Finance  -  November 30, 2020

Canadian survey finds increased focus on green financing

A new survey conducted in Canada found that 98% of issuers and investors are already factoring sustainable investing into their financial activities.

The HSBC Sustainable Financing and Investing Survey polled 182 Canadian companies in September and found that over 80% of issuers haven’t encountered any obstacles to green and sustainable investing, while only 14% are specifically focused on the transition to lower emissions. Investors tend to be more cautious, with 48% reporting obstacles like lengthy funding commitments and a third reporting that sustainability is not factored into their decision-making at all. However, nearly 60% intend to start factoring it in, while 59% of issuers say that investing in Canada’s green and sustainable economy is currently a priority.

Another key trend identified was the consensus among issuers and investors on opportunities in infrastructure investment, such as energy-efficient buildings, sustainable public transport and renewable energy sources, and the divide that forms when discussing opportunities in clean power technology. For example, solar power is the top investment opportunity among issuers but ranks at the bottom among investors, while the opposite is true for hydrogen power.

“Sustainability is increasingly reflected in Canada’s capital markets, with environmental questions in particular now a core element in their thinking about financing and investing,” Dan Leslie, Senior Vice President and Deputy Head of Commercial Banking for HSBC Bank Canada, said in a statement. “Most interesting, however, is the difference in challenges faced by issuers and investors. A lack of consistent regulatory environment, inconsistent disclosures and insufficient communications about investment opportunities are most often-cited as barriers for investors in sustainability initiatives.”

Both issuers and investors emphasized a need for guidance on sustainability considerations, particularly on marketing their sustainability initiatives and learning more about financial products like social bonds and green deposits.