Bill S-243 would make banks accountable to Canada’s climate targets – here’s how you can support it

One of the highlights of January’s Roundtable was our afternoon panel covering Policy Opportunities for Climate Action. We welcomed four engaged panelists to share their latest work and priorities. One particular piece of legislation that came up frequently during the session was Bill S-243, the Climate-Aligned Finance Act (or CAFA) introduced by independent Senator Rosa Galvez last spring. 

During his panel section on climate finance, Shift Director Adam Scott called CAFA the “gold standard for what a good legal framework in Canada could look like to align the financial sector with climate goals.” 

CAFA is a really exciting bill – in short, it would require major banks, crown corporations, and other federally regulated financial institutions to align their own work with Canada’s climate commitments. Those commitments include the Paris Agreement goal to limit the global temperature increase to well below 2°C, and the Net-Zero Emissions Accountability Act’s target to reach net-zero-emissions in Canada by 2050.

As exciting as CAFA is, it should come as no surprise that there are significant obstacles to any bill proposing such bold action. Bill S-243 currently sits at Second Reading in the Senate, with a difficult road ahead to becoming law. So the question is, what can we do to support CAFA? For this newsletter, Climate Legacy connected with Sen. Rosa Galvez’s office to answer that very question, and fortunately, the answer is that we can do quite a lot. 

Canadian banks are still heavily invested in the fossil fuel industry. 

“I think there’s a two-pronged approach,” says Karine Péloffy, Parliamentary and Legal Affairs Advisor with Sen. Galvez’s office. “One is trying to get the bill to advance in its current legislative process.”

Their office has published a guide to the legislative process which recommends reaching out to Senators and MPs to indicate your support. The most relevant legislators are those who sit on committees likely to review the bill, in this case the Senate Standing Committees for Banking, Commerce, and the Economy, or for National Finances. Supporters can send emails, call offices, or request meetings to express their support, just as they could call up their pension fund or bank to ask if their investments align with climate commitments.
You can also email senators with connections to major banks and financial institutions such as Sen. Sarabjit Marwah in Ontario, who is a former executive with Scotiabank. 

The second prong to supporting CAFA is broader than the first – outside of the Senate there are countless ways you can spread the word about CAFA and advocate for it. If your local MP has the opportunity to submit a private members bill this parliament (if your MP is on the top 30 in this list, they may still be able to submit a new bill) you can encourage them to copy and submit their own version of CAFA, which would significantly raise the bill’s profile and create pressure from both houses.

“The bill exists anywhere,” says Péloffy, “Anyone can copy/paste it and introduce it. It can have the same name, there’s no copyright on this.” 

“If they don’t have (the opportunity to submit a new bill) you can just say ‘why isn’t your party adopting a CAFA type bill?’” 

Péloffy and her team recommend a number of other actions that can potentially move the needle, these include: 

  • Contact your pension fund or bank to encourage them to voluntarily abide by CAFA’s terms.
  • Planning a panel or town hall to discuss CAFA with your network.
  • Writing op-eds.
  • Leveraging your network to create a petition in support of the bill.
  • Reaching out to any financial experts in your network to get an endorsement for the bill.

“Even if it’s not yet in law, it’s changing the conversation,” Péloffy says. By raising awareness of CAFA, major banks and financial institutions might consider taking strong voluntary climate actions to prevent a new law from stepping in and forcing their hands. CAFA also closely examines conflicts of interest between financial institutions’ boards and the fossil fuel industry, a pressing issue that many Canadians aren’t aware of. 

Shift report released last May found that 80 different pensions’ senior staff hold or previously held roles with fossil fuel companies, and 2021 research from DeSmog found that globally, banks in Canada had the highest number of ties to extractive industries. 

To combat this, CAFA would put restrictions on financial institutions appointing board members with major conflicts of interest. Additionally, it would require that at least one member of the board must be a person with climate experience. 

Conversations like this are ones we must be having in Canada right now. Although adopting CAFA into law would be the best approach to ensuring financial institutions take meaningful action to align themselves with Canada’s climate targets, the next-best action is to raise awareness of where those organizations are falling short so Canadians are better informed and equipped to take action. 

To learn more about Bill S-243, feel free to read: 

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