Mobilizing Finance for Sustainable Growth, a Discussion with Tiff Macklem
On October 10, 2019, over 100 of Vancouver’s financial services professionals and sustainability leaders gathered to listen to Tiff Macklem, Chair of the Expert Panel on Sustainable Finance, appointed by the federal government at the Fairmont Hotel Vancouver. The event was organized by AdvantageBC, a non-profit society with a mandate to promote international business in British Columbia.
The Panel issued its final report on Sustainable Finance, Mobilizing Finance for Sustainable Growth, earlier this year.
This report is about mobilizing financial services to deliver the investment, ingenuity and influence needed to realize Canada’s leadership opportunity and secure a sustainable economic future.
A lot of the recommendations in the report discuss what we need to do to bring sustainable finance to scale and how we can determine the particular products in the marketplace that would be relevant to Canada given the structure of our economy.
If you go through the recommendations in the report, the Provinces could do many of them individually, as opposed to Federally. However, it would be better if we could do this all together as a country to create a bigger, more sustainable market for companies. The reality is that it would be challenging, as the Provinces are each very different places when it comes to climate action.
There is an opportunity for BC to work with the Federal government and take a leadership role when it comes to sustainable finance.
“The bottom line is there are some areas where our country is doing reasonably well, and there are some areas where we are not. If you look at investments in renewables as a proportion to GDP, we are very much on the low end and if you look at the carbon intensity of a lot of our financial products it’s quite high. If you look at Canadian ETFs, Canadian mutual funds, and you look at their carbon intensity, it would be at the high end,” explained Macklem.
“We need to accelerate savings to sustainable investments and the financial services industry has a very important role to play in helping businesses and households mitigate climate risks. Given the scale of the investment that needs to take place to transition to cleaner growth, sustainable finance really needs to go mainstream."
"We are hoping that 5-10 years from now, we don’t even talk about sustainable finance, we just talk about finance and that it is sustainable.”
Consumers are increasingly looking for services and products with a smaller environmental footprint. Climate-smart innovations are no longer marginal alternatives - they are becoming a massive global market opportunity yielding quality jobs. With these shifts, sound environmental stewardship is increasingly intersecting with market access and becoming a critical source of sustained competitive advantage.
RE Royalties was particularly interested in the panel’s recommendations as a company that has become an important source of capital for renewable energy projects.
RE Royalties is a publicly traded company on the TSX Venture Exchange under the symbol "RE". This public listing allows retail investors to purchase RE Royalties shares and participate in the large and growing renewable energy market. An investment in RE Royalties provides shareholders with strong capital returns, growth and a stable distribution, all while helping reduce global greenhouse gas emissions.
The projects that RE Royalties invest in are helping to solve the world’s climate issues and create a more sustainable economy. RE Royalties helps their clients by taking a unique approach with the royalty-financing model to fill a gap in the renewable energy finance market.
Finance is not going to solve climate change, but it has a critical role to play in supporting the real economy through the transition.
As the Expert Panel on Sustainable Finance report explains, the emerging field of ‘sustainable finance’ is focused squarely on channeling financial sector expertise, ingenuity and influence towards the challenges and opportunities posed by climate change.
The potential for sustainable finance to accelerate transition and help households and businesses manage new climate risks is already well recognized by a number of Canada’s international peers, including the European Union, the United Kingdom and China. Major financial centers in these countries are beginning to implement the recommendations of their sustainable finance task forces, with ambitions to become global hubs in this market.
Canada has the means and the opportunity to stand among these global leaders as a decision-maker rather than a decision-taker in the global market for sustainable products, services and investments.
RE Royalties own a portfolio of 63 royalties from solar, wind and hydro projects in Canada, the USA and the EU. These projects directly remove 255,000 tonnes of carbon annually from the electricity grid, and provide clean electricity to 113,000 homes globally. The financing solutions provided by RE Royalties also allow their clients to indirectly unlock and recycle capital from existing projects, in order to invest in and grow their other project opportunities.
The royalty financing business model is an established and proven form of investment in other industry sectors such as mining, oil & gas, pharmaceuticals, technology, entertainment, and food services. RE Royalties is a pioneer and is the first to apply this proven business model to the renewable energy sector.
If you are interested in investing with RE Royalties, you can find them on the TSX Venture Exchange under the symbol "RE".