The Canada Climate Law Initiative shares recommendations to the Standing Committee of Finance on the upcoming federal budget. We make three recommendations to amplify federal action on climate-related financial risks and opportunities, moving capital towards sustainable economic activities, and strengthening Canada’s economy:

1. Amend Canada Business Corporations Act Regulation SOR/2001-512 to include a new sub-section: “s.72(3). The financial statements shall include a climate transition plan to reach net-zero greenhouse gas emissions no later than 2050, with 5-year targets for emissions reductions towards the net-zero target, including disclosure of Scope 1, 2, and 3 emissions and annual reporting of progress towards meeting targets.”

2. Approve and implement the third-party organizations required to develop, implement, and maintain the Canadian green and transition finance taxonomy. The taxonomy is an essential part of Canada’s transition to sustainable finance and should be instituted promptly to set standards for classifying climate-related financial instruments and benchmarking climate risk management.

3. Amend section 7.1 of the Pension Benefits Standards Regulations to require that federally-regulated pension plan administrators, under their current obligations to establish a written statement of investment policies and procedures, adopt transition plans and determine how their climate resilience policies pertain to the plan’s portfolio of investments and loans.