Bond and Climate Change: Canada Report 2017

Canada well poised to grow green finance, infrastructure investment, and build a low carbon economy 

What’s it all about?

The Climate Bonds Initiative and Smart Prosperity Institute have just released the 2017 Bonds and Climate Change: Canada Report, the sixth annual stocktake of green bonds and green finance in Canada.

The Canada edition marks specific highlights and emerging trends from the current year, and identifies opportunities for developing the green bond market.

This year, Climate Bonds and Smart Prosperity reports on domestic market activity up to November 10th, 2017.

Download the full report here.

Available in French – Building Engagement

For the first time, we welcome a collaboration with Quebec-based AlphaFixe Capital who have provided the French translation – a key step for increasing engagement with the entire Canadian asset owner, investment manager, and policy-making audience.

Report Highlights

  • Green bond issuance in 2017 has exceeded that of all other years combined (C$3.8bn), but an opportunity for growth remains as demand continues to outstrip supply.
  • Canada ranks 10th in the world as a source of labelled green bond issuance to date, and 5th in unlabelled climate-aligned bond issuance.
  • Provincial entities have spurred issuance, with Ontario and Quebec leading the way in 2017.
  • Other major Canadian issuers include Export Development Canada (EDC), Toronto Dominion (TD) Bank, CoPower, and more recently the City of Ottawa, which issued the first municipal green bond out of Canada.
  • Ambitious climate commitments and policy have been put in place to transition to a low carbon economy. A growing Canadian green bonds market can be instrumental in steering private sector and international capital flows to finance this transition.
  • As a G7, G20 and OECD nation there is an opportunity in Canada for the federal government to demonstrate leadership in green finance by issuing a sovereign green bond, paving the way for others to follow, particularly corporate issuers.
  • Other actions include supporting market standards, exploring the use of tax incentives and facilitating the formation of a broad-based expert group to examine green finance directions.
  • Canadian banks, pension funds, and institutional investors need to play a more active role in developing green financial instruments and the domestic green bond market.

Who’s saying what?

Mike Wilson, Executive Director, Smart Prosperity Institute:

"As Canada continues to ramp up its climate policy ambition, green bonds have the potential to harness much-needed private capital flows to finance the transition to a cleaner, low-carbon economy.”

“In 2017, we've seen the Canadian green bond market gaining momentum, with issuance exceeding that of all previous years combined and new players coming into the market, including the first municipal issuance by the city of Ottawa. With increased leadership by the federal government, 2018 could be an even bigger year for the Canadian green bond market."

Sean Kidney, CEO, Climate Bonds:

“Canada has all the structural financial components and policy attributes to move decisively on green finance, to build a robust domestic green bond market supporting its climate goals and to add further strength to global emission reduction efforts. Provinces, corporates and institutional investors all have a significant role to play.”

“The global size and expertise of Canada’s major pension funds and asset managers sees them well positioned to manage larger capital allocations towards low carbon and green infrastructure investment opportunities in both developed and emerging economies.” 

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