This fall marks five-years since Environmental Defence founded our climate finance policy program. In 2021, when we launched the program, sustainable investing was a booming concept and was not matched by guardrails that could support its integrity. Few people in Canada had considered the necessary rules or regulations, identified the potential contradictions, or developed a comprehensive plan for rigour in sustainable finance. Our program aimed to deliver all of this.

Over the past five-years there has been progress in Canada. Below, we highlight the five biggest accomplishments achieved to date and what will come next for each of them. 

Progress and accomplishments:

  1. In 2022, the Roadmap for a Sustainable Financial System was published by Environmental Defence, Ecojustice and Shift to outline a comprehensive system of rules and policies for Canada to align its financial system with the goals of the Paris Agreement. We identified climate transition plans as a core policy and have worked over the past five years to ensure governments deliver these recommendations.
  2. In March 2022, the Climate-Aligned Finance Act (CAFA) was introduced in the Canadian Senate. Senator Rosa Galvez drafted the bill collaboratively, and it was endorsed by over 150 organizations and individuals from financial institutions, civil society and academics, and former regulators. Hundreds of Canadians wrote to Senators directly to encourage study of the bill, and as a resu;t the Senate invited experts including Environmental Defence and Prime Minister Mark Carney (before his role as Prime Minister) to discuss and debate the bill. Following the most recent Canadian elections, Senator Galvez reintroduced the bill in October 2025.
  3. During 2023 and 2024, Parliament completed two first-of-its-kind studies on the relationship between climate change and the financial system – studying both how finance contributes to climate change, and how climate change creates risks for finance. The landmark studies resulted in a government committee publishing a package of recommendations, including implementing CAFA and requiring climate transition plans.
  4. Transition plans were introduced to the Canadian sustainable finance dialogue, as a policy which would ensure companies and financial institutions develop credible plans to reduce their emissions. Environmental Defence helped contribute to founding Business Future Pathways in 2025, an organization with a dual mandate to advance transition plans and a sustainable finance classification system in Canada.
  5. Twenty Members of Parliament endorsed a motion to encourage the government to “use all legislative and regulatory tools at its disposal to align Canada’s financial system with the Paris Agreement”. This was a key moment where elected officials from four political parties collaborated to advance addressing the impacts from the financial system on climate progress.

This progress leaves a foundation to build on for the rest of this year and the one to come. In terms of implementing sustainable finance policies, Canada remains less advanced than global trading partners. 

In these same five areas of work, here is what is next:

  1. As Canada strengthens global partnerships outside of the United States, advancing sustainable finance policies makes even more sense. Global peers like the European Union are much more advanced. Canada is shifting its economic anchor, in a way which makes it competitive to catch up with new partners on climate-related financial policies rather than worry about getting too far ahead of the U.S.
  2. The Climate-Aligned Finance Act (CAFA) remains active in the Canadian Senate, and was included as part of the policy platform of one federal party during the last election. We anticipate the reintroduction of a parallel bill by elected officials in the House of Commons, or a renewed debate of the bill in the Senate.
  3. One of the two government studies, the one led by the Committee on Environment and Sustainable Development, made specific recommendations which were sent to the leading Ministers on the file. These recommendations, however, have not yet been discussed on the main floor of Parliament. Members of Parliament have the opportunity to ensure the full Parliamentary debate happens in the months to come, with a chance for all elected officials to analyze and discuss the study’s result. This one will be exciting.
  4. The government mandated Business Future Pathways to publish a taxonomy that identifies how to align six business sectors with net-zero. Environmental Defence outlined how to prioritize credibility for when the analysis of the six sectors is published in 2027. We expect parallel guidance on climate-related transition plans that contribute to aligning the economy with the goals of the Paris Agreement. 
  5. Building directly on the proposal from past Members of Parliament to advance climate finance policy, there is a renewed launch to “align Canada’s financial system with our climate commitments”. We anticipate more engagement from across political parties on this new parliamentary motion in the months ahead. 

Two factors guide our work. First, the Canadian financial system invests still too much into pollution and not yet enough into climate solutions. Second, the financial system is not designed to voluntarily change in the correct direction at the pace that is needed. Climate-related financial policy fills a big piece of Canada’s climate puzzle. Over the past five years we have made strides to fill the gap. More progress will come. A heartfelt thank you to the thousands of collaborators and supporters who have joined us in this work.