Expert Panel Releases Final Report – Moving Sustainable Investing into the Mainstream
We are encouraged by the message in last week’s “Final Report of the Expert Panel on Sustainable Finance.” While the interim report provided a range of financial market structures, activities, and products that could bring Canada closer to a low carbon transformation, the “Final Report” provides concrete solutions and calls on the broader business, economic and investment actors to lead the charge, with Canada in a position to play a role as a “decision maker” – as opposed to decision-taker.
Major recommendations from the report address bottom-up solutions: from incorporating incentives for individual Canadians to save and invest in climate-tied solutions, to embedding climate-related risk and monitoring of our financial system and ultimately to regulatory changes and private sector support for infrastructure development that promotes long-term sustainable growth. Being at the forefront of these steps should be top-of-mind for all investors.
Clean is now mainstream
The “Final Report” serves to mobilize the financial services industry towards sustainable investing. Highlighting that climate change has been brought out of the margins and into the mainstream: visibly impacting consumer behavior and economic activity – through consumer product development, growth of the EV market, sustainable building and construction, renewable energy projects – thereby transforming overall competitiveness of the sector.
We couldn’t agree more. At Inerjys, we provide growth capital that focuses on commercializing cleantech companies. Our team looks for early and growth stage companies that provide disruptive solutions for mitigating climate change across Canada. Currently, we are looking specifically at applications that serve to transform Canada-tied industries and infrastructure: sustainable processes for resource extraction, urban transportation solutions and rural infrastructure development.
We have had the good fortune of engaging with some of Canada’s most promising clean energy companies and view enormous commercial and market potential behind the new energy transition.
From our perspective, investing in clean energy represents more than a token sector allocation and should be examined from a long-term perspective. Canada’s leading institutional investors, specifically large asset owners such as pension funds, can and should play a key role here, given their long-term investment horizons and really for overall alignment with their current and future beneficiaries. Fiduciary duty can no longer exclude the impact of climate change, given the potential to affect capital flows, risk management, valuations and overall stability of the financial system.
In lock step with the Expert Panel, we view that the financial services industry must continue to play a key role in in providing economic and market support for the new energy transition.