Financial market industry trends in the face of the climate crisis (4th LABFI Symposium)

On October 30, Université Laval hosted the fourth annual symposium of the Financial Services Law Laboratory (LABFI), entitled "Financial regulation: an ally in the face of climate changes?" in which some members of our financial services team participated. This event  brought together several players from the legal, academic and financial worlds to reflect on emerging issues related to sustainable finance, climate governance and the evolution of regulatory frameworks.

Four key areas of discussion

The symposium focused on four main themes:

1. The scientific and legal foundations of climate regulation, with presentations on the systemic impacts of climate change and the mechanisms provided by the law.
2. Disclosure requirements and governance practices of financial institutions, including an analysis of the Quebec and Canadian frameworks, as well as international developments.
3. Insurance-related challenges in the face of natural disasters, touching on matters such as consumer protection, management of invisible risks and compensation models.
4. Sustainable investment and its regulatory framework, with reflections on green taxonomies, the risk of greenwashing and societal expectations.

Climate risk disclosure: A strategic imperative

Speakers highlighted the growing importance of climate risk disclosure, distinguishing between two main categories:

• Physical risks: Associated with extreme weather events (floods, fires, storms) and the gradual degradation of ecosystems.
• Transition risks: Associated with the shift towards a low-carbon economy (regulatory changes, technological innovations, stakeholder pressures).

The Climate Risk Management Guideline published by the Autorité des marchés financiers (AMF, Quebec’s securities authority)¹ sets out the AMF’s expectations regarding climate risk disclosure. Annex 1 of the guideline presents the minimum disclosure requirements, including the identification of physical and transition risks. There is no obligation for financial institutions to publish prospective environmental objectives. However, it is prohibited to make false or misleading representations.

Notable example: On October 23, 2025, the Paris judicial court ruled against TotalEnergies for misleading commercial practices regarding a 2021 advertising campaign claiming that the group was aiming to achieve carbon neutrality by 2050. This is the first global conviction of a multinational oil company for greenwashing. The ruling requires TotalEnergies to remove the misleading statements from its website and publish a link to the court decision for 180 days, under penalty of daily fines.²

In Canada, although no judicial precedent exists yet for misrepresentations of carbon neutrality, Bill C‑59 made several amendments to the Competition Act³  in order to regulate misleading environmental claims, particularly those related to carbon neutrality, in an effort to combat greenwashing.⁴

Insurance and climate-related claims: Towards innovative solutions

2024 was the costliest year in Canadian history in terms of losses related to extreme weather events, which soared to $8.5 billion.⁵ This has had a direct impact on businesses, which must adjust accordingly. According to a survey:

• 24% of businesses have identified or are in the process of identifying climate threats to their operations.
• 25% have done the same for their supply chains.⁶

Faced with this reality, the Canadian property and casualty insurance market must show resilience and innovation. To that end, during the symposium, insurance representatives referred to a program that enables policyholders to rebuild more sustainably after a disaster, through coverage that allows them to share the additional costs associated with replacement materials that are more resistant to water, hail, or wind following a disaster, as well as through prevention facilities. 

Outlook and recommendations

Beyond environmental considerations, speakers emphasized that taking climate risks into account offers strategic advantages for financial institutions:

• Growing expectations from investors and the public: Transparency on climate issues is becoming a factor when it comes to trust and competitiveness.
• Increased demand for transition investment products: Investors are seeking investments that align with a low-carbon economy. 

Furthermore, according to an Ernst & Young study, climate disclosure is a strategic lever for:

• Increasing competitiveness and value creation, by making climate reputation a differentiating factor.
• Facilitating access to capital and strengthening organizational resilience, while meeting the expectations of investors and stakeholders.
• Anticipating regulatory requirements, in particular by adopting the international standards of the Task Force on Climate-related Financial Disclosures and the International Sustainability Standards Board, which structure disclosures around governance, strategy, risk management, and indicators.⁷

Takeaways

For the participants, including those from our team, this symposium provided a valuable opportunity to reflect on the transformations of financial law in the context of climate change.