Sustainable finance: The reshaping of capital markets and the new era of corporate reporting

Leading figures in Canada's financial sector weigh in on the rapid rise of sustainable finance and its profound implications for all businesses globally. We're joined by Ivey's Diane-Laure Arjaliès, Michael Jantzi, CEO at Sustainalytics, and Andy Chisholm, Board of Directors, Royal Bank of Canada.

In This Session

Sustainable finance – the incorporation of environmental, social and governance (ESG) factors in investment instruments and decision-making – has now entered the mainstream. In Canada alone, ESG-related assets have now reached $3.2 trillion, representing a growth of 48 per cent since 2018. Larry Fink, CEO of the world’s largest asset manager Blackrock, in his 2020 Letter to CEOs, highlighted that climate change is now a “…defining factor in companies’ long-term prospects.” He predicted that this will lead to a significant reallocation of capital “…sooner than most anticipate.” Understanding these developments and their implications is becoming an urgent imperative for business leaders in all sectors.

These changes will be accelerated by rapid shifts in corporate reporting and disclosure requirements. Driven by the demands of major investors, the five leading sustainability reporting organizations — including the Sustainability Accounting Standards Board (SASB) and the Global Reporting Initiative (GRI) — announced in late 2020 a plan to work together to develop a comprehensive global corporate reporting system. In addition, the International Financial Reporting Standards Foundation, whose financial reporting standards are followed in over 140 jurisdictions, has just concluded a global consultation on establishing a new Sustainability Standards Board to facilitate global sustainability standards. The new perspectives of investors and the emergence of these common reporting standards point toward a future in which businesses compete for capital based substantially on their sustainability performance.

Key Topics

0:08​ Introduction
2:40​ Panelists
3:39​ Why is ESG a big deal for business?
8:40​ The reallocation of capital
10:55​ Sustainable Finance Action Council
13:48​ Is sustainable finance a fad?
20:30​ ESG reporting standards
26:45​ How accurate is our data?
29:55​ Global developments in sustainability
35:28​ Canadian leadership in sustainability
39:15​ Emerging financial instruments
45:22​ Where does Corporate Governance fit?
51:55​ More resources on ESG
55:35​ The Millennial future of sustainability

Additional Resources

Sustainability research, teaching and partnerships at Ivey are led by the Centre for Building Sustainable Value. A profile of our Sustainable Finance program is available here. For more information contact Matthew Lynch (mlynch@ivey.ca).

For regular updates on the Centre’s programs, activities and event, please subscribe to our quarterly newsletter.

The CPA-Ivey Centre for Accounting & the Public Interest also focuses substantially on ESG, accounting and corporate reporting.