Land acknowledgement and welcome

Message from our Lead Sponsor: Manulife Investment Management

Session Chair: Heather Hachigian, Royal Roads University

Paper A: Corporate Governance, Sustainable Ethics and Financial Stability: Lessons from Developing Economies

Daniel Ofori-Sasu, George A. Donkor, Joshua Y. Abor

Abstract: Sustainable banking involves carrying out banking operations and business activities with conscious consideration for the environment as well as the social impacts of these activities. Sustainable banking incorporate environmental, social and governance (ESG) considerations in the delivery of banking services. The benefits of sustainable banking, which range from improved reputation to improved investor confidence, have caused banks to shift from just managing their environmental and social risk to proactively exploring new opportunities offered by sustainability principles, while employing these to differentiate themselves in the market. This paper examines sustainable banking in developing markets. It covers sustainable banking and its importance. It discusses the triple bottom line, and sustainable and responsible investment of banks. The paper also examines sustainable banking principles and policies in Africa, the practice of sustainable banking in Africa, and sustainable banking as a driver of growth. The paper concludes with important policy implications.

Paper B: SRI Funds and Their True Nature  

Meyers, S. M., Ferrero, I. F., and Muñoz-Torres, M. J.

Abstract: The growth of SRI funds from niche to mainstream has not been exempt doubts. The launch of new SRI funds and the repurposing of funds “greening” their names has been accompanied by concerns and references in the financial news around potential “greenwashing” cases in SRI funds. Are SRI funds conventional funds in disguise? The results from previous literature on the topic are mixed. The paper aims to test if SRI funds are true and consistent with their nature. We test if portfolio holdings of SRI funds exhibit higher ESG scores than their conventional counterparts from the same Fund Management  company.  Our paper adds  to  previous  literature,  as  up  to  our knowledge, is the first paper to perform an ESG fund score analysis addressing the topic if “self-declared” SRI funds are true to their nature through a matched pair approach and with a multi-regional focus.

Dean Dana Brown, Sprott School of Business, Carleton University

Cathy Clark, Duke University, USA

Moderator: Karim Harji

Session Chair: Grace Adams, Sprott School of Business, Carleton University

Paper A: Valuing the Impact of Affordable Housing in Ontario

Brierley, T. and Geobey, S

Abstract: Ontario is facing an affordable housing crisis. As of 2016, 12.7% of Canadian households were in core housing need. This issue is especially prominent in Ontario as 15.3% households were in core housing need, with 75% being attributed exclusively to a lack of affordability (Gov’t of Ontario, 2020). Much of the shortage is attributed to an insufficient supply. The project is part of a multi-stakeholder initiative to create an assessment framework to value affordable housing projects, grounded in academic theory and practice. The purpose of this research project is to identify social, environmental, and indirect economic contributions of affordable housing projects. Further, it seeks to understand which contributions are cost-effective to monitor and exploring how these can be employed to better understand the value of affordable housing. These learnings are then deployed to develop a methodology for estimating the social return of affordable housing projects.
The framework will employ the Common Approach to Impact Measurement (CAIM) standard, a 5-step process for impact measurement used by impact investors, social enterprises in Ontario, and supported by the Canadian Social Finance Fund. The study uses a mixed methods design including a structured content analysis of existing literature, semi-structured interviews with professionals, a stakeholder questionnaire to determine weighting of indicators, and stakeholder verification of the final framework. 
The assessment framework is intended for use by organizations to evaluate their affordable housing projects, efficiently allocate funding, and advocate for additional funding. The framework will help give organizations the ability to economically measure the social impact of projects to encourage increased investment and more holistic planning. The project intends to contribute to existing literature in the areas of affordable housing valuation, social finance, and impact measurement. 

Paper B: Identifying greenhouse gas emissions throughout the supply chain using the life cycle approach and the challenges of reflecting them in accounting and financial indicators.

Ghozlani, K. and Kumar, V.

Abstract: 2020 UN Financing Sustainable Development Report identified growing interests in sustainable finance that need to be nurtured. In this paper we analyse some of the challenges associated with capturing financial attributes that reflect the sustainability of underlying economic activities. 
Particularly, we consider greenhouse gas (GHG) emissions throughout the value chain of an actor and along the supply chain of a whole industry sector. We use supply chain methodologies such as Life Cycle Analysis to identify GHG emissions and associated leakages (i.e. material GHG emissions unaccounted for). These leakages often occur at the interface between successive layers of suppliers of an industry sector and might not be captured in its financial indicators.
Therefore, by identifying and accounting for carbon leakages of an industry, we present its true GHG footprint and quantify better the abatement of GHG if renewable energies are used instead.  This is important for sustainable finance for 3 reasons. 1- Various carbon pricing mechanisms use the value of the GHG abatement to price emissions, 2- End-customers are better informed when procuring products or services based on the total footprint of that industry and 3- Shareholders and stakeholders can exercise better judgements when considering an industry sector in its entirety.

Session Chair: D’Arcy O’Farrell, Sprott School of Business, Carleton University

Paper A: Assessing companies’ practices on decent work: an analysis of ESG rating methodologies

Louche, C., Delautre, G., and Balvedi Pimentel, G.

Abstract: ESG rating agencies  have  become  a  central  actor  in  providing  information  and  assessing companies on social environmental and governance (ESG) dimensions. Although research has explored the construction of ESG metrics, little is known about how agencies evaluate decent work. Building on the analysis of six ESG agencies, this paper investigates how these actors measure and assess companies on decent work-related items and identifies the challenges they face in this endeavour. The underlying question of the paper is to better understand the capacity of responsible investment and ESG screening in promoting and improving decent work.

Paper B: Catalyzing the growth of green bonds: A closer look at the drivers and barriers of this sustainable finance market in Canada

Saravade, V. and Weber, O.

Abstract Being the popular face of sustainable finance around the world, the green bond market provides the perfect opportunity to examine how the financial sector is reacting to the opportunities and risks posed by the shift towards the low-carbon climate resilient (LCR) economy. Given the role of such capital markets in driving debt financing towards various sectors and industries, it becomes important to understand what motivates financial sector decision-making as the risks become more apparent. Furthermore, resource-based economies like Canada are also in much need of reducing their financial sector’s exposure to fossil fuels and transitioning to a LCR economy before it’s too late. Hence, our study looked at the case of the Canadian green bond market and its participants to examine how they were driving growth in the market as well as achieving some aspect of transition. By undertaking key market interviews and conducting an online survey, our study found that green bonds were a key factor in mainstreaming the notion of sustainable finance through its explicit use of a green labels and establishing new norms like enhanced use-of-proceeds disclosures. Our results also suggested that market challenges like greenwashing and environmental impact or additionality needed to be considered for the market to reach its potential. Our recommendations to address these gaps and opportunities included involving more policymakers and regulators in the market, having a more scientifically backed, integrated and data-driven approach in how green bond impact gets measured as well as exploring new project areas like nature-based solutions or climate adaptation for future

The Intersection of Sustainability Accounting and Sustainable Finance

Moderator: Leanne Keddie, Sprott School of Business, Carleton University

Panelists:
Carol Adams, Durham University
Jan Bennington, University of Lancaster
Margaret Childe, Manulife Investment Management
Anna Young Ferris, University of Sydney

Description: This panel explores the intersection of sustainability accounting and sustainable finance with a focus on the need for urgent collaboration between these two realms. How can accounting and finance work together to create a more sustainable world? This will require good information about the impacts of sustainability challenges on firms as well as the impacts of firms on the world. Finance can direct the funds; accounting can provide the information to make good decisions. One critical hurdle to the effectiveness of these investments exists in the underlying measurement of these social and environmental criteria. We will discuss the current state of affairs, explore the limitations and (mis)use of sustainability accounting data in sustainable finance as well as where we need to go from here to create a more sustainable world.