As a community of Canadian asset owners, including family offices, foundations, endowments, universities and pension plans, representing approximately CAD $53 billion in assets, we are deeply concerned about the ecological, societal and economic impacts of climate change.

These preventable impacts are already here in the form of devastating floods, hurricanes, droughts and wildfires. The Insurance Bureau of Canada reports 2024 as the most expensive year on record, paying out CAD$ 8.55 billion due to severe weather events, including the devastating Jasper wildfires. The total economic losses of the Los Angeles wildfires are estimated at USD$ 250 billion. Scientists are clear that global warming beyond 1.5°C risks cascading tipping points, making the worst effects of climate change irreversible for us and future generations.

Many of our organizations have committed to help solve the climate crisis through philanthropic endeavors, collaboration, and investing in climate solutions. Others recognize the importance of climate change because of the risks an unstable climate poses to the ability to deliver long-term sustainable returns, consistent with fiduciary duty to beneficiaries.

Climate risks are systemic financial risks. Financial institutions play a vital role in safeguarding their clients’ long-term savings and investments, including by managing climate risk and capitalizing on the real-economy transition to net zero. We are concerned that recent high-profile withdrawals by banks and asset managers from global climate finance alliances jeopardizes our collective ability to achieve net zero greenhouse gas emissions by 2050 at a time when more leadership is crucial.

As such, we call on our Canadian financial institutions to remain firmly committed to their net zero goals in accordance with global, science-aligned standards and best practices, and to translate these goals into robust action plans.

Participation in initiatives such as the Net Zero Banking Alliance (NZBA) and the Net Zero Asset Manager initiative (NZAM) signals to asset owners a baseline-level of accountability on net zero-aligned climate ambition and risk management, maintains industry momentum, sets and enhances industry standards and fosters peer learning and collaboration. As asset owners we value consistent reporting through these frameworks, which provides transparency and comparability, measures progress and helps to combat greenwashing concerns.

While we are disappointed by recent exits from NZBA and by NZAM pausing, we ask that our financial partners continue to demonstrate adherence to the inherent principles of these frameworks. In particular, we expect:

  1. Commitments
    Banks to continue to commit to transition all operational and attributable GHG emissions from lending and investment portfolios to align with pathways to net zero by 2050 or sooner. Asset managers to work in partnership with asset owner clients to commit to net zero emissions across all assets under management (‘AUM’) by 2050 or sooner and implement engagement, voting and policy advocacy strategies and escalation policies accordingly;
  2. Science-based target-setting
    Banks to continue robust, science-based target-setting for 2030, prioritizing the most GHG-intensive sectors and sectors key to the transition to a net zero real economy. Asset managers to continue setting interim AUM-based net zero targets and update at least every five years until 100% of AUM is included;
  3. Annual standardized reporting on progress
    Banks to continue annual reporting on progress against absolute and/or emission intensity targets with increased coverage and confidence, and progress made against a board-level reviewed transition strategy with proposed actions and climate-related sectoral policies. Asset managers to continue increasing AUM coverage and report on engagement efforts and results.

We believe Paris-aligned financial net zero transition plans are imperative regardless of country-level targets. As such, we need Canadian financial partners to demonstrate ambition beyond meeting regulatory requirements and commit to climate action that drives real-economy impact, in alignment with fiduciary duties and the long-term investment horizons and goals our organizations pursue. The time for courageous leadership is now.

Signatories:

Advantage Capital Strategies Group
Atkinson Foundation
Bâtirente
British Columbia Teachers’ Federation
Canada Post Pension Plan
Catherine Donnelly Foundation
Clearskies Investment Management
CMA Impact Inc.
Coast Funds
Definity Foundation
Echo Foundation
Eclipx Family Office
Foundation of Greater Montréal
Fonds Climat du Grand Montréal
Gosling Foundation
HLB Family Office
Houssian Foundation
Inspirit Foundation
Johansen Larsen Foundation
Laidlaw Foundation
Lester Asset Management – Lynx Global Biodiversity Fund
McConnell Foundation
Ottawa Climate Action Fund
Rally Assets
RE Royalties
Sisters of Mercy Newfoundland
Sitka Foundation
Skagit Environmental Endowment Commission
The Atmospheric Fund
The Halifax Climate Investment, Innovation and Impact (HCi3) Fund
Trottier Family Foundation
United Church of Canada
University of Toronto Asset Management
University of Victoria