The Canadian government has announced its intention to deliver a national sustainable finance taxonomy and introduce mandatory climate-related disclosures for large, federally incorporated private companies. A statement said the new commitments were essential for market certainty, to unlock net zero investment opportunities, and to uphold the goals of the Paris Agreement. The ‘Made-in-Canada’ sustainable investment guidelines will serve as a voluntary tool for investors, lenders and other stakeholders by credibly identifying green and transition-focused economic activities, accelerating and scaling up the flow of capital into net zero-aligned activities across the Canadian economy. The introduction of mandatory climate disclosures through amendments to the Canada Business Corporations Act will also help investors to better understand how companies’ current activities align with the realities of a net zero economy. As small- and medium-sized businesses will not be subject to these requirements, the government is currently considering ways to encourage these companies to voluntarily publish climate disclosures. “In the 21st century, a competitive economy is a net zero economy,” said Chrystia Freeland, Deputy Prime Minister and Minister of Finance. “We are seizing Canada’s economic advantages to attract investment and ensure Canadian workers benefit their fair share in the global race to net zero.” The Canadian government predicts that reaching net zero by 2050 while growing the economy will cost between C$125 billion to C$140 billion (US$91 billion to US$101.9 billion) of investment a year. “The development of a sustainable investment taxonomy, paired with heightened transparency on climate disclosures, amounts to an important stepping-stone for Canada on the path towards a cleaner economy,” said Steven Guilbeault, Minister of Environment and Climate Change. “These initiatives will help mobilise needed private sector financial flows to build a cleaner economy and give investors who are looking for the sustainable option the clear direction they seek.” In addition, Canada announced the issuance of an additional C$2 billion in green bonds through the re-opening of Canada’s second green bond, issued in February.
