Environment committee  Climate change risk has significant financial risk, be it transition or physical, for the financial sector. If the Canadian system does not adjust and falls behind other economies in adjusting to this transition risk, we could certainly see significant financial costs associated with that.

Environment committee  It's a great question. We don't recommend that they stop financing immediately. We simply recommend that they align their phase-out, as many banks are doing, with science-based pathways.

Environment committee  Yes, absolutely. In general, within the financial sector, we see less direct lobbying by financial institutions. What I mean by that is that they are not, themselves interacting as much with policy. Rather, they seem to rely on industry associations, more and more, to do this on their behalf.

Environment committee  This is a particularly relevant question in Canada. Based on our report, the figures I cited show that Canadian banks' exposure to fossil fuels in their lending activities is so much higher than in many of the other economies that we analyzed. Obviously, Canada has a significant fossil fuel sector.

Environment committee  My advice would be for increased transparency and disclosure around lobbying in general, connections to industry associations and alignment with positions.

Environment committee  Sure. I said that in terms of looking at the actual financing activities—truly, the lending and investment activities of the banks—no, we are not seeing the level of climate ambition we would expect, compared with their own top-line commitments. They're really underperforming compared with international counterparts who have set similar commitments.

Environment committee  There's a transparency question here. Certainly, having increased transparency within the economy on the corporate side can aid in driving green and transition financing. However, there also seems to be traditional or continued action by the banks regarding their existing relationships with problematic industries and financing polluting companies.

Environment committee  That's a great question and obviously a critical one for governments. I'll preface this by saying that our expertise is mainly on the financial research side. I'm not as much a policy expert. However, based on what we're seeing globally, obviously transition plans are key and governments can play a critical role in helping guide the financial sector—which includes banks—in aligning their financing with net zero and, as such, facilitate that activity in the real economy.

Environment committee  Sure. Thank you. We've seen some level of integration of climate factors into the banks' disclosure and their top-line processes. This is in parallel with these top-line net-zero commitments that they've set. However, this seems to be relatively limited to setting high-level board and management oversight and disclosing some risk management practices.

Environment committee  Good afternoon, and thank you for the opportunity to address the committee. I'm the program manager for financial research at InfluenceMap, which is a global climate-change think tank conducting research into how corporations and financial institutions are affecting climate change.