Sustainable Finance Round Up: March 2023

April 12, 2023 - 2 minutes
A woman surrounded by green landscape in the city.

Our Monthly Round Up Series delivers clients with digestible trends and take-aways on sustainable debt market movement.

Market Musings

In a month dominated by volatility and risk-off sentiment, global ESG volumes fell to US$100B for March but remained relatively resilient, experiencing a 17% decline YoY while the broader market fell 28%. As issuers returned to the market, green bonds remained the product of choice for the month, representing 60% of ESG issuance. Notably, this month saw net-outflows from ESG and sustainability themed ETFs with such fund flows dropping by US$3.7B.4

Canada's Green Agenda

Taxonomy Roadmap Report:

The Sustainable Finance Action Council (SFAC) published the roadmap report, outlining recommendations for the design and implementation of Canada's green and transition taxonomy.

  • Clarity on Green & Transition Labels: The roadmap report provides initial guidance on the types of activities that are expected to be considered 'green' or 'transition' and will over time endeavour to include more specific thresholds and inclusion criteria.
  • Building Investor Confidence in 'Transition': Canada's proposed taxonomy would support investor confidence in the transition label, helping raise the $C115B in annual green and transition financing Canada estimates is needed to meet its 2030 and 2050 climate goals.

2023 Federal Budget:

The budget unveiled over C$70B in clean tech and energy investments through 2035 to keep Canada competitive in the global transition. Largely via tax credits, the plan aims to support renewable electricity growth in Canada and investment in broader decarbonization technologies such as clean hydrogen and carbon capture, utilization and storage.

  • U.S. IRA Competition: The new budget promotes investment in clean energy infrastructure to compete in the international 'green economy' and respond to U.S. incentives from the Inflation Reduction Act (IRA).
  • Role of Private Capital: Canada's budget is designed to attract the private capital investment needed to decarbonize Canada's economy, while the proposed taxonomy will help to develop a credible transition finance market providing reliable sources of capital to companies with transition plans.

Source: TD Securities, Bloomberg, The Globe and Mail, Government of Canada

Pie chart showing top issuing sustainable debt sectors in March 2023

TD Securities' ESG Solutions

TD Securities' ESG Solutions team is the centralized ESG expert resource, delivering financing advisory services, thematic and investor insights, and carbon markets solutions to help our clients reach their goals.

Portrait of Bridget Realmuto LaPerla

Director, ESG Solutions

Portrait of Bridget Realmuto LaPerla

Director, ESG Solutions

Portrait of Bridget Realmuto LaPerla

Director, ESG Solutions

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