Echoes of the Forum


Key takeaways

The future of financial disclosure will involve disclosing climate risk
The TCFD made it clear that boards have an obligation to disclose material climate risks to investors. While standards and norms around climate-related financial disclosure are still evolving, the TCFD is – and will continue to be – the foundation for voluntary, and possibly regulated, disclosure.  

Investors are having an impact on the shift to the low-carbon economy
Investors and asset managers are demanding more disclosure about climate risks than ever before. In July 2017, a combined 390 investors signed 
a letter calling upon the G20 leaders to support the TCFD recommendations. Many investors and asset managers are urging companies publicly to disclose material financial risks related to climate change. Some are even putting forward shareholder proposals to compel companies to report on their climate risk. Three shareholder proposals on climate change received majority shareholder support during the 2017 proxy season for the first time, forcing ExxonMobil, Occidental and PPL Corporation to address shareholder requests to comply with the TCFD recommendation on scenario analysis.

The role of the CFO needs to become forward looking
As extreme climate events like floods become the new normal, past risks have increasingly little value in terms of helping to predict future risks – and respond to them. Chief Financial Officers can no longer look backward at audited financials to shape their future strategies; they need to be forward looking.

Balancing innovators’ needs with investors’ needs is a challenge
Innovators often need long-term, intensive capital investment that will see them through long growth cycles and uncertain markets. That need doesn’t always fit with investors’ needs for an adequate rate of return. Innovators need to raise capital in order to grow and scale their solutions; however, investors hesitate in the absence of successful demonstrations on a commercial level.

Canada needs to collect and communicate more information on physical climate risks
Not only is Canada the only G7 country without a national plan for flood resilience but, according to a survey conducted by Partners for Action, 74 percent of Canadians do not think they are vulnerable to flooding – despite living in areas designated as high risk. Around the world, up to 70 percent of climate-related risk remains uninsured. This protection gap leaves people, businesses and communities vulnerable to extreme weather events.

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Finance and Investment

Climate change and carbon are increasingly on the radar of the finance and investment community. Climate risk, for example, is becoming a mainstream consideration for investors. This is signaled by recent milestones such as the Financial Stability Board’s Task Force on Climate-Related Financial Disclosure (TCFD) recommendations. The Task Force is not only made up of finance and business representatives, but its recommendations have been endorsed by more than 230 companies with a collective market capitalization of more than US$6.3 trillion.

Investment opportunities are also evolving. As our infrastructure ages and the need to build more resilient infrastructure becomes more pronounced, so too does the need for innovative financing. Traditionally, government has been the primary investor in infrastructure. However, with interest rates in a historically low pattern, there is an abundance of institutional capital waiting to be deployed.

Clean technologies are another emerging investment opportunity in the transition to a clean economy. Despite investors’ growing interest – and a global market worth $1.15 trillion – Canadian cleantech companies looking to grow and commercialize continue to face funding challenges.
 
 
 
 


The financial system consists of many actors: asset managers, insurers, institutional investors, retail investors, angel investors, venture capitalists, regulators, commercial banks, c-suite executives, policy-makers, and more. In the “Finance and Investment” track at GLOBE Forum 2018, we explored the roles these actors play in the global shift to a more prosperous, inclusive, low-carbon, and climate-resilient economy.
 
 
 
 


Here you will find:
 
 
 

Key takeaways  

Full session videos   

4 ways to accelerate the low-carbon economy

A closer look: speaker interviews, thought leadership articles  



>> Back to content overview


4 ways to accelerate the low-carbon economy 

Companies should act early in implementing the TCFD recommendations
According to Sarah Breeden, Executive Director of International Banks Supervision at the Bank of England, companies should try out the TCFD recommendations now so that they learn by doing in advance of climate-related disclosure becoming mandatory. Companies should focus on implementing scenario analysis – which involves determining the resilience of their strategies in different climate scenarios – as soon as possible.
 
 

Investors should communicate their approval when companies act to adopt the TCFD recommendations… 
…And when companies make low-carbon capital investments. This can accelerate the private sector’s shift to a low-carbon economy because it affirms that investors not only care about the actions of companies, but that they are watching the moves they make.  

CFOs need to start translating climate risk into financial risk
It is becoming the responsibility of the CFO to communicate to investors the financial impact that climate risk has on their company. This may require developing new skills so they can translate terminology used by scientists, engineers, and policymakers, into financial terminology. 
 
 

Government can remove regulations that inhibit the flow of capital into the low-carbon economy
In some cases, existing regulations restrict the asset classes that investors may want to invest in for sustainable/green returns. For example, current regulatory barriers restrict where insurers can pursue impact investing opportunities. 
   

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Session videos

The only place to enjoy full-length videos of our conference sessions.       

Kate Gordon, The Paulson Institute; Robert E. Rubin, Former United States Secretary of the Treasury; Robert Litterman, Kepos Capital - (left to right)

Hayley Woodin, Business in Vancouver; Don Forgeron, IBC; Louis Gagnon, Intact Financial Corporation - (left to right)

Nick Robins, UNEP; Jennifer Reynolds, Toronto Financial Services Alliance; David McGown, IBC; Roger J. Beauchemin, Addenda Capital; Marc Cevey, HSBC Global Asset Management (Canada) Limited - (left to right)

“Understanding what climate risks are is not something that only banks need to get a handle on, it’s what our corporate clients will have to understand too.” 

Maia Becker, Director, Environmental and Social Risk Policy, Royal Bank of Canada

"Awareness is incredibly low when it comes to knowing the risks that we as Canadians face. Without awareness, you cannot motivate consumers to action."

Don Forgeron, President and CEO, Insurance Bureau of Canada (IBC)


A closer look

Take a deeper dive into the conversations that took place at GLOBE Forum.

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“As an economist I’m confident the world will move very quickly to a low-carbon economy when businesses and consumers react to appropriate incentives.”

Robert Litterman, Chairman, Risk Committee and Founding Partner, Kepos Capital

Heard at GLOBE Forum

SPEAKER INTERVIEW

SPEAKER INTERVIEW

BLOG

Advanced economies that have invested in the Climate Investment Funds (CIF) have helped the developing world to better participate in the global energy transition, says CIF Head Mafalda Duarte.

GLOBE Series CEO Mike Gerbis gives us three reasons why we need to focus on investment, infrastructure and innovation when talking about clean growth.

There’s going to be a tremendous amount of capital deployed in renewable energy, especially in distributed energy opportunities around solar and energy storage, says Generate Capital CEO Scott Jacobs.

Renewable Energy for All

Investment, Infrastructure and Innovation.

The Resource Revolution – is it here?

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