Saturday, February 4, 2023

Canada’s strong commitment to zero emissions, though ESG funds fall short

strategy included plans Compulsory sale of ZEV light vehicles (Zero Emission Vehicle – Zero Emission Vehicle), along with other transport electrification measures, such as financing of charging stations and infrastructure and incentives for electric vehicles.

All new cars, SUVs and trucks sold in Canada will be required to be zero-emissions vehicles (ZEVs) by 2035, under proposed new rules announced today by Environment and Climate Change Minister Steven Guilbeault. “Zero-emission vehicles are the solution for cost-conscious Canadians who want to help the environment and get off the roller coaster of high gasoline prices,” he added.

In addition to the 2035 target, Canada has also introduced Series of Provisional Mandates for the Sale of Electric VehiclesWhat is required:

  • Electric vehicles represent 20% of sales of new vehicles 2026 And this 60% in 2030, According to a government statement, these objectives are aimed at contributing to the enhancement of VEZ’s offering to consumers.
  • One Shortage accumulated from greenhouse gas emissions 430 million tonnes between 2026 and 2050
  • Investment in 50,000 charging stations of electric vehicles spare to reach 87,000 chargers financing by the federal government in 2027
  • renewal One by one Program provides consumers and to companies Between $5,000 and $10,000respectively, for the cost of Purchase or rental of an electric vehicle of the ZEV type

In doing so, Canada joins a number of other jurisdictions that have introduced their own ZEV requirements, including the EU, the UK and the US.

For his part, the transport minister declared that helping Canadians switch to zero-emissions vehicles is critical to achieving our climate goals: it keeps our air clean, helps people save money and makes Canada a leader in manufacturing clean vehicles.

ESG investing in Canada

one of the biggest opportunities for the responsible investment sector in Canada, estimated at 3 billion (Anglo trillion) dollars, while concerns about “greenwashing” and increasing regulatory scrutiny slow the growth of the sector.

Outlook 2023 On The Stock Market.

According to a report by the Canadian Responsible Investment Association (RIA) on the state of the industry, responsible investing From an environmental, social and governance (ESG) perspective becoming more and more sophisticated As asset managers use a variety of strategies to deal with risk, from integrating a basket of indicators into buy and sell decisions to focusing on specific themes such as climate, labor inclusion and water conservation.

All of this is happening amid growing controversy resulting from investigations and fines for misleading environmental statements, as well as backlash against ESG efforts in a neighboring country that borders the region.

In the last two years, AUM in ESG investments was reduced from $3.2 trillion to $3 trillion According to a survey conducted by Environics Research. The survey states that the above figure is considered a floor by Registered Investment Advisors (RIA). Rhea covers asset managers, asset owners, pension funds, service providers and others who collectively oversee $42 trillion in assets, According to the report, the shortfall is due to several factors, such as:

  • Changes to reporting methods because the RIA contracted a new company to collect and evaluate the data
  • more careful Responsible Investment and ASG by leading asset management firms in defining asset RIA Executive
How Do The New Trend Force Indicators Work?

report states that ESG integration -In which investors use a comprehensive set of ESG metrics to manage risk- This is the most commonly used strategy, With 94% RIA members versus 89% two years ago. the exclusion is companies or sectors based on their products or business practices, with 91% versus 72%, being The sectors most affected by exclusion policies are arms and military material as well as tobacco, fossil fuels and gambling.

46% of those surveyed manage an impact fund Structured to deliver measurable environmental and social outcomes alongside financial returns.

In terms of business engagement, survey shows RIAs were a force to be reckoned with in 2022 launches climate engagement canadaOne Alliance of organizations pressurizing 40 companies In industries such as energy, utilities, mining, transportation and consumer goods To improve climate-related disclosure and align its advocacy with the goals of the Paris Agreement.

Low ESG Fund Launch

According to the latest Morningstar report, asset managers may lose appetite to launch new ESG funds by the third quarter of 2022, with fewer sustainable fund launches for the second consecutive quarter. According to Abdulai Mohammed, an analyst with Morningstar, “In the past, we have experienced a diverse set of launches from different providers of durable products (both mutual funds and ETCs), but this quarter was different.” Thus, it turns out Only 5 new funds launched domiciled in Canada, who represented A decrease of 60% and 80% compared to the second and first quarters. Only Canada Life, Mackenzie Investments and Manulife launched new permanent investment funds.

Growth of sustainable funds and ETF assets stalled: Equity rose 0.3% Compared to the previous quarter, a Contribution (+1%) from actively managed funds and drag (-2%) from passive strategies. Active strategies represent 86% and passive 14% of the sustainable product landscape. But inflows to funds and ETFs also decreased, although still positive, with some $243 million, a decline of 85% compared to the previous quarter’s $1,680 million. This ticket volume was last recorded in the third quarter of 2020 at approximately $322 million. Active strategies contributed to inflows ($278.2 million), while inflows from passive strategies were negative (negative $34.4 million):

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