Developments in Transition Finance

Published July 31, 2020 | 32 min watch

Sarah Thompson, Director, Sustainable Finance, RBC Capital Markets moderated a session at RBC Capital Markets Sustainable Debt Conference with panelists Alec Cheng, Vice President, Treasurer, Ontario Power Generation, Yo Takatsuki, Head of ESG Research & Active Ownership, AXA Investment Managers, and Brian Minns, Vice President, Sustainable Investing, Addenda Capital. The session focused on what transition finance is, why it's important to their organizations, and what some of the key considerations are for issuers and investors alike.

Initiatives Helping to Define and Develop Transition-Linked Products and Markets

  • The European Union's Taxonomy for Sustainable Activities
  • The International Capital Market Association’s (ICMA) Climate Transition Finance Working Group
  • The Canadian Technical Committee on Transition and Sustainable Finance

Key Takeaways from the Session:

  • To achieve global climate change goals, investors need to go beyond focusing on expanding investment in green assets and reducing investment in carbon intensive assets.
  • Investors should also look at investment opportunities to facilitate progress along decarbonisation pathways across all sectors and companies.
  • By helping to bridge the gap between brown and green, the transition finance market can encourage issuers that are transitioning to more sustainable business outcomes by potentially extending some of the same benefits that have typically been available in the green bond market.
  • While it is too early to determine the long-term implications of the COVID-19 pandemic on transition finance, it appears to be no less of a priority and there is a growing group of investors, corporates and governments calling for a green recovery.

Watch the full video to hear more about panelist’s views on transition finance, why it is important to their organizations and more.

Sustainable Finance