August 15, 2025

By Anik Islam

To keep Canada’s economy competitive, we need more than just ambition. We must tackle today’s climate-related risks—such as damaging extreme weather events—while also seizing economic opportunities like manufacturing clean technologies for electric vehicles and water electrolyzers for green hydrogen. To achieve these objectives, Canada needs high-quality, climate-related financial information to guide policy and investment decisions across the economy.

A strong climate information architecture (CIA) helps organizations collect, manage, analyze and share this information using five tools: transition plans, scenario analysis, taxonomies, disclosures, and data and analytics.

While Canada has implemented some of these elements, we should shift from focusing on individual tools to building an overall climate information system. Only then can Canada lower costs for businesses, unlock economic opportunities and accelerate the transition to a clean, climate-resilient and competitive economy.

Where is the system falling short?

Our policy brief Aligning Canada’s Climate Information Architecture argues that the five building blocks of a CIA must work together as one system. We can achieve this by standardizing the tools, taking regulatory actions such as mandating the disclosure of climate-related financial information, and forging public-private partnerships.

Existing efforts to build alignment in the architecture are fragmented. Organizations such as regulators and supervisory bodies are implementing these tools independently because of their different mandates, timelines and approaches.

For instance, the Office of the Superintendent of Financial Institutions has issued climate-risk-management guidelines and disclosure requirements for federally regulated financial institutions. Yet, there is no equivalent requirement for publicly listed companies because the Canadian Securities Administrators paused efforts on mandatory climate reporting. To date, private companies in Canada do not have regulatory requirements or guidance.

Misalignment or regulatory gaps between these implementing agencies create data deficiencies across the economy. For example, a bank may report detailed data on the GHG emissions tied to its lending. However, if the borrowers do not measure and report their own emissions consistently, the bank’s figures are likely to be incomplete and based on inaccurate estimates.

These gaps lead to inaccurate assessments of climate-related financial risks and opportunities and add to costs for businesses. Moreover, the abovementioned domestic regulatory gaps and policy uncertainty causes us to diverge from international partners and slow our progress towards a sustainable, competitive economy.

This situation shows that we need a coordinated system that fills regulatory gaps, encourages institutions to collaborate, and enables the flow of climate-related financial information across Canada.

Paths to implementation

There are a number of ways to build alignment. Canada can learn how to implement its CIA from international jurisdictions that are leading in the sustainable finance space:

• The European Union (EU) has adopted a regulatory framework, built around the EU taxonomy, the Sustainable Finance Disclosure Regulations, the Corporate Sustainability Reporting Directive and other tools. These tools clarify for stakeholders—such as regulators, standard setters, financial institutions and companies—what constitutes sustainable activities so they can invest confidently in truly sustainable projects.
• Australia, via the Australian Sustainable Finance Institute, has developed an implementation roadmap. It outlines specific actions (either new measures or on an ongoing basis), assigning responsibility to participants in the financial system who are best placed to lead. It also explains how to collaborate with other stakeholders such as governments, regulators and standard setters, and provides clear timeframes for completion.
• The United Kingdom (UK) has adopted a strategy-based approach. It outlines actions the government can take to align its sustainable finance system, increase financing across its economy and meet international development requirements.
• Japan has incorporated a mix of regulatory, principles-based, and soft-law approaches. Different government ministries, agencies, institutional investors and economic organizations have developed regulations, set up working groups and published voluntary and regulatory guidance within their jurisdictions. These efforts encourage financial institutions, large institutional investors and companies to integrate sustainability into their current practices.

Principles to achieve success

The examples above show that countries have taken different approaches, each shaped by their unique institutional settings and policy priorities. Rather than looking for a one-size-fits-all model, Canada can pick out the common threads of commitment, collaboration and adaptability to implement its CIA.

1) Commitment: Leading jurisdictions set timelines or phases for action, which helps align public and private efforts and reduce policy uncertainty.

Relevant Canadian stakeholders such as the federal government, provincial and territorial governments, regulators, standard setters, industries, civil society and others need to work together to develop timeframes for implementing existing recommendations.

Broader commitments should also include actions to quickly develop a taxonomy, build a climate data strategy and close regulatory gaps for climate-related financial disclosures and transition plans.

2) Coordination: Whether driven by regulation, strategies, roadmaps or principles-based approaches, leading jurisdictions ensure strong stakeholder coordination to create, implement and monitor each component of the architecture.

The federal government can leverage existing coordination procedures under the Treasury Board Secretariat and Intergovernmental Affairs Secretariat to engage and share information with provincial and territorial partners to implement measures such as mandatory climate-related financial disclosures.

Existing finance and civil society-backed initiatives such as Climate Engagement Canada and Business Future Pathways can serve as important coordination platforms to complement public-sector efforts. These initiatives can offer practical guidance, investor and business insights and strengthen accountability on implementing regulations.

3) Adaptability: Climate-data needs and the prevailing economic context change quickly. Leading jurisdictions tend to include mechanisms for iteration and feedback through regular reviews and updates to frameworks.

For example, the EU is trying to reduce regulatory burden after receiving feedback on the state of its economic competitiveness. Similarly, the UK conducted consultations to assess the effectiveness and impacts of its sustainable finance tools and made efforts to adjust to market developments and implementation-related challenges.

As Canada moves forward with implementing different parts of the CIA, policy makers and other stakeholders may want to adopt some of these practices (e.g., post-program performance evaluation, periodic stakeholder consultation surveys) to ensure that the system is responsive, relevant and effective over time.

Next steps

Aligning the pieces of the CIA is not just a technical exercise, it is a strategic one. With climate risks rising and investment opportunities growing, Canada needs an architecture that delivers on commitment, focuses on coordination and adapts to ongoing changes.

By applying lessons from global leaders and committing to processes that align, coordinate and adapt, Canada can build a system that turns good information into smarter policy, better investment and a more climate-resilient, competitive economy.