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The City Citizen from EY.

Meghan Mills

Hello and welcome to The City Citizen, the podcast series from EY examining how cities can transform to be more resilient and sustainable places to live and work.

I'm your host Meghan Mills, Strategy and Operations Leader, Government and Public Sector for EY. Each episode we’re joined by expert guests for the specialist insight into our theme. This podcast was recorded earlier this year. At the time Heather Taylor was Chief Financial Officer and Treasurer for Toronto in Canada. Heather has since left this role and joined EY. Here’s my conversation with Heather recorded in May. It’s a fascinating discussion, I hope you enjoy it. Hello Heather, and welcome. 

Heather Taylor

Thanks Megan. 

Mills

Heather, you're someone who cares deeply about our planet and its citizens, and you're a driving force behind Toronto's C40 Women for Climate Mentorship Programme. How has this initiative helped Toronto and other C40 cities? 

Taylor

So mentorship is all about connections. It's about supporting people, raising people up and we felt that it was an enormous opportunity to allow women to have a seat at the table and have a voice and support them in bringing forward solutions around climate change. 

And I honestly believe that when you give them an opportunity to raise their voice, share their ideas, support them in a platform that surrounds them by like-minded individuals, we have an amazing recipe for success.

So each programme within the C40 Women Mentorship programme is different and every city has the opportunity to create a programme that suits their city’s needs. And so what we decided to do is we've chosen to align a programme that would allow the city to implement one of the ideas that comes forward to advance the City of Toronto's climate goals. 

Mills

I love how intentional that programme is. It's inviting women to the table and many cities as we know have been designed, not necessarily with women in mind, if we're honest.

And so it's nice to have that intentional view where you're bringing that perspective. Now let's look at the ESG journey in Toronto. Tell us about your ESG vision for the city.

Taylor

So we've been on a journey for several years and really in simple terms, my vision for the City of Toronto is to have ESG embedded into the organisation and life. I look at the journey success as DNA incorporated into the organisation’s fabric. I can say that the city has been great at planning. We have a climate plan. We have a heat resilience plan, and we have a flood mitigation plan. 

We are the 4th largest budget out of all Canadian governments, which makes the opportunity for us so much more important. And so why I’m pointing that out is when I talk about budgeting, we have a $16 billion operating budget, and we have a $50 billion ten year capital plan. So how we budget in actual fact can be very influential in advancing ESG principles and ESG thinking.   

We have about $9 billion in investments. We are demanding of who we are investing in to demonstrate commitments to ESG principles. 

We have a very large debenture programme. So that's where we go out to the market, and we offer bonds to raise money to help pay for the investments that the city is making. And we're the first Canadian government to offer a sustainability framework, being that we have offerings into the market of green bonds and social bonds. 

And what that means is that when we offer bonds, the investors that are purchasing those bonds are interested in green outcomes or they're interested in social outcomes. We’re greening our buildings.

And I think that it's clear that we can influence properties that the city owns, but we have now an opportunity to help promote private residential buildings through programmes that we're developing. 

The big thing that I will say when I look globally and this is part of the vision, I have for this city is, I really want the public and the stakeholders to hold us accountable for the commitments that we're making.

We're the first Canadian government to issue an ESG report on an annual basis. We report out the commitments we're making against our ESG goals.  

I think what's really important is that everything that I've done from a vision perspective isn't for only the purpose of Toronto, it's for the purpose of demonstrating how easy this really is when you chunk it out. And I’m trying to do it in such a way where other organisations, government or not, is to make it easy to replicate.

So we've done a lot of the heavy lifting and I’m optimistic that other organisations will follow suit because they've got a road map to follow, let's say, or a template to follow. 

So new in 2024 in our capital planning, we've developed an ESG scorecard to enhance the governance surrounding how we prioritise our investments.

We recently took a carbon budget to our Council for approval. We have to want to continue to evolve. We've got to be inspired to continue to evolve, because we all know that this is the next major global crisis that we're going to face, and we're only going to solve it if we come together.

Mills

Are these conversations that other CFOs of large cities are having? Is there a community that you are sharing kind of your road map, your best practises?

Taylor

Great question, and I’m happy to say in short, yes we brought the big six cities together across Canada and we actually have what has been tagged a circle of practise where we've created an inventory about everything each of us has done. And we've picked some priorities that we want to tackle over the next 12 and 24 months. 

This really was brought forward from the organisation A4S, Accounting for Sustainability, which is out of the UK. And they have circle of practises across the different continents.

On a global perspective I am involved with A4S. We do get together annually as CFOs from organisations around the world and we really do brainstorm. We come together to look at what we're doing, what is working, what's not working, what's changed. The challenges that are presented each year are crisis that we use as a catalyst to change our thinking. 

Mills

That's great to hear that there is that desire for collaboration not only in country, but globally. So I'd like to go back to what you were saying about the green bonds and the social bonds. You were mentioning accountability and how you keep stakeholders apprised of what's happening. How do you communicate back with those investors?

Taylor

This is really, really important and I’m really glad you asked this. There's a term called greenwashing. And this is where investors are putting their money into green instruments, but they're not necessarily convinced that their money is producing the outcomes, or that their money is being used in the areas where it was originally intended. 

And so these greenwashing concerns have been the catalyst for me representing the City of Toronto to look at how can we get out in front of this? And so the ISO certifications were a way to demonstrate to our investors, we're taking this seriously. We want to be held accountable. We want to demonstrate that we're tracking the commitments that we're making with metrics. The ESG annual report. 

This is really important because it speaks to a very wide scope of stakeholders. And this is about us saying, here's the commitment we've made. Here are the outcomes for targeting and here's how we're tracking. 

The other thing that I’m excited about is we are piloting right now, a blockchain scenario. So we've piloted blockchain itself in other areas, but the next area that we're going to use is layering blockchain into our debenture that we issue so that the investors can see whether their primary investors or investors that have purchased our bonds on secondary markets, they can see what the money is specifically going against and where we are in relation to the journey of the outcome. 

So that part is something that is going to be new in 2023-2024.We solicit feedback from our investors. We want to make sure that the information that we are sharing is meeting their needs. 

Mills

You know, there's accountability also to the people who live and work and socialise in Toronto as well. Do they have access to the ESG report? Do you get feedback directly from the citizens?

Taylor

I will say advocacy groups, we have, in the sense of one of our social pillars is housing, of course, which is a global concern right now. So I know from advocacy groups we've received feedback. Typically, it's been from the perspective of, great to see the goals. They're aspirational goals, but we want to hold you accountable to your commitments and your advancement on it. And that's where I say, perfect. That's exactly the kind of conversation that I want to trigger. Because I don't want all the work and investment into this report for someone to put it on a shelf. I want people to be looking at it and saying, are you delivering? Because that's what helps keep politicians focused on their commitments.

Mills

You also have ambitious targets to reduce greenhouse gas emissions by 45% by 2025. Could you share a couple of the schemes and innovations the city has implemented to reach that goal over the next few years?

Taylor

Absolutely. So we can control the assets that we own. Our real estate holdings. Of course, our transit system, which is you know the largest in Canada. Our fleet. So those are all our largest GHG emitters and have the biggest carbon footprint. And so we're working on the policies and the programmes that are needed, such as electrifying our fleet, electrifying our transit system. Looking at embedding Net Zero requirements into the construction of all new buildings - city owned buildings.

We've established bike lanes, bike share programmes to enhance behaviour, behaviour that is more carbon friendly. Education programmes, of course. People need to understand the urgency. That we don't really have the luxury of time. There is no one solution. We will help partner with the private sector to help residents green their own homes. But in the end, this is about the private and the public sector coming together and understanding that investments in this area are required. Behaviour change is required.

At the end of the day, it's going to take all of us to get to the reductions. The reductions that the city’s committed to is what the city can influence. But overall, from a Toronto perspective, Toronto's emissions, we need the public to buy in as well.

Mills

I’m so glad you mentioned the public private sector collaboration. That's another piece of it. We often talk about the power of three when we think of cities, the public sector, the private sector and then the citizen engagement. One last question for you, with Toronto having so much to offer, what is your favourite place in the city and why?

Taylor

I have lots of favourite places, but you know, I will say that Toronto has a professional baseball team. Our team is called, the boys of the summer. And I will say I’m a huge Blue Jays fan, that's what they're called, Blue Jays, the Toronto Blue Jays. And when you're in their stadium, which we call the Dome, the roof is open, bright blue summer sky with the CN Tower right there as its next door neighbour. I will say that when you're sitting there watching a fun summer game with 40,000 other people with the blue sky and the CN Tower, it's pretty good.

Mills

Sounds excellent. So I’m originally from Boston so I have to say I’m a Red Sox fan, but I haven't been to a baseball game in a long time. Maybe I'll have to make a trip up to Toronto as well.

Taylor

Well, if you do, call me, we'll go to the game together.

Mills

Absolutely. I would love that. Heather, it's been great having you on the podcast. Thank you so much for joining me today. 

Taylor

Thanks for inviting me. 

Mills

Do join us again to meet more special guests discussing the future of cities.

Also, you can subscribe to this series, so you won't miss an episode. From me Meghan Mills and Heather Taylor, thanks for listening and goodbye.

The City Citizen, back soon.

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