Montréal, North American leader in sustainable finance
Montréal is a leading financial centre with more than 110,000 jobs and 3,000 companies in the industry, and known as a hotbed for sustainable finance in North America. In fact, the city ranks No. 1 in Canada and 3rd in North America among the 78 financial centres that were considered in the Global Green Finance Index 7 (GGFI 7) ranking.
Top 10 North American financial centres in the GGFI 7
1. San Francisco
2. Los Angeles
4. Washington, D.C.
8. New York City
A responsible and collaborative financial ecosystem
Montréal owes its reputation as a prime sustainable finance city to the bold actions taken by various actors in the finance sector in reducing greenhouse gas (GHG) emissions. First, Québec’s financial cluster Finance Montréal and its members were quite involved in these efforts through the Finance and Sustainability Initiative (FSI). They are focused on environmental, social and governance (ESG) issues, while trying to maximize the return on investment. To further mobilize the various stakeholders, Finance Montréal held its first Sustainable Finance Summit in October 2021.
Financial institutions based in Montréal were the first to adopt best practices inspired by the United Nations Sustainable Development Goals (SDGs) and the Paris Agreement. Moreover, Montréal is a member of the FC4S (Financial Centres for Sustainability) Network – part of the UN Environment Programme (UNEP). With this commitment, supported by the Principles for Responsible Investment (PRI), the city was a pioneer in decarbonizing investment portfolios in North America and a springboard for the Task Force on Climate-related Financial Disclosure (TCFD).
The most important asset managers based in Québec, such as the Caisse de dépôt et placement du Québec (CDPQ), Fonds de solidarité FTQ, Fondaction and PSP Investments, are among the key signatories to the Principles for Responsible Investment in Canada and helped foster an engaged and collaborative ESG ecosystem.
Also note that, since 2017, the CDPQ adopted a climate strategy for fund management and is world renowned for its ambitious initiatives in this area. The 2021 strategy update calls for a 60% reduction in the carbon intensity of its portfolio by 2030, and to complete its exit from oil production by the end of 2022.
Courageous policies to reduce GHG emissions
Montréal lives the values of sustainable development to the fullest and earns a reputation for its ambitious actions fostering a green transition. Its Climate Plan 2020–2030 aims to reduce GHG emissions on its territory by 55% by 2030. The City also plans to have its operations become carbon neutral by 2040 and for the Montréal community to be carbon neutral in 2050, as per the One Planet Charter. Montréal has also committed to international networks such as Cities Climate Leadership (C40), Global Covenant of Mayors for Climate & Energy (GCoM) and Local Governments for Sustainability (ICLEI).
Moreover, the Government of Québec also adopted its own 2030 Plan for a Green Economy with the aim of reducing GHG emissions by 37.5% from their 1990 levels by 2030, and to reach carbon neutrality by 2050. Note that the province already has one of the lowest GHG emission rates per capita in North America due to, among others, its hydropower production, a reliable, renewable and affordable energy source. Québec also shares the only carbon trading program in North America with California, since 2013. Québec Premier François Legault will also be attending the UN Climate Change Conference (COP 26) to strengthen its commitment in the fight against climate change.
About the Global Green Finance Index ranking
The seventh edition of the Global Green Finance Index (GGFI 7), published on April 29, 2021 by Long Finance, provides evaluations of the depth and quality of the green finance offerings of 78 major financial centres around the world. The GGFI serves as a valuable reference for policy and investment decision-makers.
The goal of this annual ranking, which started in 2018, is to encourage financial centres to adopt best practices in investment management. The ranking is based on surveys among financial players (4,536 assessments from 739 respondents) and evaluates 140 factors related to the sustainable development of each financial centre.
For more details about the ranking, refer to the Long Finance website.
Note: Sustainable finance refers to financial activities that have a positive, long-term impact on the environment and society (sustainable development). The most critical metric is GHG emission reduction.