Canada needs better and more consistent climate-related data to get different stakeholders on the same page as it works toward building a low-carbon economy, the Smart Prosperity Institute says in a new brief.
The University of Ottawa-based think tank argues that while Canadian governments, regulators and standard setters have begun work on different climate information tools to respond to climate and economic challenges, such as a climate finance taxonomy and Canada-specific climate-related disclosures, “these tools are being developed in silos by different institutions with varying operational mandates” and timelines.
It’s pushing for a national climate information architecture (CIA) that would align these different components and ensure that clear, consistent and accurate climate data are guiding investment and policy decisions in the country.
“While progress has been made to advance climate information, implementation remains slow and fragmented,” reads a summary of the policy brief.
“This situation adds to the cost of doing business and contributes to broader policy and investment uncertainties at a time when Canada is trying to deepen economic relationships with countries that have more advanced climate information frameworks.”
The think tank suggests that the CIA would comprise five key building blocks: climate-related financial disclosures, climate transition plans, climate scenario analyses, a climate finance taxonomy and data and analytics.
And it stresses that these building blocks are interrelated. For example, data supports disclosures, which inform transition plans, which are guided by taxonomies.
The policy brief argues that governments, regulators, standard setters, financial institutions, non-financial corporations, academics and civil society must work together “to strengthen alignment through standardization, regulatory action and public-private partnerships.”
Among other things, it recommends that the federal government provide monetary and non-financial support for the establishment of a third-party, independent body to lead the development of a national climate finance taxonomy and finalize and implement a national climate data strategy.
It also recommends mandating standardized transition plans for public and private companies and closing the regulatory gap for private companies that currently fall outside of mandatory climate-related financial disclosure rules through amendments to the Canadian Business Corporation Act.
The policy brief comes at a time when the Canadian Securities Administrators has paused work on mandatory climate disclosures and the federal government’s work on a climate finance taxonomy has stalled.
In a statement, a Department of Finance official said the federal government has engaged and will continue to engage with regulatory and standard-setting bodies across the country on advancing sustainable finance policy and tools in Canada.
“The government remains in close collaboration with partners at all levels to address sustainable financing priorities together,” the official said in an email.
Asked about its progress on a climate finance taxonomy, the department said the most updated information regarding the Canadian taxonomy remains a backgrounder published last October and that it’ll have more to say “in due course.”
Meanwhile, the CEO of the Ontario Securities Commission has said that the CSA’s pause on mandatory climate disclosures is “not indefinite.”