Sustainable Finance Taxonomy: An Opportunity to Fully Integrate Biodiversity

The draft version of the Canadian Taxonomy for Sustainable Finance is now open for public comment.

This taxonomy aims to steer investments toward activities compatible with the climate transition by establishing common criteria for identifying economic activities that contribute to Canada’s climate goals.

The proposed version states that the integration of biodiversity will be addressed in the next phases of the taxonomy’s development.

Our RESPONSE

Climate change and biodiversity loss are two deeply interconnected crises. A sustainable finance taxonomy designed to guide long-term investments must take this interdependence into account from the very earliest stages of its development.

The “Do No Significant Harm” principle is an important safeguard, but it is not sufficient to direct capital toward activities that actively contribute to the protection and restoration of biodiversity.

We believe that a credible taxonomy must go beyond an approach focused solely on avoiding negative impacts. It must also recognize activities that generate measurable environmental benefits, while maintaining high standards for environmental protection, social responsibility, and respect for the rights of Indigenous peoples.

In our response to the consultation, we recommend, in particular, that:

• biodiversity be made a priority in the next phase of the taxonomy’s development;

• explicitly recognize nature-based solutions;

• integrate biodiversity criteria from the outset when developing technical criteria for the forestry, agriculture, and critical minerals sectors;

• reserve the term “green” for activities that contribute to both climate change mitigation and biodiversity protection;

• ensure that the pursuit of simplicity and usability does not come at the expense of robust environmental, social, and Indigenous peoples’ rights safeguards.

The public consultation conducted by Business Future Pathways and the Climate Institute of Canada is open until August 13: https://www.businessfuturepathways.ca/fr/consultations/taxonomie-de-la-finance-durable-ebauche-de-rapport-sur-les-methodes-et-les-cadres-soumis-aux-commentaires-publics/