Sustainable finance at the forefront in Montreal

2023-05-30 04:36:27

The financial sector will meet Tuesday and Wednesday in Montreal for a third summit on sustainable finance during which climate change, biodiversity and the just transition will be on the menu of discussions.

“This summit is part of an ambitious strategy that we have for Quebec, which is to strengthen its position as a center of sustainable finance,” explains Jacques Deforges, General Manager of Finance Montreal, which is organizing the event in collaboration with Fondaction, where nearly 500 people are expected.

“It must be said that the Quebec financial ecosystem already has a strong penchant for sustainable finance. We need only think of the Mouvement Desjardins, which is the largest financial cooperative in North America. Let’s also think of the Solidarity Fund for Quebec Workers or Fondaction,” he explains.

Another example is the creation last summer of an International Sustainability Reporting Standards Board (ISSB).

Jingdong Hua, vice-president of the ISSB, will also be invited as a panelist to take stock of the progress of his organization, created in 2021 during the Glasgow COP26 and responsible for developing an international framework of sustainable development standards.

The final versions of the first two criteria will be unveiled in June, he warns.

Harmonize disclosure reports

“It has become urgent to converge all the norms and standards into a single language of sustainability to make markets transparent, accountable and more efficient,” said Mr. Hua in an interview with the Duty.

Over the past 20 to 30 years, with the growing interest in environmental, social and governance (ESG) criteria, voluntary disclosure standards have multiplied, he recalls.

“Anecdotally, the head of sustainability goals for a large North American company once told me that because they have international operations, they now have to report on several hundred different reporting requirements,” says Hua.

By harmonizing the standards, the ISSB wants to simplify the disclosure of companies, while helping to avoid confusion among investors.

“More than twenty years ago, each country had different accounting standards, so an investor looking at reports from two companies — say one in Brazil, the other in India — couldn’t know if he was comparing apples with apples. It is for this reason that the International Accounting Standards Board was born, which created a standardized language that is now used in more than 140 countries. And it is from this approach that we draw inspiration today to harmonize sustainability standards,” sums up Mr. Hua.

For the time being, the harmonized standards will be applied on a voluntary basis. “Each country has its own schedule. But we encourage those who are ready to make the standards mandatory to do so, and we hope that Canada will be one of the first to make this choice,” said Mr. Hua.

By the end of June, in parallel with the publication of the first ISSB standards, an “operational” Canadian Sustainability Standards Board (CSSB) should be created, also warns Lisa French, vice-president of the organization of Financial Reporting and Assurance Standards Canada (NIFC).

The CSSB will be used to support the adoption of ISSB standards in Canada.

Mark Carney, former number one at the Bank of Canada and now co-chair of the Glasgow Financial Alliance for Net Zero (GFANZ), will also be present as a panelist.