Defining Transition Finance in Canada

CSA Group is currently leading the development of a “Transition Finance Taxonomy” as part of a National Standard of Canada for Transition Finance. This work was initiated based on the recommendations put forward in the Government of Canada’s Expert Panel on Sustainable Finance Final Report dated June 2019.

This new program will include the following major tasks:

1. The development of a “Transition Finance Taxonomy” as a National Standard of Canada for Transition Finance.

2. Canada to play an active and leadership role in the creation of a global transition finance taxonomy that is relevant for Canada.

3. Canada’s participation on ISO Technical Committee (TC) 322 Sustainable Finance.

Who should be aware of Transition Finance?

When developed, a number of stakeholder groups in Canada will benefit from transition-related financial products and services.

• Companies in Canada seeking capital for transition-oriented activities (e.g. reducing greenhouse gas emissions and their environmental footprint while advancing new technologies).

• Institutional and retail investors who require assurance that their investments support the transition to a lower carbon economy.

• Canadian financial institutions providing credit solutions, advisory services or access to capital markets to enable the transition to a low-carbon economy while also helping clients manage transition risk.

Transition Finance in Canada Today

Given the importance of natural resources and heavy industry to the Canadian economy and society, Canada has both an opportunity and a challenge in meeting its own greenhouse gas reduction targets.

It is imperative that Canada’s climate change strategy includes transition-related investment opportunities that contribute meaningfully to Canadian and global climate objectives.

CSA Group’s Technical Committee for Transition and Sustainable Finance

The CSA standards development process combines rigor with a transparent, balanced consensus-based approach that integrates feedback from a range of stakeholders and draws on the expertise of technical experts and volunteer subject matter experts.

National Standards of Canada are developed by a Technical Committee comprised of a balanced matrix of experts across all relevant interest groups. The Committee for the development of this standard includes representatives from Canada’s financial sector (including the major banks, pension fund managers, wealth and asset managers, insurance companies, rating agencies), Canada’s natural resource sectors, government and related industry stakeholders.

Revised April 22nd, 2020

Please visit our Environment and Natural Resources page to view our current portfolio of standards.

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February 21, 2020