Canada's Proposed Green Taxonomy Framework Follows Global Trends, With Some Notable Differences

Last month, Canada's Department of Finance published the Sustainable Finance Action Council (SFAC) recommendations for the development of a green taxonomy for sustainable investment, as the country moves toward its goal of net zero greenhouse gas emissions by 2050. “The Taxonomy Roadmap Report,” developed by the Taxonomy Technical Experts Group (TTEG) of the SFAC, in partnership with the Canadian Climate Institute, sets out emissions-based criteria for categorizing financial investments or assets into one of two investment categories—“green finance” and “transition finance.” The TTEG has designed the taxonomy with the objective of encouraging the issuance of both green and transition financial instruments in a way that is consistent with Canada's Paris-aligned commitment to limit global warming to 1.5° C.