In the face of climate disasters and growing demand for clean technologies, Canadians are calling for a resilient, low-carbon economy that supports rising living standards. Economies run on information. To weather an uncertain future, everyone – from corporate leaders to regulators – needs consistent, reliable climate data to guide investment and policy decisions.
However, Canada’s climate-data landscape remains fragmented, limiting the country’s ability to manage the transition effectively. Without clear rules and consistent data, companies are reluctant to act, policymakers cannot create the enabling conditions, and investors and other stakeholders lose confidence.
The recent anti-greenwashing law and the subsequent withdrawal of sustainable finance commitments by a Canadian bank and pension fund highlight the fault lines in our climate-information system.
To move forward, Canada needs better data and a better system – a climate-information architecture – for using it.
What is a climate-information architecture?
Today, climate-related information such as a business’s physical risk exposure or the extent to which its spending aligns with a low-carbon transition is often incomplete, inconsistent or inaccessible. Without trustworthy data, companies cannot track their progress, financial institutions cannot assess climate risks from their assets, and regulators cannot enforce credible standards. The result is uncertainty and delayed action.
To fix this, Canada needs a national climate-information architecture: a system for generating, aligning and sharing climate-related information across the economy. It is a decision-making system built on five essential building blocks: transition plans, scenario analysis, disclosures, taxonomy and data and analytics.
It is important to recognize that each building block supports the others. Together, they create a shared foundation of useful information that boosts market confidence and safeguards financial stability across the economy. Without alignment, the whole system falters.
Progress is happening, but it is slow and misaligned
Canada has made headway, developing a taxonomy governance structure, piloting scenario analysis exercises and introducing made-in-Canada reporting standards. But we’re falling behind on coordinated implementation.
One key barrier is fragmented leadership. Implementing a national architecture requires coordination across federal and provincial governments, regulators, standard setters and industry. Each operates under different mandates and timelines.
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For instance, the Office of the Superintendent of Financial Institutions (OSFI) has issued climate-risk-management guidelines for federally regulated financial institutions. Yet progress on climate disclosure requirements has stalled for public and private companies after the Canadian Securities Administrators paused efforts to mandate consistent reporting. This type of misalignment creates data gaps, weakens accountability and slows momentum.
Removing misalignment can reduce the cost of doing business
Removing impediments to the functioning of the climate-information architecture can reduce the cost of doing business and enhance the economic transition. For example, regulators like the Competition Bureau need clear benchmarks to define what counts as a green or transition-friendly activity to enforce green marketing claims. A government-backed taxonomy would support that objective while allowing companies to navigate the rules more effectively, thus reducing costs associated with doing business during the transition.
Similarly, with credible transition planning and scenario analysis, financial institutions can evaluate the vulnerability of their holdings to climate risks. Regulators like the OSFI can get the information to stress-test climate-related shocks and protect the financial system against systemic risks. According to a study from the University of Oxford, better disclosures of plans and scenarios translate into lower costs of loans for borrowers.
These examples underscore the urgent need for alignment and coherence across Canada’s climate-information system.
Align the architecture through coordinated leadership
To build climate-information architecture as a connected system, not a patchwork of disconnected tools, Canada needs to standardize and mandate key tools such as disclosures and transition plans where necessary. It also needs to foster public–private partnerships in areas such as the taxonomy and scenario analysis to ensure system-wide integration.
Governments, regulators, standard setters, industry groups, civil society and academia all have a role to play. They need to recognize their role, collaborate on addressing challenges and jointly build these tools to finalize and implement the national climate-information architecture.
A stronger information system will lead to better policy outcomes
Alignment is the first step to bringing high-quality climate data into the mainstream of policymaking and investment decisions, where it belongs. For example, the taxonomy could serve multiple uses such as defining benchmarks for clean-economy investment tax credits and green procurement practices and guiding issuances of green and sustainability-linked bonds. Transition plans could provide forward-looking insights to monitor systemic climate risks in the financial system.
By establishing a coherent climate-information infrastructure, Canada could reduce implementation cost, accelerate the transition and reinforce trust, thus laying the foundations to become a climate-resilient, competitive and prosperous nation.
Anik Islam is a senior research associate at the Smart Prosperity Institute.
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