Empowering Transformation

GMF’s priority areas in 2023-24

Accelerating private investment opportunities

Decarbonization is a challenge that spans every part of society and the economy and isn’t something the public sector can address on its own. The needs at the municipal level far exceed what local governments can deliver unassisted.

That’s why it’s a priority for GMF to accelerate financing from partners in the investment and financial sector. In 2023-24, a key objective was to begin to recapitalize and expand local initiatives under the Community Efficiency Financing (CEF) initiative through follow-on financing from local credit unions, impact investors, traditional banking institutions, private developers, utilities, non-profits and housing cooperatives.

• Refreshed its CEF funding offer with two distinct options: a seed funding stream for underserved jurisdictions and underrepresented program financing models, and a growth stream to replicate and scale all other project types
• Completed a client needs assessment and programs profile that confirmed the scale of investment municipalities require and identified key capacity needs
• Developed an investor engagement plan
• Assembled a clear business case for Property Assessed Clean Energy (PACE) investing and initiated a jurisdictional scan of existing PACE legislation and financing models
• Developed a pilot for a capacity-building program for CEF, aimed at helping municipalities address key factors (streamlined processes, upgraded systems, new delivery models, and follow-on private investment) that will enable them to expand their CEF programming. The program is scheduled to launch later this year.

Embracing multi-solving and Reconciliation & Anti Racism, Equity and Inclusion (AREI)

Climate change does not impact all communities equally; it disproportionately affects historically marginalized and underserved groups. These communities often face systemic barriers that restrict their access to resources and limit their involvement in decision-making processes. Consequently, they are more likely to live in areas vulnerable to environmental hazards and have less ability to relocate away from these risks. The combination of these factors makes these groups more vulnerable to health and economic challenges when disasters strike.

The three pillars of sustainable development connect most clearly and naturally at the local level, where municipalities can effectively integrate these principles into their policies and initiatives. However, it is also at this level that the limitations of these principles in addressing deep, structural issues of social and economic inequality become most apparent. In response, GMF launched its broader Reconciliation & Anti Racism, Equity and Inclusion (AREI) framework, committing to support municipalities, stakeholders, and citizens as projects are designed and implemented through a Reconciliation and AREI lens.

To address this inequality, it's essential to integrate these considerations into our climate planning. Doing so not only ensures that our strategies are holistic and equitable but also fosters more resilient, sustainable communities. Once completed, this approach will support societal cohesion by encouraging participation and inclusivity, increasing the effectiveness of environmental initiatives, and ensuring no one is left out of our collective efforts against climate change.

GMF has introduced a measurement framework for Reconciliation and AREI. This framework, which sets annual targets for staff, governance and programming, aligns GMF's activities with the strategic objectives of the Federation of Canadian Municipalities (FCM), and with global best practices in diversity and inclusion. While progress has been made to integrate the principles of Reconciliation and AREI into our work, we recognize the this is an ongoing journey and there is significant importance to continuing to have meaningful dialogue to learn and integrate best practices.

In 2023-24, GMF:

• Established a biodiversity working group, defined a set of objectives for biodiversity and nature-based solutions through a Reconciliation and AREI lens, and began work on a corresponding set of measurement frameworks
• Approved a new socio-economic benefits framework to document Reconciliation and AREI outcomes, including social procurement, local economic development, and inclusive community engagement
• Hosted a successful webinar on integrating Reconciliation and AREI principles in GMF programming

The Low Carbon Cities Canada (LC3) network developed an “equity rubric,” to ensure Equity, Diversity and Inclusion (EDI) considerations in all grant and investment decisions. The rubric was applied to 63 projects, with 40 identified as having significant potential to promote equity in diverse community initiatives.

Multi-solving at GMF:

Addressing multiple sustainability and inclusivity outcomes through a single solution

GMF initiatives embed multi-solving principles in project evaluation, selection, and performance monitoring. These range from nature conservation and achieving international biodiversity commitments, to circular economy strategies, to managing waste and materials, all while ensuring the most vulnerable in society benefit equally from investments in climate action. While the terminology has only become mainstream in recent years, GMF has practiced multi-solving since its inception in 2000. We were set up to support local governments in their efforts to push boundaries, deliver tangible results and make life better for local citizens. From the very beginning, our efforts have been guided by a comprehensive understanding of sustainability aiming to integrate environmental, economic and social factors.

Championing sustainable financial management

GMF walks the talk on corporate sustainability, aiming to entrench bedrock principles of sustainable development in every aspect of its operations. GMF’s commitment to sustainability begins with its organizational values, from financial stewardship to its approach and environmentally-conscious operations. Our unique funding model, endowed by the Government of Canada, enables us to support these principles through a two-part investment strategy for near- and long-term growth: In the near-term, we’re focused on providing even more concessional funding to communities through larger grant envelops from our more recent programs, allowing municipalities to take more risks in demonstrating a net-zero pathway across their assets and operations. Over the long term, we are dedicated to diversifying the investment strategy for our endowed funds. Our focus is on investments that align with our statement of investment beliefs, which prioritize climate mitigation, resilience, and broader sustainability goals. This strategy has successfully generated higher returns, enabling us to offer more funding to our target clients, which include municipalities and their partners. As a result, we can provide lower interest rates, longer repayment terms, and fund more projects in the future.

In 2023-24, GMF:

• Evaluated and reprofiled our investment portfolio to adhere to Environmental, Social, and Governance (ESG) principles
• Adopted a risk appetite statement that aligns with all aspects of GMF’s mandate ensuring sustainable cash flow for operations, managing risk and volatility, and considering operational and credit risks in lending activities. It also addresses long-terms risks by adhering to ESG principles.
• Established sustainable investment principles to guide our organization's financial decisions, promoting long-term environmental stewardship and social responsibility
• Became a signatory to the United Nations Principles for Responsible Investment (UNPRI) and received our first performance report which shows above-average results compared to peer organizations and affirms our commitment and approach to responsible investing.

Delivering a full suite of high-impact programming

GMF’s guiding purpose has always been to work with municipalities on innovative, scalable solutions in infrastructure and technology, financing, municipal processes and practices, and policy. In 2023-24, we worked to streamline and improve existing programs while developing and deploying new ones, all with the goal of helping communities get ahead of a multi-faceted climate emergency and accelerate their efforts on the road to net-zero operations.

• Advanced net-zero integration by setting and achieving GHG reduction targets and developing an approach to reducing fossil fuel use in each of its funding streams, including scoping activities for its Community Efficiency Financing (CEF) and Sustainable Affordable Housing (SAH) programs and integrating a net-zero target in our renewed Net Zero Acceleration (NZA) funding offer
• Approved CEF, SAH and Community Buildings Retrofit (CBR) initiative projects for this fiscal year that are anticipated to reduce GHG emission by approximately 7 kilotonnes per year of carbon dioxide equivalent (kt/y CO2e). This brings the total reductions for these programs to approximately 31 kt/y CO2e, achieving 62% of the overall target of 50 kt/y CO2e by 2026
• Developed and designed two new initiatives, Local Leadership for Climate Adaptation (LLCA) and Growing Canada’s Community Canopies (GCCC), both launched in Spring, 2024
• Developed and delivered more than 130 knowledge and training activities to 4,242 participants across all programs, reaching more than 15,000 users via digital content.