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Federal Environment Minister Catherine McKenna is urging Canadian corporations to fully disclose the risk that climate change poses to their businesses, but refuses to commit Ottawa to such a disclosure if it provides financial backing to the Trans Mountain pipeline expansion.

In a telephone interview this week, Ms. McKenna said carbon-risk disclosure is a critical part of the effort to have financial markets account for the costs of climate change. That accounting includes the impact of carbon pricing and regulations on energy companies.

“We haven’t made any decision with respect to that project,” the minister said, referring to Trans Mountain. “In general, we think disclosure is a really important piece of what you need to be doing as a responsible government and responsible companies. That’s something we’re looking at across the board.”

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She added that Ottawa did examine the climate impact of the project when it approved the pipeline expansion in 2016, and concluded that any resulting emissions from the oil sands are accounted for under Alberta’s carbon-management plan.

Related: Supreme Court’s cross-border alcohol ruling could hit Alberta in pipeline dispute

Explainer: Trans Mountain, Trudeau and the B.C.-Alberta feud: A guide to the story so far

On Wednesday, Ms. McKenna joined Ontario Premier Kathleen Wynne and former New York mayor Michael Bloomberg at the Toronto Stock Exchange to endorse Mr. Bloomberg’s task force report on climate-related disclosure.

In remarks at the event, Mr. Bloomberg warned that Canadian banks are heavily invested in the fossil-fuel sector, “undermining the country’s leadership on climate.”

The task force - which was established by Bank of England Governor Mark Carney - urges companies to disclose risks and opportunities for their business from climate change. It recommends firms spell out the expected impact on their businesses if the world transitions rapidly to a lower-carbon economy.

Kinder Morgan included a carbon-risk analysis when it issued shares in Kinder Morgan Canada Ltd. last year, but critics complained it fell well short of what the Bloomberg task force recommends. It did not include any analysis of what would happen to the pipeline’s financial health if global crude demand peaked or even declined after 2030.

In a statement at the TSX, which was recorded Wednesday, Mr. Bloomberg noted Canadian banks have a heavy exposure to the carbon-intensive industries.

“The Canadian banks are some of world’s biggest investors in fossil fuels, [which] undermines the country’s leadership on climate,” he said. “We got to do something about that. Part of the reason is that the risks of fossil fuels aren’t properly priced. When you interfere with the marketplace then people do things that are irrational.”

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Participating in the phone interview with Ms. McKenna, Mr. Bloomberg warned that the world is facing “some real cataclysmic possibilities” as global temperatures rise and weather patterns are disrupted.

Faced with that reality, institutional investors are increasingly determined to gauge the risks and opportunities that climate change poses to the corporations in which they invest.

“Corporations have to compete,” the billionaire founder of Bloomberg LP said. “If the other guy is putting out their environmental footprint, your investors are going demand you do it.”

As a result, financial markets will favour companies with lower carbon risk and devote more resources to those that can seize opportunities from the rapidly growing clean-technology market, he said.

The task-force report has been publicly endorsed by companies with more than US$8-trillion under management, including many of Canada’s largest financial institutions.

However, the country’s financial sector is still only beginning to develop useful and consistent information that would allow investors to assess corporations’ climate risk, Andy Chisholm, a former Goldman Sachs executive and director of Royal Bank of Canada, said Thursday.

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Mr. Chisholm - who was at the TSX event - is one of four members of an expert panel that will be reporting to government on the issue of sustainable financing, including the adoption of climate-risk disclosure.

A recent report from the Canadian Securities Administrators concluded that investors are dissatisfied with the current level of disclosure.

When you disclose risk, “the market can act and the market will make better decisions off good information,” he said.

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