Global vaccine justice seen as a test of climate justice at G7 meetings in June 2021

G7 finance ministers and the global financial elite issued an important Communique  on June 5, and while the mainstream media (and Finance Canada’s own press release ) focused mainly on a 15% minimum global tax rate for corporations, the Communique made ambitious statements regarding international climate finance too, with calls which seem to acknowledge the importance and inequity of climate risk to the global financial order. “G7 Ministers Recommit to Climate Finance, Leave Details for Later” in The Energy Mix summarizes the general reaction that the Communique is too vague and “unambitious”. The article states that the scale of global climate investment (both public and private) is estimated at $100 billion per year, and that Canada’s fair share would be US$4 billion per year.

The issue of global climate finance is seen as crucial to the success of the upcoming G7 meetings of world leaders in the U.K. on June 11-13. “As leaders gather for G-7, a key question: Will rich countries help poor ones grapple with climate change?” in The Washington Post (June 7) describes how global climate finance and the issue of global vaccine disparity are being conflated, for example in a quote from a senior advisor to Climate Action Network International:  “The G-7 meeting will be a test for international solidarity. This implies solidarity on both ensuring equitable and rapid access to vaccines globally, as well as on finance and support for the climate crisis”.  “World Climate Deal Could Fail unless G7 Solves Vaccine Disparities” (June 8, The Energy Mix)  quotes the head of the international Chamber of Commerce: “We can’t have global solidarity and trust around tackling climate change if we do not show solidarity around vaccines.”   The Guardian writes: “Share vaccines or the climate deal will fail rich countries are told” (June 5) – which points out that “Canada has the highest number of procured doses per head, with a total of 381 million procured vaccine doses for a population of just over 37 million.”  – and contrasts Canada with the low vaccine availability in such countries as Columbia, Indonesia, South Africa, and Pakistan.

Climate Change is one of the priorities of the G7 meetings. Reports released in anticipation of the G7 meeting include:

Ranking G7 Green Recovery Plans and Jobs  published by the U.K.’s Trades Union Congress, which shows that the U.S. had the highest level of green jobs and recovery investment per person, followed by Italy and then Canada. The U.K. ranks sixth, with Japan 7th.  The report critiques specific U.K. policies and makes recommendations for improvements.

Oxfam International posted analysis on June 7 which estimates that the economies of G7 nations contracted by about 4.2 per cent on average in the pandemic, and compares that to the greater economic impacts which will result from extreme weather, the effects on agricultural productivity, and heat stress and health.  The report includes estimates of GDP losses by 2050, assuming 2.6°C of warming, using the modelling of the Swiss Re Insurance Economics of Climate Change Index , and predicts the worst affected countries will be  India, Australia, South Africa, South Korea, The Phillipines (with a 35% loss of GDP), and Columbia. Canada’s GDP loss is estimated at 6.9%.  The report is summarized in  “Covid shrunk the economy but climate change will be much worse” (The Guardian, reposted in The National Observer, June 8) and also in  “Climate inaction will cost G7 countries ‘billions’” in  Deutsche Welle .

The official G7 Ministers meeting website is here and will post official documents/news.  The Resist G7 Coalition will present different information, and aims to coordinate protests on their Facebook page and their website.  A Reuters article states that police will number 6,500, and Extinction Rebellion alone estimates 1,000 protestors will be present. 

New report recommends mandatory financial disclosure of climate-related risks for Canadian companies

iisdleveraging-sustainable-financeThough written mainly for a financial audience, a new report from the International Institute for Sustainable Development (IISD) is relevant to the livelihoods and pensions of all Canadians.  Leveraging Sustainable Finance Leadership in Canada: Opportunities to align financial policies to support clean growth and a sustainable Canadian economy was released on January 16,  examining and making  recommendations for Canadian companies to disclose climate change risks to their shareholders and to the public. A press release summarizes the report.  Why is it so important?  It concludes with an analysis of financial disclosure in the oil and gas industry, (found in Annex E), and this warning about the dangers to us all of stranded assets: “When these emissions are counted via proved and probable reserves, as disclosed by Canadian oil and gas companies, a picture emerges of significant, undisclosed—and therefore unaddressed—risks to Canadian companies, financial institutions, pension beneficiaries and savers…. Once the implications of the Paris Agreement are fully priced into the market, oil and gas asset valuations will shift. If this change is sufficiently large, debt covenants may be triggered in companies. This will in turn impact financial institutions, including banks, insurance companies and pension funds. Debt downgrading could ensue, and bank capitalization thresholds could be impacted.” (And a related risk for oil and gas companies:  in December 2018, the Canadian Shareholders Association for Research and Education (SHARE) joined an international campaign for improved disclosure by oil and gas companies of the water-related risks of their operations ).

What is to be done?  Canada’s transition to a lower carbon economy requires private investment capital, and Canada’s financial markets cannot operate in isolation.  Canada has a lot of regulatory “catching up” to do regarding climate risk, (outlined in “Data Gap” in Corporate Knights magazine in May 2018) , and  evidenced by the examples given throughout the report of current practice amongst  European Union , G7 and G20 countries. The report shows the state of  Canadian regulation, with  frequent reference to the two major Canadian studies to date on the issue:  the Interim Report of the government-appointed Expert Panel on Sustainable Finance (Oct. 2018), and the Canadian Securities Association Staff Notice 51-354 (April 2018).  In Leveraging Sustainable Finance Leadership in Canada, author Celine Bak, sets out a three-year policy roadmap for Canada, calling for Canadian laws and statutes to be updated to require mandatory disclosure of climate risk by 2021. The report also calls for the Toronto Stock Exchange to  join the UN Sustainable Stock Exchanges Initiative, and that the the Canada Pension Plan Investment Board  be required to report on the climate change risks which might affect its fully-funded status.  Detailed and concise summaries are provided in the Annexes, titled:  “An Overview of the Key Reports on Corporate and Financial Sector Climate- and Environment-Related Disclosure”; “G20 and G7 Precedents for Implementation of TCFD Recommendations in Canada”; and  “Analysis of EU Sustainable Finance Proposed Actions, EU Laws and Canadian Equivalents”.

Expect more discussion and publications about sustainable finance issues, as Canada’s Expert Panel  concludes its public consultations at the end of January 2019, and releases its final report later in the year.  The European Union Technical Expert group on Sustainable Finance (TEG) is also expected to report in June 2019,  and the international  Task Force on Climate-Related Financial Disclosures Task Force will publish a Status Report in June 2019,  updating its first report,  published in September 2018, with analysis of disclosures made in 2018 financial reports .