Canada Selects Canadian Climate Institute to Lead Sustainable Investment Guidelines Development

Government Initiative to Mobilize Capital

The Government of Canada announced on December 18, 2025, the selection of the Canadian Climate Institute to lead the development of made-in-Canada sustainable investment guidelines. This initiative, often referred to as a taxonomy, is designed to accelerate the mobilization of both public and private capital towards Canada's net-zero transition. The announcement was made by the Honourable François-Philippe Champagne, Minister of Finance and National Revenue.

The guidelines are intended to provide clarity and consistency for financial markets, helping investors, lenders, and other stakeholders credibly identify investments that align with Canada's climate objectives.

Role of the Canadian Climate Institute and Business Future Pathways

The Canadian Climate Institute, a government-funded independent think tank, will collaborate with Business Future Pathways, an investor-led initiative, on this significant undertaking. Their joint effort will involve establishing a robust and independent governance structure to oversee the development of science-based taxonomy criteria and engage stakeholders.

A new independent Taxonomy Council will be formed to review and ultimately approve the investment guidelines. This council will comprise independent experts and representatives from academia, the financial sector, civil society, climate scientists, and Indigenous communities.

Defining 'Green' and 'Transition' Investments

The forthcoming guidelines will be a voluntary market tool, built on scientific principles and designed to align with global best practices and existing international taxonomies. A key aspect of Canada's approach is the inclusion of both 'green' and 'transition' categories. The 'transition' category is particularly notable as it aims to guide investments in emissions-intensive sectors, such as oilsands projects, towards reducing their environmental impact and achieving decarbonization.

Jonathan Arnold, Director of Sustainable Finance at the Canadian Climate Institute, stated, 'The new sustainable investment guidelines will give Canada what investors have been asking for: a clear, credible, science-based system for identifying which activities in the economy are aligned with the country's climate and competitiveness goals. Crucially, Canada's guidelines will not just focus on defining clean technologies and investments—they will be designed to help transform emissions-intensive sectors that are central to the national economy, and guide credible pathways for them to compete in a low-carbon world.'

Timeline and Objectives

The development of these guidelines is expected to proceed in phases. The Taxonomy Council is anticipated to finalize investment guidelines for three priority sectors by the end of 2026, with an additional three sectors covered by Fall 2027. Initial focus areas may include sectors such as electricity, transportation, buildings, agriculture and forestry, manufacturing, and extractives.

Minister Champagne emphasized the importance of this initiative, stating, 'To grow our economy and meet the 2050 net-zero target, Canada must mobilize more private capital to build the 21st century clean economy. Financial markets demand clear, common standards defining science-based 'green' or 'transition' investments. Today's selection of the Canadian Climate Institute, working with Business Future Pathways, accelerates achieving that essential clarity for our nation.' This move builds upon previous efforts, including the work of the Sustainable Finance Action Council and its 2023 Taxonomy Roadmap Report.