Global Financial Taxonomies Considerations for the Canadian Context

The report analyzes 21 international taxonomies to provide a framework for a potential Canadian transition taxonomy, emphasizing the need for science-based thresholds to avoid greenwashing in a resource-dependent economy.

• Canada's economic transition is heavily dependent on its natural resource sectors, which contribute 21.61% of the national GDP and over 6% of employment in Alberta.
• The report distinguishes between two types of transition: 'transition within', which involves decarbonizing existing activities (e.g., cement manufacturing), and 'transition away', which involves replacing high-carbon activities with low-carbon alternatives (e.g., replacing fossil fuel electricity with renewables).
• To maintain credibility and reduce greenwashing, the report recommends that developed economies like Canada adopt a robust threshold-driven approach for eligibility rather than a principles-based approach, which is more common in emerging economies due to data limitations.
• A significant challenge for a Canadian taxonomy is the treatment of Scope 3 emissions in the oil and gas sector, where indirect emissions account for approximately 70% to 90% of total emissions, while direct operations only account for 10% to 30%.
• The report identifies that most international taxonomies exclude the oil and gas extraction sector, and it warns that including new fossil fuel extraction in a transition definition is highly challenging and may conflict with IPCC findings on 1.5°C pathways.
• Best practice for defining transition activities includes ensuring they do not lead to the 'lock-in' of carbon-intensive assets and that they do not hamper the deployment of low-carbon alternatives.
• The report suggests that a Canadian transition taxonomy should incorporate a managed phase-out for 'transition away' activities based on scientific timeframes to remain credible to international investors.

APA

Boulle, B., & Wetmańska, Z. (2022). Global Financial Taxonomies Considerations for the Canadian Context. Climate Bonds Initiative. https://www.climatebonds.net/files/documents/CSA-Group-Research-Global-Financial-Taxonomies-Considerations-for-the-Canadian-Context.pdf

Chicago

Boulle, Bridget, and Zofia Wetmańska. Global Financial Taxonomies Considerations for the Canadian Context. Climate Bonds Initiative, 2022. https://www.climatebonds.net/files/documents/CSA-Group-Research-Global-Financial-Taxonomies-Considerations-for-the-Canadian-Context.pdf.

Wikipedia

{{cite report |last1=Boulle |first1=Bridget |last2=Wetmańska |first2=Zofia |title=Global Financial Taxonomies Considerations for the Canadian Context |publisher=Climate Bonds Initiative |date=July 2022 |url=https://www.climatebonds.net/files/documents/CSA-Group-Research-Global-Financial-Taxonomies-Considerations-for-the-Canadian-Context.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{boulle2022global, author = {Boulle, Bridget and Wetmańska, Zofia}, title = {{Global Financial Taxonomies Considerations for the Canadian Context}}, institution = {Climate Bonds Initiative}, year = {2022}, month = jul, url = {https://www.climatebonds.net/files/documents/CSA-Group-Research-Global-Financial-Taxonomies-Considerations-for-the-Canadian-Context.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }