Build back better: Canadian government offers coronavirus loans for big businesses that demonstrate sustainability commitments

May 28, 2020

To help companies weather the storm of the coronavirus and keep employees on the payroll, Canada is offering financing for large Canadian firms that demonstrate a commitment to improved climate performance. The loans, or what Prime Minister Justin Trudeau has called “bridge financing”, are for businesses that are looking for financing of $60m or more, have significant operations or large numbers of employees in Canada, and are not involved in any insolvency proceedings. Crucially, however, Finance Minister Bill Morneau has said companies receiving the loan must also disclose their climate action plans and sustainability goals. They must meet other conditions as well, including not paying their executives “excessive” salaries, and have a history of no tax evasion. Greenpeace welcomed the various conditions the government is imposing on companies applying for the loans. Elsewhere, the UN has called for governments to create more sustainable, resilient and inclusive societies as part of the coronavirus recovery.

The coronavirus crisis has provided a rare opportunity for policymakers to rebuild the economy more sustainably. The terms of the Canadian government’s loans provide some reason for optimism that the wider movement for a sustainable pandemic recovery can be put into action. As this movement to “build back better” gathers momentum, there is now, more than ever, a tangible incentive for companies to embrace sustainability and set out long-term targets. Some companies have already joined the calls for sustainable stimulus packages, such as the chief executives of Volvo Group and Swedbank, who have urged European leaders to use the coronavirus response to build a more sustainable economy and achieve broader social goals. As governments slowly begin to re-open economies, sustainability criteria embedded within recovery plans may be a make-or-break moment for creating a better and resilient future.