In Canada, sustainable finance has developed within the voluntary frameworks and best practices developed through the International Capital Market Association’s (ICMA) Green Bond Principles, Sustainability-Linked Bond Principles, Social Bond Principles and the Climate Transition Finance Handbook. There is broad market acceptance of the various sustainable finance instruments contemplated within these frameworks.

Growing market understanding of the importance of environmental, social and governance (ESG) considerations to stakeholders has led more companies to adopt voluntary sustainability disclosure frameworks as part of their regular disclosure, which, in turn, has facilitated the utilization of sustainable financing instruments. Companies are adopting net-zero emissions targets in line with Canada’s national commitments.

More regulation around ESG disclosure and sustainable finance is on the horizon. The federal government in Canada has recognized the potential for driving emissions reductions through climate-related regulatory requirements in the financial sector, and disclosure requirements for certain federally regulated financial institutions are in place. The federal government has also announced its intention to amend the Canada Business Corporations Act to require climate-related financial disclosures for large, federally incorporated private companies.

In a chapter for Lexology’s In-Depth: Sustainable Finance Law, Bill Gilliland, Hazel Saffery and Heather Bonnell examine trends and regulatory shifts, offering insights to help businesses navigate the evolving sustainable finance landscape in Canada.

Access the full publication to learn more.

If you have any questions about sustainable finance in Canada, please contact Bill Gilliland, Hazel Saffery or Heather Bonnell.

This chapter was first published by Lexology.