Environmental groups challenge federal government's climate-related risk management report

The groups claimed that the report lacked "real structural measures"

Environmental groups challenge federal government's climate-related risk management report

Environmental law charity Ecojustice and other environmental groups have challenged the federal government’s Report on Federal Climate-Related Risk Management, claiming that the report lacked “any real structural measures” indicative of a strong understanding of climate-related financial risks.

“This report is an important first step in the federal government assessing the real risks of climate change on federal institutions, and the billions of taxpayers’ dollars they represent. Unfortunately, this first version of the report falls short on addressing the federal government’s exposure to climate risk,” said Karine Peloffy, Ecojustice’s sustainable finance project lead, in a statement.

Peloffy highlighted the inadequate information in the report, which was published quietly on the Department of Finance’s website.

“The fact that the report was released without fanfare and buried on a website makes one thing clear: the federal government does not have a real plan to address the financial risks posed by climate change. What we have been given is the bare minimum: a superficial set of small measures that do little more than pay lip service to climate risks,” Peloffy said in a statement.

The report had long been requested by Ecojustice and environmental groups. As per section 23 of the Canadian Net-Zero Emissions Accountability Act, the finance minister must collaborate with the environment minister and Climate Change Canada to publish an annual report on the federal public administration’s key measures to tackle climate change-related financial risks and opportunities.

According to Ecojustice, this obligation was met nearly two years later than the rest of the Act; the report was set for release last year but was delayed with no explanation. The organization explained that climate-aligned finance was a critical missing element in Canada’s climate plans.

“At a high-level, the report recognizes that the government needs to take action to reduce risks associated with climate change and that climate change impacts financial asset value. However, in a critical oversight, the report fails to address how the government’s own role in financing fossil fuel supply and expansion is increasing the climate-related risks to the assets the government holds,” Peloffy said.

Peloffy pointed to a joint report by the Bank of Canada and the Office of the Superintendent of Financial Institutions which cautioned that transition risks are crucial due to the country’s endowment of carbon-intensive commodities.

“Make no mistake, climate-fueled disasters are the result of actions taken by the fossil fuel industry, and by governments funding them,” Peloffy said. “What we need is a comprehensive package of measures to align Canada’s public and private finance with our climate commitments, as the Climate-Aligned Finance Act proposed. In this critical moment, failing to plan means planning to fail — and we simply cannot afford to fail.”

Ecojustice operates in Vancouver, Calgary, Toronto, Ottawa and Halifax.