Key Impact Points:

• Investing in Net-Zero: Canada needs between $125 billion and $140 billion annually in green investments to hit its 2050 net-zero target.
• New Guidelines and Disclosures: The government will introduce Made-in-Canada sustainable investment guidelines and mandatory climate disclosures for large private companies.
• Boosting Transparency: These measures aim to foster investor confidence, combat greenwashing, and accelerate the flow of private capital into sustainable projects.

Canada’s Net-Zero Plan Takes Shape

The Canadian government has advanced two significant sustainable finance initiatives to ensure the country meets its ambitious net-zero emissions target by 2050. At the Principles for Responsible Investment conference in Toronto, Deputy Prime Minister and Minister of Finance, Chrystia Freeland, announced the development of Made-in-Canada sustainable investment guidelines and mandatory climate disclosures for large federally incorporated private companies.

A Clear Path for Sustainable Investments

To drive investment in a net-zero economy, Canada’s new sustainable finance guidelines will provide a credible classification system for “green” and “transition” investments. These voluntary guidelines will help investors identify job-creating opportunities, from building electric vehicle batteries to generating clean energy, all while aligning with the goal of limiting global warming to 1.5°C above pre-industrial levels.

“Today’s release of sustainable investment guidelines will accelerate the flow of private capital into Canada, creating good jobs and advancing progress to net-zero emissions by 2050,” said Chrystia Freeland.

Mandatory Climate Disclosures to Foster Transparency

In addition to sustainable investment guidelines, the government will mandate climate-related financial disclosures for large private companies. These disclosures will help investors understand how businesses are managing climate-related risks, ensuring that capital is allocated towards climate-aligned activities.

The government plans to amend the Canada Business Corporations Act to make these disclosures mandatory, with specific regulations under development to determine their scope. While small- and medium-sized businesses are exempt, they are encouraged to voluntarily adopt similar climate disclosures.

“Creating a financial system that is sustainable and globally competitive is essential for Canada’s economic future,” said Ryan Turnbull, Parliamentary Secretary to the Deputy Prime Minister.

Related Article: Canada Releases New Corporate Greenwashing Regulation into Law

Tax Incentives and Private Capital

To attract the substantial private capital needed to reach its climate goals, the federal government has already put in place a $93 billion suite of tax credits, alongside its broader $160 billion net-zero economic plan. These incentives aim to fuel investments in key areas like carbon capture, clean energy, and electric vehicles.

With the introduction of climate disclosures and clear investment guidelines, Canada is positioning itself as a leader in the global race to net-zero.

“These initiatives will help mobilize needed private sector financial flows and give investors the clear direction they seek,” said Steven Guilbeault, Minister of Environment and Climate Change.

Conclusion

Canada’s sustainable finance guidelines and mandatory climate disclosures signal the government’s commitment to mobilizing the private sector in the fight against climate change. With these measures, Canada is setting the stage for economic growth, job creation, and a resilient future—one that aligns with its Paris Agreement goals and reinforces its position as a trusted partner in the global net-zero economy.