Good afternoon, Chair and members.

My name is Barb Zvan. I am, as noted, the president and CEO of the University Pension Plan. I was also a member of the Sustainable Finance Action Council and the chair of the taxonomy technical expert group. In addition, I was one of the members of the expert panel on sustainable finance. As a representative of the finance community, I'm here to talk about the important link between the economy, sustainable finance and the environment.

The Canadian economy is not faring as well as we'd like. In March, the Bank of Canada's deputy governor said it was time to “break the glass” on productivity, warning us that Canada's lagging productivity had reached an emergency level. Against this economic backdrop, the effects of climate change are undeniably upon us. The last 12 months have been the hottest in recorded history. Last winter was 5.2°C warmer than historic norms, and 2023 marked our worst wildfire season.

The economic toll of climate change on Canada's GDP, exports and job losses is foreseeable. The global predictions released a few weeks ago are even more staggering. The 2022 federal budget estimated that Canada needs an additional $115 billion annually to meet our net-zero commitments. This is an unprecedented investment opportunity that cannot be met by public funding.

Being low carbon is a driver of competitiveness, and Canada is well placed to leverage its expertise in the area of critical minerals, clean energy and green transportation. The market is poised to grow, as evidenced by the rapid growth in the green bond market and in green exports. Canada's low-carbon exports grew by 9.4% between 2012 and 2023, outperforming the rate of growth of all other exports combined.

To benefit from market opportunities that support Canada's net-zero goals, we need to unlock private sector investment potential and bolster the attractiveness of Canada as a net-zero-aligned investment destination. What is holding us back? While there may be a myriad of reasons, let me focus on my area of expertise, which is investments.

When making long-term investments, Canadian and global investors alike look for as much certainty as possible by way of credible information, proactive disclosures aligned with global standards, and confidence that the projects and assets we're investing in will reduce carbon emissions in line with domestic and global commitments. Investors are looking for policy certainty around Canada's net-zero transition priorities and for the right building blocks for mainstream sustainable finance in support of net-zero goals.

In 2018, the expert panel on sustainable finance examined ways to scale and align sustainable finance with Canada's climate and economic goals. We identified the importance of a taxonomy and disclosures as critical building blocks for mainstream sustainable finance and for building market confidence. The recommendations we issued in 2019 included establishing the Sustainable Finance Action Council, or SFAC, to bring together stakeholders to develop Canada's taxonomy.

The SFAC, which included significant representation from Canada's financial industry and regulators, provided its report in September 2022. We included a framework for a made-in-Canada green and transition taxonomy that is aligned with our net-zero goals and economy and is in step with international expectations and other taxonomies. We also provided proposed elements of a good governance model to get this off the ground.

What is a taxonomy? A taxonomy is a classification system. It will help channel capital toward projects that are classified as green and, importantly and uniquely to Canada, will transition projects that will help companies reduce their carbon footprints in a stepwise way. The playbook for this already exists. Globally, there are more than 40 taxonomies already in place or under development. Each is customized to a specific country or region in order to link global capital markets with their respective net-zero pathways. Most G7 countries, many OECD countries, several resource-based economies, including Australia, and many developing countries have taxonomies. Kenya just published their draft taxonomy.

A taxonomy together with climate disclosure standards being developed by the International Sustainability Standards Board, which represents over 164 jurisdictions, would foster investor confidence, support the growth of Canada's sustainable finance market and create an overall more attractive investment climate. This will, in turn, attract funding for Canada's clean-tech sector, provide capex for operating companies' net-zero plans, grow our economy, generate good jobs and catalyze productivity growth.

We have studied this issue extensively. The expert panel and the Sustainable Finance Action Council recommendations were presented in 2019 and 2022, respectively. In the years that have passed, dozens of countries and regions have leapfrogged us, even levering our work.

Businesses and investors are prepared to invest now. I urge you to put the building blocks in place needed for Canada to be in the running to attract some of this investment to fund our transition.

Thank you for your time and interest. I look forward to your questions.