(Toronto) Finance Minister Chrystia Freeland said Wednesday the federal government is moving forward with guidelines on sustainable investing and corporate climate data disclosure, but details on the plans are scarce.
The move comes as a wide range of investors, asset managers and environmental groups have pushed the government to put in place such guidelines, also known as green taxonomies, to attract more investment in emissions reduction projects.
The federal government estimates that to achieve carbon neutrality in Canada by 2050, between 125 and 140 billion annual investments will be required, compared to current expenditures of between 15 and 25 billion.
“We know we need to attract even more private capital. We need to attract even more private capital so that the transition happens at the pace and scale required by the climate,” said Ms.me Freeland at a conference on principles for responsible investment in Toronto.
Frustration grows as efforts to create sustainable investment guidelines to attract more capital have been underway for years in Canada, with several groups tasked with creating recommendations, but still nothing concrete is in place.
Those seeking answers will have to wait a little longer, however, as the government has indicated that it plans to hand over development of the taxonomy to a third-party organization, with the first guidelines to be published within a year of work commencing of the organization. He did not provide an estimate of how long it would take for the anonymous organization to get started.
On the potential inclusion of fossil fuels – a key area of contention – the government said it did not anticipate new natural gas production would be eligible, but that drafters could consider existing natural gas for its potential. to replace more polluting fuels on an international scale.
Environmental groups have been adamant that fossil fuels have no place in such a taxonomy. But a task force that provided recommendations to the government argued there should be a transition category that would reduce emissions from fossil fuel production and other high-emissions industries.
The government says the transition taxonomy could, for example, include projects that significantly reduce emissions from existing natural gas production, or emissions associated with limited construction of existing production sites.
Regarding information disclosures by companies, the government announced that it will launch a regulatory process to determine what information and what size of private federal companies will be included.
Need for climate transparency
Mme Freeland stressed that small and medium-sized businesses would not be subject to such disclosures, but that it was important that there be greater corporate climate transparency.
“We know that requiring these disclosures is the right thing for companies, it’s the right thing for their lenders, it’s the right thing for their insurers, it’s the right thing for their shareholders,” said the Minister Freeland.
“Requiring disclosures means people can make decisions based on transparency and understanding of climate risks and climate exposure.”
Speaking after Mme Freeland at the conference, Mark Carney, the UN special envoy for climate action and chairman of Brookfield Asset Management, stressed the need for faster action on all fronts.
While Mme Freeland stressed that the taxonomy plan, with its unusual transition category, is a Canadian solution, Mr. Carney said it is important that governments implement taxonomies that are not too out of step with what other countries do.
He also highlighted the importance of going beyond emissions disclosure to also require companies to disclose how they plan to achieve carbon neutrality.
“Governments should act now by adopting consistent and comparable taxonomies and imposing transition plans on large companies. »