The Financial Post reports in its Thursday, May 27, edition that the Bank of Canada is not the greenest of the major central banks. The Post's Kevin Carmichael writes that the Bank of England gets that distinction. Earlier this year the British government ordered it to take climate change into account when purchasing financial assets.
For now, Governor Tiff Macklem's sole mandate remains taming inflation. Having a singular focus allows him to steer clear of political traps. A climate remit like the one given to the Bank of England would complicate life for the BOC, because oil companies are big issuers of corporate debt. The BOC's emergency Corporate Bond Purchase Program specifically sought to build a portfolio that mirrored the broader market. That meant buying bonds that had been issued by companies such as Canadian Natural Resources and Suncor Energy.
Still, the BOC is becoming an important player in the climate fight. It is creating a role for itself as an honest broker in a country that continues to struggle to find a consensus on how to meet its Paris commitments. The BOC has said that owners of assets exposed to climate-related risks might not be as wealthy as they currently appear to be on paper.
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