Canada's Business Future Pathways released a draft methodology for the country's sustainable finance taxonomy that includes a new abatement category for oil and gas production. Unlike most taxonomies that exclude fossil fuel activities, this one would allow investments in emissions reduction measures for upstream oil and gas, with guardrails to prevent carbon lock-in. The public comment period runs through August 13, 2026. The proposal has drawn criticism from environmental groups who argue it could confuse investors and undermine the taxonomy's credibility. The draft includes conditions such as limiting investments to existing assets, requiring significant Scope 1, 2, and upstream Scope 3 reductions, and mandating decommissioning timelines. The Canadian Taxonomy and Transition Planning Council is prioritizing guidelines for electricity, buildings, and transportation by end of 2026.
