank in ending funding for oil and natural gas drilling projects in the Arctic National Wildlife Refuge. (CBC)

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Talking point: The Indigenous leaders are set to meet with representatives of RBC, Scotiabank, TD and CIBC. All four banks have investments in Arctic energy development, with TD being the largest investor at about $400 million. Goldman Sachs is the first big U.S. bank to scrap financing for energy exploration, joining institutions like Barclays and the Royal Bank of Scotland, in the world’s fastest-warming region. Goldman Sachs’ new environmental policy, outlined Sunday as international climate talks in Madrid wrapped up, also prohibits financing for new coal-fired power plants that don’t have carbon emissions-reduction technology. The bank promised to invest US$750 billion in “sustainable finance” over the next decade.

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The firm is investing $1.4 billion to install two cogeneration units, which simultaneously produce heat and energy, at its plant near Fort McMurray, Alta. The units, which Suncor plans to be up and running in 2023, will also reduce operating costs and nearly double how much power the plant transmits to Alberta’s energy grid. (The Logic)

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Talking point: The firm, Canada’s second-largest oilsands producer, said replacing its coke-fired boilers with cogeneration units will reduce overall greenhouse gas (GHG) emissions in the province by 2.5 megatonnes per year. That’s a modest portion of Canada’s overall GHG production—Canada produced 716 megatonnes in 2017—but significant for a single producer, given that the oil sands account for about 10 per cent of the country’s emissions. The use of cogeneration technology in Alberta has steadily increased over the past 15 years, and is already being used by other large producers, including Cenovus Energy and MEG Energy. The move comes as energy companies face increased pressure from investors, regulators and consumers to clean up their operations. In June, Norway’s sovereign wealth fund, whose investments in Canada total US$28 billion, divested from firms that do oil and gas exploration and production unless they have renewable energy operations, like Suncor does. And, also in June the government released its first-ever report on sustainable finance, which included recommendations for oil and gas companies to focus on low-emissions infrastructure.

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The Canadian Centre for Climate Change and Adaptation will be built in St. Peters Bay, giving researchers at the 45,000-square-foot facility access to wetlands, forests and coastal habitats in the area. The federal and provincial governments are contributing a combined $9.7 million, the University of Prince Edward Island will provide $4.8 million and the Atlantic Canada Opportunities Agency is contributing $4 million. Research from the centre is meant to inform new green technologies, although the government did not say what exactly the facility would be studying or provide details of its R&D plans. (Canadian Press)

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Talking point: While the centre has been in the works for three years, its mandate fits with recent recommendations from Canada’s Expert Panel on Sustainable Finance. In its final report published in June, the group urged regulators to require companies to follow global standards for reporting their businesses’ impact on the climate, and the climate’s impact on their bottom lines. But the panel said complying with those standards is difficult because of a lack of consistent information on climate change and how it impacts the economy. As a solution, it suggested setting up a climate research centre to tackle some of the same problems the new PEI centre may now address.

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The four-person panel is asking the federal government to create a “super tax” incentive that gives Canadians a rebate for making investments in companies or products that reduce greenhouse-gas emissions. Among the report’s 15 recommendations, the panel is asking regulators to ensure companies comply with global standards for reporting their businesses’ impact on the climate and the climate’s impact on their bottom line; if they don’t, they need to explain why those standards aren’t relevant to their business. The federal government, which formed the panel, did not say whether it would follow the recommendations. “We look forward to working with the finance community and all Canadians to help position us as a global low-carbon leader,” said Finance Minister Bill Morneau. (The Logic)

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Talking point: The recommendations would help Canada catch up to G20 countries that have made more progress on the sustainable-finance file, particularly in the European Union, which is seeking to pass laws on environmental, social and governance (ESG) disclosure. While voluntary guidelines around ESG disclosure have been outwardly embraced, early reports show they aren’t always followed, even by proponents, as The Logic reported on Thursday. The Task Force on Climate Related Financial Disclosure (TCFD) status update in June shows that only 25 per cent of companies that committed to the global guidelines complied with five or more of its 11 recommended disclosures. The Canadian expert panel’s recommendations, if passed, would make it mandatory to follow the TCFD and help companies navigate how to do it. That piece is essential in verifying whether the green investments Canadians make would be eligible for the super tax.