The sun is setting on Investors for Paris Compliance (I4PC).
The climate finance advocacy group, which spent the past five years holding Canadian financial institutions and corporations accountable for their net-zero pledges, recently announced in its final report that it’s disbanding because its shareholder proposals, reports, regulatory complaints and targeted engagement with CEOs and institutional investors have had limited impact.
I4PC is now passing the torch to financial regulators and institutions, calling on them to implement — and enforce — more concrete climate policies to spur greater action.
“We learned a lot, we got some wins, and we’re frustrated with incrementalism and the limits of climate shareholder advocacy,” said Kyra Bell-Pasht, director of research and policy with I4PC in Toronto, in a recent interview.
“If other folks don’t step up, it feels like we’re at risk of losing a lot of the gains that we have made.”
The group was funded through philanthropic grants from major Canadian charitable foundations including the McConnell Foundation and Trottier Family Foundation.
‘Incremental’ gains
The group — named after a legally binding international treaty on climate change signed in Paris a decade ago — listed some of the gains it made over its five-year run in its final report.
For example, I4PC said it was able to influence RBC to replace its broad “sustainable finance” label with more specific language around renewables and encourage Sun Life to begin examining links between climate events and health insurance claims. Through sustained engagement, it said it was also able to persuade National Bank of Canada to make a $20-billion renewables financing commitment.
Meanwhile, shareholder support for I4PC climate proposals consistently reached 20–25%, with occasionally higher votes, which the group said is a sign that “a meaningful minority of investors is willing to support stronger climate action.”
Still, Bell-Pasht said investor pressure has only achieved so much and that there’s more work to be done to address climate risks across Canada’s financial system.
“Throughout our existence, we’ve regularly stopped and assessed whether our work is making meaningful difference and is helping drive change in a productive way towards helping to shift capital away from climate risks and into climate solutions,” she said.
“And over the past year and a bit, we’ve been seeing the frailty of voluntary net-zero commitments in the financial sector, and the limits of climate shareholder advocacy. It’s not that it isn’t driving some change — the change is incremental.”
A pullback in commitments
The group’s shutdown comes at a time when addressing climate risks has fallen down the priority lists of many Canadian financial institutions, corporations and securities regulators as they look to navigate economic uncertainty spurred by the ongoing trade war and energy supply shortages stemming from the U.S.-Israeli war on Iran. Political and cultural backlash against ESG measures has also led to corporate silencing on climate issues, also known as greenwashing.
Last April, the Canadian Securities Administrators announced it would pause its work on new rules to mandate climate disclosures, citing a need “to make Canadian markets more competitive, efficient and resilient.” There’s been no word since about when this work might resume.
There has also been a pullback in net-zero commitments from Canada’s major banks and institutions, including Royal Bank of Canada, Scotiabank and the Canada Pension Plan Investment Board, which have cited several factors including regulatory changes, government policy, geopolitical developments and energy demand as reasons for abandoning their interim or long-term carbon emission reduction targets. Canada’s big banks also withdrew from the Net-Zero Banking Alliance launched by Prime Minister Mark Carney in January 2021, with the global UN-backed banking group later disbanding altogether.
As for the voluntary net-zero commitments still in place, Bell-Pasht said there’s a lack of credible transition strategies from financial institutions and corporations that will allow for a transition away from fossil fuels.
“Yes, they’re high-level commitments, but how are the companies going to change the way they do business to actually decarbonize their portfolios and their funding and underwriting businesses?” she said.
“We still haven’t achieved that level of detail, and in fact we’re seeing … a pullback rather than a strengthening and credibility to these commitments.”
As I4PC stressed in its report, ignoring climate risks comes at a steep cost. It noted that the insurance industry paid out a record $9 billion for extreme weather losses in 2024, pushing up insurance premiums and reducing coverage availability for some homes. And it warned that other sectors that ignore or are unprepared for climate risks are likely to feel similar financial pain.
The group’s final plea
Fundamentally, what Bell-Pasht said I4PC would like to see is “continued investment in ongoing fossil fuel reduction” to ensure that Canada meets the goals set out in the 2015 Paris Agreement. The global treaty’s overarching goal is to limit the increase in the global average temperature to well below 2 C above pre-industrial levels.
To achieve this, the group is calling for regulatory action that “goes beyond disclosure to reshape behaviour.” Namely, it recommends adjusting capital requirements and risk weights, enforcing credible transition plans and applying existing rules on accounting, auditing and market conduct.
It’s also calling for laws that assign liability for damages related to severe weather, alongside “cost recovery approaches that shift the growing burden of physical risk back onto major emitters.”
“The tools to act already exist. What has been missing is the will to use them,” the report said.
After testing the limits of voluntary action, Bell-Pasht said the group of climate activists behind I4PC will look for other ways to support Canada’s energy transition.
“We’ve learned a lot from our experience, we’ve engaged with many intelligent people across the financial industry trying to tackle this problem, and we’re going to move forward and continue to drive change in different ways,” she said.