ESG-Linked Loans Grow in Canada as Regulator Takes on Climate

Canadian lenders and borrowers are increasingly turning to sustainable-linked loans ahead of potential regulations from the banking supervisor to deal with climate change.

The facilities, which adjust pricing according to the level of environmental, social or governance compliance, may reach C$20 billion ($16.6 billion) this year, said Jonathan Hackett, head of the sustainable financial group at Bank of Montreal. At least eight companies, including energy firms Gibson Energy ULC and Enerplus Corp., have signed or converted conventional facilities into sustainability-linked loans for the equivalent of C$8.44 billion, according to data compiled by Bloomberg.

“It is to some ...