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ESG-Linked Loans Are Set to Blast Off in Canada, CIBC Says

  • Regulators and banks move toward raising the product’s appeal
  • Canadian energy firms a good fit for borrowing via those loans
The Carbon Engineering Ltd. pilot facility stands in Squamish, British Columbia, Canada, on Monday, Nov. 4, 2019. 

The Carbon Engineering Ltd. pilot facility stands in Squamish, British Columbia, Canada, on Monday, Nov. 4, 2019. 

Photographer: James MacDonald/Bloomberg

Sustainability-linked loans, a type of financing subject to a borrower’s compliance with environmental or socially responsible standards, is set for a boost in Canada as the government and companies move aggressively to reduce greenhouse gas emissions.

“You’ll see support for this product in virtually every sector going forward,” said Eric Metivier, a managing director and head of corporate banking for Canada at CIBC. “This is the beginning of the story for sustainability-linked lending in Canada.”