Adam Scott’s Post

“There should only be a Canadian taxonomy if it credibly aligns with the overarching goals of the Paris Agreement,” says a letter sent to the Finance Minister last month by 55 climate groups, including Shift. “To align with the global scientific consensus of what is required from Canada on climate action, Canada’s taxonomy must exclude any expansion of oil or gas production, as well as any carbon capture related to these sectors." “Experts have been saying for a long time you can't have a credible taxonomy that would include investment in fossil fuels, particularly expansion fossil fuels like [liquified natural gas (LNG)],” said Adam Scott, executive director of Shift: Action for Planet Wealth and Planet Health, a climate finance advocacy group. “So it's very confusing as to why Finance is still pushing this forward and being unclear on this.” Scott says he’s disturbed by evidence of oil and gas lobbying of Finance Canada officials aimed at greenwashing the taxonomy by including fossil fuels. “The whole point of a taxonomy is to eliminate greenwashing, and Freeland's office seems hell-bent on doing the opposite,” he said. After six years and two expert panels, Finance Canada is now taking over writing the taxonomy. “So, third time's the charm,” Scott sarcastically said. “Are we going to continue this silly process of when the industry doesn't get the answer it wants, we're not going to move ahead? Certainly, Finance is causing damage here by continuing to not move forward on the taxonomy. Canada is falling further behind.” #cdnpoli #sustainablefinance #taxonomy #climaterisk #greenwashing

So in summary,  - 2018: Ottawa created a special panel to advise how we’d move to a cleaner economy. They recommended a taxonomy to classify which investments count as “green”.  - Nothing happened.  - 2021: Ottawa launched a Sustainable Finance Action Council to make recomendations for the taxonomy.  - 2022: recommendations from the council were delivered.  - Nothing happened. - 2023: Canada participated in a UN special envoy on climate action where it was ONCE AGAIN recommended that Finance Canada follow the recomended taxonomy.  - Nothing happened. - April 2024: Budget 2024 Ottawa promised to “update” us on the taxonomy. - Now: Finance Canada is REWRITING it? - (Nothing happening) 6 years and 2 expert panels later, the taxonomy project has successfully moved from one federal bureau to another and it’s still unclear if Ottawa will include fossil fuels in its taxonomy of “green” investments. It's actually quite simple. Fossil fuels are not a "green" investment. https://lnkd.in/gGrPkP2i

We aren't the only ones fighting for a sustainable finance taxonomy! Environmental Defence also coordinated a submission to the federal government and it was supported by 55 climate groups 🌎 Canada is lagging behind other countries that have already introduced their own taxonomies. Hundreds of Canadians support the implementation of a sustainable finance taxonomy - it is overdue and vital to align investments with a 1.5°C climate target. Read more at the Energy Mix: https://lnkd.in/eQRiJjww

🌍Another step towards mandatory climate disclosures - this time for large federally incorporated private companies in Canada ➡️Federal government plans to amend the Canada Business Corporations Act to make climate disclosures mandatory for large private companies ➡️climate disclosures allow investors to understand how businesses are managing climate-related risks, encouraging capital to be allocated towards climate-aligned activities ➡️ specific regulations are under development ➡️ small and medium sized businesses are exempt, but will be encouraged to voluntarily adopt similar climate disclosures (they may face pressure from their large customers as well) ➡️also announced was Canada's new sustainable finance guidelines (taxonomy) which will provide a classification system for "green" and "transition" investments. #climatedisclsoures #climaterisk

🌍Another step towards mandatory climate disclosures - this time for large federally incorporated private companies in Canada ➡️Federal government plans to amend the Canada Business Corporations Act to make climate disclosures mandatory for large private companies ➡️climate disclosures allow investors to understand how businesses are managing climate-related risks, encouraging capital to be allocated towards climate-aligned activities ➡️ specific regulations are under development ➡️ small and medium sized businesses are exempt, but will be encouraged to voluntarily adopt similar climate disclosures (they may face pressure from their large customers as well) ➡️also announced was Canada's new sustainable finance guidelines (taxonomy) which will provide a classification system for "green" and "transition" investments. #climatedisclsoures #climaterisk

Similar to the EU, Canada is taking bold steps toward a sustainable future with the introduction of its new climate taxonomy and disclosure rules. These forward-looking measures reinforce Canada’s leadership in the global push to achieve net-zero emissions by 2050. The government’s Made-in-Canada climate investment taxonomy establishes a clear framework for identifying and classifying “green” and “transition” investments, facilitating the flow of capital into sustainable and resilient economic projects. By enhancing transparency and accountability, this strategic initiative accelerates Canada’s transition to a low-carbon economy, positioning the country as a pivotal force in the fight against climate change. That's Smart! #RYCOM https://lnkd.in/geSYJE2y

Canada is set to introduce mandatory climate disclosure requirements for large, federally incorporated companies. This policy is aligned with the TCFD framework. Key Aspects: Large companies will be required to report on climate-related risks and opportunities. The Canada Business Corporations Act will be amended to enforce these requirements. Small- and medium-sized enterprises are encouraged to make voluntary disclosures. Canada is developing a classification system for green and transition economic activities to support its net-zero emissions target by 2050. This initiative is expected to facilitate the flow of private capital into sustainable activities, promoting economic growth. Melanie Baker-Jones Te Whakahaere Āhuarangi Ltd https://lnkd.in/gW7f_P9R

In the spirit of informed debate and discussion, I think it’s important to clarify the Sustainable Finance Action Council’s recommendations regarding the transition category and governance structure – which are available in full here: https://lnkd.in/g_BfVDaC To be clear, the transition finance category provides only for decarbonization activities for high-carbon industries as they transition to net-zero. In Canada, the oil and gas industry makes up more than a quarter of Canada’s emissions. Ignoring the sector entirely puts Canada’s transition at risk, and leaves investors with no guidelines in both the short and long-term. If Canada is to make meaningful efforts in meeting our climate goals, reductions in this sector are required—full stop. The proposed taxonomy ensures only activities meeting stringent science-based criteria and 1.5°C pathways are included, with clear net-zero targets and transition plans as a baseline qualification. The SFAC Roadmap Report also proposed a governance structure reflecting global best practices, including diverse stakeholder oversight and voting rights, as well as robust technical expertise, vital for setting accurate thresholds. Let's continue collaborating to establish a clear, credible, science-driven, and urgently needed Canadian taxonomy. As Jonathan Arnold from the Canadian Climate Institute recently told the Canadian Press: “It's hard but it's not impossible and it's quite necessary.” https://lnkd.in/grGJKW4B

With the end of the supply-and-confidence agreement and plummeting support for the Liberals, Canada's #climatepolicy mix is becoming increasingly unstable with the future of everything from investment #taxcredits to carbon pricing seemingly in flux. Given this uncertainty, some industrial emitters have stated they will refrain from making final investment decisions for major emission-reducing projects until they receive certain guarantees. Their rationale is that the potential reversal of any climate policy risks the return on investment for their proposed projects. Experts have pointed to an obscure mechanism known as carbon contracts for difference (#CCfDs) as an opportunity to allay such concerns. Carbon contracts for difference CCfDs are contractual agreements designed to provide price stability for projects that reduce emissions. Under CCfDs, a government entity guarantees a fixed price for the emissions reductions achieved by an industrial project based on established climate policy (for example, the existing or future #carbonprice). If the market price for those reductions falls below this fixed price, the government pays the difference to the project proponents. If the market price exceeds the fixed price, the excess is paid back to the government. This type of mechanism is used by a number of governments around the world, including the #UnitedKingdom, and some experts have suggested that a "broad-based contracts for difference program is the key to unlocking billions of dollars of investment in industrial #decarbonisation." The elegance and deceptive simplicity of this instrument has made it a policy winner in the eyes of many. The #Canada Growth Fund has allocated up to $7 billion for the issuance of CCfDs to unlock decarbonization projects. In theory, using a CCfD agreement gives an industry partner price stability on investment while the government gets to advance its goals of large emissions-reducing projects. Seemingly, a win-win. However, growing interdisciplinary research suggests that CCfDs may not always be the obvious win many assume they are. Feedback There is a long-held understanding in political science that policies produce important feedback patterns that can either reinforce or erode their durability. For example, the social security program in the #UnitedStates has created a significant voting bloc of beneficiaries that makes it difficult for policymakers to propose cuts to the program. Bridging these insights with transition perspectives, my research indicates that harnessing these positive feedbacks can play an important role in building durable #climateaction.

"Between March and June of this year, the Canadian Sustainability Standards Board (CSSB) accepted comments on its proposed sustainability and climate-related financial disclosures for publicly traded companies. They’re almost identical to those issued by the International Financial Reporting Standards (IFRS) foundation last year. At the end of July that feedback was published. Having spent the summer reading it, I’m sorry to have to report that the results are deeply troubling. On climate disclosure there is a great divide between two pillars of the Canadian economy. On one side, representing the majority of comment letters (65 per cent), are a myriad of companies, industry associations and communities concerned about costs of implementation, potential litigation and, most importantly, the possible effects on Canadian competitiveness in the North American market. On the other side, representing only 35 per cent of the comments, are large institutional investors, some academics and the sustainability services industry, which all seem more concerned with aligning Canada with the European Union (EU) and seeking to effect social change in the service of Net Zero." 📚 Read the full article by Dr Tammy Nemeth here: https://lnkd.in/eNuZjy54 #Climate #CSSB #IFRS #DrTammyNemeth