A Q&A with Amy West, Global Head of Sustainable Finance and Corporate Transitions group

TD Bank Group recently announced an ambitious global action plan to drive sustainable, long-term growth in the low-carbon economy. Environmental, Social, and Governance (ESG) has become central to how stakeholders, including investors, employees and customers, evaluate companies. As ESG continues to grow in importance and emerges as a critical consideration for our collective future, a differentiated approach and clear climate action plan is essential to support a strong, competitive and growing enterprise.

The newly established Sustainable Finance and Corporate Transitions (SFCT) group in TD Securities, led by Amy West, was created to advise and support clients as they work to transition and capture the opportunities of a net zero world by 2050.

Following is a Q&A with Amy West, who shares her thoughts on the new group's mandate and the value it will bring to clients on their transition efforts.

Over the past five years, ESG has become a leading topic in boardrooms as well as in the halls of government. What is driving the interest in, and focus on ESG?

There has been a sea-change shift in ESG being viewed as a corporate citizenship "nice-to-have" to becoming a material financial risk. As the understanding of ESG risk grows to encompass not only how a company can impact the environment, but also how changes in the environment can impact business, ESG is a factor that can no longer be ignored or relegated as a low-priority agenda item.

The recognition of ESG as a material financial risk is further highlighted with COVID and its impact – spanning industries and geographies. ESG has proven to be resilient in the face of tightening corporate budgets, market volatility and integral to recovery efforts.

This transition to a low-carbon economy requires the participation of all parties, regardless of industry or geography. It will not be a simple or easy journey, but we're committed to helping our clients identify their role in the transition economy and navigating the evolving ESG landscape.

Tells us more about the Sustainable Finance and Corporate Transitions group that is central to this ESG initiative.

The new SFCT group advises on ESG factors across the entire TD Securities product continuum as well as advisory services.

We bring together a broad range of expertise from capital markets, investment banking, climate policy, climate risk, framework advisory, corporate sustainability consulting, reporting, and ESG research, among other areas.

In addition to advisory services, the team offers green, social, and sustainable bond framework creation services, sustainability-linked loan and bond structuring and underwriting, and M&A and private equity ESG due diligence.

We will also look to add additional expertise as the need develops.

What is our market differentiator?

ESG risks drive stakeholder concerns and investor demand – it is an area where trusted advice is sought. How companies approach transition is a strategic discussion at the most senior levels as it impacts valuation, access to capital, and competitive positioning. Its importance will only intensify in the coming years.

Our approach is unique in the industry. The SFCT group is a centralized point of contact for ESG within TD Securities. This allows us to leverage knowledge across all aspects of the business to deliver holistic solutions and advice to our clients in this rapidly evolving area.

The growing team also has a global footprint with members based in Toronto, New York, and London, allowing us to see trend lines and share feedback in real time.

What aspects of the economy does ESG impact? Where do you see the growth opportunities for sustainable financing?

As governments, companies, capital providers, and investors work to understand the material financial risks posed by climate change, ESG easily touches every facet of our economies.

The sustainable financial markets have proliferated in both volume and structures over the past 10 years. The fixed income market has developed from green bonds to now include social, sustainable, transition, and sustainability-linked bonds that address a variety of societal challenges. The sustainability-linked loan market has taken off and is poised to become an increasingly significant portion of the sustainable financial market.

The most significant opportunity for growth is two-fold. COVID brought a surge in social bond issuance in 2020 as companies utilized this financing vehicle to fund their pandemic response initiatives. This is a trend we expect to continue. We are also seeing strong interest in sustainability-linked loans and bonds. Companies appreciate the alignment of these products with their strategic sustainability initiatives and the scalability compared to project-based financing options.

As the world looks to recover from the pandemic, governments are steering economic recovery efforts to focus on recovering better – and private sector actions are critical to the success of these initiatives.

TD has an opportunity to lead by example and work with stakeholders to reduce its financed emissions through our own ESG commitments, while also supporting jobs and the economic recovery. We have a long history of leading in the ESG space. With the efforts of thousands of our colleagues, the climate action plan will create positive impact for our clients and communities as we address one of the great challenges of our time.