1a. The first phase of taxonomy development will focus on climate mitigation. In subsequent phases of the Canadian taxonomy, which objectives should be prioritized? Please select your top choices.

• Climate change adaptation / resilience
• Protection of biodiversity and healthy ecosystems

2a. Do you agree or disagree with these proposed principles as the foundation for the taxonomy?

Agree

3. Please rate each of the principles below on a scale from “very important” to “not at all important.”

Credible

Very important

Usable

Very important

Interoperable

Important

Dynamic

Important

Regionally Specific

Important

Prioritized

Important

4a. Do you agree or disagree with the proposed partial alignment approach, which would require entities to disclose the extent to which DNSH/MSS criteria are or are not met rather than requiring full alignment with all DNSH/MSS criteria?

Disagree

4b. Please explain your answer in the space below

TIIP disagrees with a uniform partial alignment approach across all DNSH and MSS criteria. For the environmental DNSH objectives (biodiversity, water, pollution, circular economy), a disclosure-based approach may be appropriate to support usability, particularly for smaller and emerging fund managers with limited reporting capacity. However, for Indigenous rights and Free, Prior, and Informed Consent specifically, TIIP does not support a model where an activity can be designated taxonomy-aligned while disclosing that it has not obtained FPIC. The taxonomy should support FPIC for activities affecting Indigenous resources. We recommend the Council consider a differentiated approach: partial alignment/disclosure for environmental DNSH criteria, paired with a mandatory threshold for the Indigenous rights component of MSS.

5a. Do you agree or disagree with the proposed scope of objectives to be covered under the DNSH and MSS frameworks?

Agree

5b. Please explain your answer in the space below

TIIP agrees with the proposed scope of objectives covered under the DNSH and MSS frameworks. The environmental and social objectives are consistent with what TIIP's members would expect from a credible taxonomy. TIIP's concern is not with the scope of objectives covered, but with the alignment mechanism used to assess them.

We would also note that TIIP's membership includes fund managers running social-impact strategies with no climate mitigation component. As currently scoped, this taxonomy, including its DNSH/MSS safeguards, which only apply once an activity has qualified under the climate mitigation criteria — is not designed to assess or recognize these activities. We understand this reflects the taxonomy's appropriate phase-one focus on climate mitigation, and are not recommending scope expansion at this stage. However, TIIP would welcome the Council's future thinking on whether and how a taxonomy framework might eventually address social-only financial products, as this represents a meaningful segment of Canada's impact investment ecosystem currently outside the taxonomy's reach.

6a. Do you agree or disagree with the proposed approach to grounding the DNSH/MSS frameworks in Canadian legislation and going beyond existing laws and standards where necessary?

Agree

7. In which areas, if any, is it necessary to go beyond existing laws and standards for the DNSH/MSS framework?

Indigenous rights is the clearest area where the MSS framework should go beyond existing Canadian legislation to meet the standard set by the UN Declaration on the Rights of Indigenous Peoples, particularly Free, Prior, and Informed Consent.

TIIP has not consulted its membership on whether this logic should extend to other objectives (e.g., biodiversity standards, where domestic regulation may lag current science). We defer to the Council on those areas at this stage.

8a. Do you agree or disagree that different DNSH/MSS standards should apply to projects or entities of different sizes? E.g. more comprehensive disclosures required for larger projects and/or entities, with more streamlined disclosures for smaller projects and/or entities?

Agree

8b. Please explain your answer in the space below

Streamlined reporting tools for smaller entities would support broader taxonomy uptake without compromising its integrity. This differentiation should apply to how compliance is demonstrated, not to the substantive standard being met. A smaller entity or project should not face a lower bar for Indigenous rights, biodiversity, or other DNSH/MSS criteria simply because of its size; the relevant factor should be the scale and nature of the activity's potential impact, not the size of the entity financing it.

9. Are there any gaps in the proposed DNSH/MSS framework that could result in unintended environmental or social harms?

1) A partial alignment approach risks an ADDITIONALITY harm: if capital flows preferentially toward activities that can most easily demonstrate partial DNSH/MSS compliance — typically larger, better-resourced issuers — rather than toward activities with the greatest genuine impact, the taxonomy could inadvertently divert capital away from smaller, harder-to-standardize but genuinely additional opportunities. Impact investors specifically prioritize additionality — whether capital enables outcomes that would not otherwise occur — and a taxonomy that rewards legibility and disclosure sophistication over impact could work against this principle.
2) MARKET FAIRNESS harm to smaller and emerging fund managers. Larger issuers and institutions generally have more resources to navigate disclosure-based partial alignment, including producing sophisticated documentation of partial compliance. This creates a risk that well-resourced but marginally-compliant large issuers out-compete smaller, higher-impact enterprises for the taxonomy-aligned label and the capital that follows it, disadvantaging exactly the emerging managers and smaller enterprises that make up a significant part of Canada's impact investing ecosystem. Partial alignment itself is not wrong, but disclosure quality could become a proxy for compliance sophistication rather than actual impact, thus particularly disadvantaging smaller issuers who may have strong substantive practices but less capacity to produce polished disclosure documentation. TIIP recommends the Council consider streamlined, standardized disclosure templates (rather than open-ended narrative disclosure) to reduce this disparity, so that partial alignment reporting reflects substance rather than resourcing.

10. How should the taxonomy operationalize the principles of the UN Declaration on the Rights of Indigenous Peoples and, in particular, the principle of Free, Prior, and Informed Consent, in the MSS framework?

The MSS framework treat FPIC as a threshold requirement: an activity should not be eligible for taxonomy-aligned status where FPIC was required and not obtained, regardless of other criteria met.
Beyond this threshold principle, TIIP recommends the framework reflect the following:

– FPIC processes and requirements should be recognized as varying across Indigenous nations and governance systems, rather than assessed against a single standardized checklist;
– Evidence of FPIC should be verifiable by the relevant rights holders, not based solely on issuer self-reporting or disclosure; and
– Consent should be treated as an ongoing requirement that can be withdrawn or must be renegotiated if project circumstances materially change, not a one-time approval.

TIIP defers to Indigenous-led organizations and rights holders — who the Methodology Report notes will be consulted further in developing this framework — on the detailed procedural mechanics of FPIC operationalization.

12a. Do you agree or disagree with this approach?

Agree

12b. Please explain your answer in the space below

A tightly defined green category supports market credibility and gives TIIP's members confidence when marketing green-labelled funds and reporting green-aligned AUM to LPs. We would note that the credibility of this category depends significantly on how "enabling activity" guardrails are applied in practice, particularly for upstream supply chains (e.g., critical minerals) where output may not be exclusively directed toward climate solutions.

13a. Do you agree or disagree with this approach?

Strongly agree

13b. Please explain your answer in the space below

This definition and the explicit exclusion of oil and gas from the transition category should apply only where no viable alternative exists.

14a. Do you agree or disagree that the proposed guardrails for the transition category (both for the whole-of-activity and measures pathways) are sufficient to protect the science-based credibility of the category and reduce the risk of carbon lock-in, while supporting usability?

Neutral

14b. Please explain your answer in the space below

The proposed guardrails are reasonable in principle, but their sufficiency depends on specificity not yet developed.

15a. Do you agree or disagree that the taxonomy should include a third “abatement” category, as proposed, that covers demand-decline activities?

Disagree (i.e., disagree because of how category is designed)

15b. Please explain your answer in the space below

TIIP disagrees with including the abatement measures category as currently designed, though we do not take a categorical position against any possible mechanism addressing emissions reduction in Canada's oil and gas sector.

Our core concern is that a taxonomy's value depends on being a clear, defensible signal. The moment it accommodates a sector because of its economic significance rather than its alignment with climate science, it risks becoming a political compromise rather than a credible classification tool. Eligible activities must align with rapid and systemic replacement of fossil fuels, and mitigation activities with clear alternatives should not be labelled as transition.

The taxonomy's core purpose should be to contain greenwashing risk by giving the market an unambiguous, science-based definition of what counts as green or transition and to hold labelled activities genuinely accountable to that standard, not to create a third pathway that allows emissions-intensive, declining-demand sectors to access preferential capital and credibility without a credible route to full alignment. As proposed, the abatement category risks doing the opposite: lending taxonomy credibility to investments that do not resolve, and may extend, the sector's underlying misalignment with net-zero.

If the Council proceeds with developing this category in 2027, TIIP recommends the guardrails be scoped narrowly enough to distinguish genuine, bounded emissions-reduction measures (e.g., methane abatement) from investments that extend asset life or enable continued production expansion, and that entity-level accountability (not just activity-level disclosure) be required to prevent abatement-labelled capital from coexisting with unconstrained expansion elsewhere in a company's operations.

17. Is there any other feedback you would like to provide on the proposed activity classification framework?

The framework's category-sorting logic is built primarily around projected global demand trajectories (Figure 3) rather than emissions-reduction pathways directly. Given that the taxonomy's stated purpose is to identify activities that advance Canada toward net-zero, TIIP would encourage the Council to consider whether emissions-alignment criteria should serve as the primary sorting logic, with demand projections treated as a secondary or supporting consideration rather than the first-order filter, so that an activity's classification reflects the emissions reduction it actually achieves, rather than market expectations about the future of its sector.

18a. Do you agree or disagree with the proposed approach for developing technical screening criteria?

Agree

18b. Please explain your answer in the space below

TIIP agrees with the proposed approach, particularly the emphasis on quantitative metrics, forward-looking criteria, and broad engagement including with Indigenous-led organizations. We would flag one general concern: a primary focus on Scope 1 emissions, with Scope 2 and 3 addressed only "where feasible and/or material," risks understating the real climate impact of activities where downstream or upstream emissions dominate. TIIP encourages the Council to prioritize developing robust Scope 2/3 methodologies as data availability improves, rather than treating this as a lower priority.

19. Please rate each of the proposed elements for the screening criteria on a scale from “very important” to “not at all important.”

Forward-looking wherever possible

Very important

Include sunset and/or sunrise dates where relevant

Important

Revise as necessary during regular review periods

Very important

Primarily use quantitative metrics

Very important

Primarily focus on Scope 1 emissions but address Scope 2 and 3 emissions where feasible and/or material

Important

Informed by a range of robust methods

Very important

20. When thinking about the taxonomy’s credibility and usability, how technologically specific or prescriptive should the technical screening criteria be?

TIIP recommends that technical screening criteria be specific and quantitative with respect to outcomes — i.e., clear, numeric emissions-intensity thresholds and performance benchmarks — rather than prescriptive about which specific technologies or methods must be used to achieve them. This approach, consistent with the "performance in relation to greenhouse gas target" and "impact-based" metric types described in the Methodology Report, supports credibility and comparability (which TIIP's members rely on for LP reporting) while preserving flexibility for smaller managers and non-standard private transactions to demonstrate compliance through the means best suited to their specific deal, rather than being constrained to a narrow list of pre-approved technologies that may not fit their context.

TIIP also notes that overly granular, sector- and technology-specific criteria can become outdated quickly and may be harder to apply consistently to smaller, non-standard private fund transactions than to large capital markets issuances. TIIP recommends the Council ensure criteria remain usable across transaction types and sizes, not only for large, standardized issuances.

21. Do you agree or disagree with the proposed approach of focusing primarily on Scope 1 emissions, and addressing Scope 2 and 3 emissions where feasible and/or material?

TIIP is broadly supportive of this approach given practical data availability constraints, but is concerned it may understate real climate impact for activities where Scope 2 or 3 emissions dominate.

22. Overall, how satisfied are you with the proposed sustainable finance taxonomy framework?

Neutral

23. Is there any other feedback you would like to provide on the methodology report as a whole that has not already been covered?

Process note on this submission: TIIP represents impact fund managers across Canada. Given the compressed comment window for this methodology consultation, we have not been able to conduct full consultation with our membership on several of the more consequential design questions in this draft — particularly the abatement measures category, the FPIC/MSS operationalization questions, and the eventual sector-specific technical screening criteria. Where reflected above, our responses draw on TIIP's existing public commitments, research and staff-level analysis. TIIP intends to consult its membership ahead of the fall 2026 technical screening criteria comment period and the 2027 abatement measures engagement process, and looks forward to providing more detailed, member-informed input at those stages. We welcome the opportunity to engage further with the Council and Institute as this work progresses.