Canada has appointed 17 members to a new council to define which economic activities qualify as green or transition investments, a key step toward establishing the country\u2019s sustainable finance taxonomy.<\/p>\n
The newly-formed Taxonomy and Transition Planning Council will oversee the development of evidence-based criteria for both labels, giving investors and companies the clarity they need to direct capital toward genuinely low-carbon projects.<\/p>\n
\u201cTo stay competitive and attract investment, Canada needs to send clear signals of our climate-readiness to capital markets,\u201d the council\u2019s inaugural chair Marlene Puffer said<\/a> in an April 8 release. \u201cCanada needs credible, internationally-aligned tools\u2014including a sustainable investment taxonomy and transition plan guidance\u2014to mobilize private capital for our companies, communities, and national priorities.\u201d Puffer, the former chief investment officer of the Alberta Investment Management Corporation<\/a>, leads the body, while former Office of the Superintendent of Financial Institutions<\/a> Vice-Superintendent Jamey Hubbs serves as Vice Chair.<\/p>\n The announcement follows the federal government\u2019s plans<\/a> to establish a sustainable investment taxonomy by the end of 2026. Last December, the government provided two years of seed funding and appointed the Canadian Climate Institute (CCI) to work with Business Future Pathways\u2014a climate-focused investor initiative\u2014to develop a governance structure to oversee the taxonomy\u2019s development. An independent appointment committee, led by former Sustainable Finance Action Council<\/a> chair Kathy Bardswick, was assigned to nominate members for the council.<\/p>\n \u201cThis new council represents an extraordinary depth of acumen, experience, and expertise,\u201d Bardswick said. \u201cThe calibre of leaders who have stepped forward to advance the development of Canadian-made sustainable investment and transition planning guidance speaks volumes about the importance of these initiatives to Canada\u2019s future growth and competitiveness.\u201d<\/p>\n According to<\/a> the CCI, the council will be key to guiding Canada\u2019s economy through a global energy transition that is \u201creshaping the fundamentals of economic competitiveness.\u201d More than 60 countries already have<\/a> such a taxonomy in place or under development, including most of Canada\u2019s trading partners. Canada needs its own framework to open access to foreign markets and capital, though the guidelines will need to be tailored to its domestic economy, as well.<\/p>\n Because of how the Canadian economy is structured, the taxonomy will focus on transition investments, \u201coften viewed as the missing middle of taxonomies,\u201d rather than the green activities emphasized by other countries, writes the CCI. The Canadian taxonomy will also aim to provide clarity about which decarbonization investments in oil and gas are aligned with the taxonomy.<\/p>\n The taxonomy will also be important for building public trust, providing clarity about which climate investments are effective and which should be considered greenwashing.<\/p>\n ESG News reports<\/a> that executives and investors should be prepared for higher standards for climate disclosures, alignment with taxonomy criteria, and transition strategies. A new briefing note from the Institute for Sustainable Finance (ISF) explores<\/a> ways that resuming<\/a> development of mandatory disclosure policies\u2014as is anticipated by the council\u2019s establishment\u2014will affect the Canadian economy. There will likely be initial net costs associated with new disclosure requirements, but there may also be \u201ca meaningful structural shift in incentives\u201d as firms with strong climate governance and transition strategies benefit from improved market confidence and, potentially, lower financing costs.<\/p>\n \u201cA well-designed mandatory disclosure regime would support both more efficient capital allocation and more effective prudential oversight,\u201d said ISF Research Associate Prateek Sood. \u201cIt would also complement other climate-risk policy tools, such as sustainable investing guidelines and greenwashing regulation, by providing a more reliable information base for evaluating claims and tracking progress.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Canada has appointed 17 members to a new council to define which economic activities qualify as green or…\n","protected":false},"author":2,"featured_media":12642,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[4554,17,6935],"class_list":{"0":"post-12641","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-canada","8":"tag-byline-internal","9":"tag-canada","10":"tag-dow"},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/posts\/12641","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/comments?post=12641"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/posts\/12641\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/media\/12642"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/media?parent=12641"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/categories?post=12641"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/tags?post=12641"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}