What We Learned:  Five Lessons from the Sustainable Finance Taxonomy’s First Public Feedback Period

Marlene Puffer, Chair, Taxonomy and Transition Planning Council

This past summer—from July 9 to August 13, 2026—Business Future Pathways ran its first public feedback period on the development of a made-in-Canada sustainable finance taxonomy.  The focus:  the draft Methodology Report, which—once finalized—will lay the foundation and set the direction for the taxonomy itself.  The feedback period was a critical opportunity to hear a broad range of perspectives on the taxonomy’s core proposals: its ambition and principles; categories and definitions; social and environmental safeguards; and the development of technical criteria for sector-specific guidance. 

Today, we released a What We Heard report summarizing the input we received on these important questions through public submissions to our online portal, Indigenous perspectives briefings, as well as through our own internal review process (involving 70 advisors with financial, climate, and governance expertise). I encourage you to read this report, as the insights it captures will meaningfully inform the taxonomy’s final Methodology Report, to be released later next month. 

For the Council, the value of this first public feedback period rests not only in the input we received, but also in what we learned through the process. Here are our five big takeaways—lessons we will build on as this work continues. 

Lesson 1:  There is broad support for a Canadian taxonomy—and a collective determination to get it right

In launching this public feedback process, the Council aimed to relay the importance of this Methodology report and the essential role of broad public input.  We sought to promote transparency, a clear understanding of what was being proposed, and to make participation relatively easy and accessible.

The response exceeded our expectations.  Business Future Pathways received close to 200 written responses from organizations and individuals across Canada and beyond—twice as many as we expected based on engagement in other jurisdictions. The fact that over 40% of submissions were made by individuals is significant and inspiring.  It signals—and reminds the Council—that this work matters not only to financial and technical experts, but also to the broader public, all of whom have a strong stake in the taxonomy’s climate and economic outcomes. 

Lesson 2:  We don’t need to reinvent the wheel, but we do need to fine tune it for Canadian conditions

Canada has strong international examples and lessons to draw on as we build our own taxonomy. Overwhelming public support for fundamental elements of the draft methodology—the taxonomy’s principles, green and transition categories, and approach to technical screening criteria—shows that building on what already works well in the global context has put us on the right path.

However, there’s a difference between “building on” and “replicating.”  Our task is to determine where and how to make meaningful adjustments that address Canada’s reality and landscape. For example, in proposing to build regional flexibility directly into the taxonomy’s design, we are deliberately taking a road less traveled. Recognizing the materially different conditions that Northern, rural, and Indigenous communities face in Canada is an important signal about the practicality and inclusivity of the tool we are seeking to build.  

Lesson 3:  Tradeoffs across credibility, usability, and interoperability are inevitable. Going back to basics can help navigate these questions. 

The draft Methodology Report sparked a robust discussion around the proposal to allow for partial alignment rather than mandatory (i.e. strict yes or no) alignment with environmental and social safeguards and legal rights. Some were of the view that, for activities to be considered taxonomy aligned, they must first demonstrate compliance with Indigenous rights and the highest environmental standards. Others warned that setting the taxonomy’s standards higher than what is defined and required under law would pose significant barriers to users. Research on global taxonomy uptake shows that highly stringent social and environmental safeguards with mandatory alignment tend to result in lower taxonomy adoption, i.e. reduced usability.

This is one of the key areas where the inevitable tradeoffs across three of the taxonomy’s principles—credibility, usability, and interoperability—became apparent during the public feedback period. We can think of these principles as interlocking rings, fully interdependent on each other. So how do we address situations where they appear to be in conflict?

The Council has navigated that question by returning to the taxonomy’s core function: to create the market clarity that enables investors to make more informed climate-aligned capital allocation decisions. We keep in mind the taxonomy’s jurisdiction and limitations as a voluntary tool—one that is designed to complement and work alongside other sustainable finance frameworks and policies.  Ultimately, it is Council’s job to manage the tradeoffs across these three principles, to ensure Canada’s taxonomy meaningfully balances all of them. The taxonomy is an evolving tool and these are decisions that need to be revisited in light of the feedback received and should continue to be reviewed over time. 

Lesson 4:  Whether, and how, to address fossil fuel emissions in Canada’s taxonomy remains the most challenging question. It’s our responsibility to grapple with it with a focus on the taxonomy’s ambition and principles. 

The strongest concerns expressed through public comments centred on the proposed abatement category. This proposal is a new, untested idea in its early stages—one that currently has more questions than answers about if and/or how it would work.  

At its core, this question is not simply about a third category, but about the broader consideration of activities with high fossil fuel emissions, and where they may or may not fit within Canada’s sustainable finance taxonomy. The Council is committed to addressing these legitimate questions thoughtfully, and in a way that is consistent with the taxonomy’s  principles and ambition, anchored in the Paris Agreement—while maintaining momentum. And it’s clear we have more work to do to inform a final decision on this category. 

It is worthwhile considering the role of efforts to reduce Canada’s largest source of emissions within a climate-mitigation taxonomy. But we need to carefully consider how those emissions can be addressed without locking in additional emissions or expanding fossil fuel production.

Listening closely to the feedback we received about the abatement category, we noticed that those who fundamentally disagree with it and those who conditionally support it share very similar concerns.  Both groups emphasize the importance of designing a credible, usable, interoperable taxonomy that achieves its ambition to meet Canada’s net-zero-by-2050 target in alignment with climate science. The Council views this ambition as the unifying goal and ultimate litmus test for making a final decision about the abatement category that balances the taxonomy’s key principles. 

Lesson 5:  Trust will be the greatest determinant of the taxonomy’s success, and that includes and extends beyond the process of developing it. 

From inception, the Council recognized the importance of building trust in the taxonomy design process. That imperative underpins our governance structure, transparency measures, our open and ongoing public communication, and the importance of public feedback throughout each step in the taxonomy’s development. 

The Council recognizes that trust in our work must be continually earned.  We welcome feedback on the process to date, and we know the credibility of a voluntary tool rests not only on the rigour of its design and the quality of its criteria, but also on how it is applied. Taxonomy users are therefore essential to its success. The key takeaway: a credible taxonomy can help address greenwashing concerns, but it cannot substitute for industries earning and maintaining the public’s trust through their own actions.  

This is also why  taxonomies serve as one part of a broader sustainable finance architecture—supported by, and reinforcing, complementary measures such as corporate disclosure and credible transition plans.

A final note of gratitude (and reminder to mark your calendar!)

However you participated in this process, thank you. We feel a deep sense of gratitude to all of those who took time out of their busy lives to thoughtfully consider the proposals offered in the draft Methodology Report and to share their thoughts and feedback. That applies equally to those who endorsed the proposals and those who challenged them (as well as the multitude who did both!). Healthy debate and discussion is key to the goal of developing a robust and durable Canadian taxonomy—we are confident that we are on that path. 

We look forward to sharing the final version of this report with you next month, which will include a summary of how your input shaped our decisions. For those who like to plan ahead, I encourage you to register today for a live, online  walkthrough of the Final Methodology Report on October 20th. See you then!