Taxonomy Foundations
Please feel free to answer only the questions that are of the most interest and relevance to you.
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
- Pollution prevention and control
- Circular economy
It is proposed that the design and implementation of the Canadian taxonomy be informed by the following six principles: Credible; usable; interoperable; dynamic; regionally specific; and prioritized.
2a. Do you agree or disagree with these proposed principles as the foundation for the taxonomy?
Agree
2b. Please share the reason for your answer in the space provided
The principles are appropriate. The critical balance is credibility versus practical usability for complex industrial facilities with differing technologies, long-term investment arc, data maturity and regional constraints. The principles of credibility and usability are especially important for transition sectors such as steel, where the taxonomy must be scientifically robust but also workable for existing facilities undertaking complex, multi-year decarbonization pathways.
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
- Very important
- Dynamic
- Very important
- Regionally Specific
- Very important
- Prioritized
- Very important
Do No Significant Harm and Minimum Social Safeguards
Please feel free to answer only the questions that are of the most interest and relevance to you.
The proposed taxonomy framework for Canada includes a set of Do No Significant Harm (DNSH) criteria and Minimum Social Safeguards (MSS), which will be designed to ensure that climate mitigation objectives do not adversely impact other environmental and social values, or legal rights. It is proposed that issuers must disclose the extent to which they meet specific criteria for both DNSH and MSS in order to claim taxonomy alignment.
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?
Agree
4b. Please explain your answer in the space below
Generally support the proposed partial alignment approach, provided it is transparent, credible, and designed to encourage continuous improvement. A binary pass/fail approach may be too rigid for complex industrial facilities and could unintentionally prevent otherwise beneficial decarbonization projects from receiving transition finance.
For example, a major emissions-reduction project at an existing steel facility may produce substantial climate benefits while also requiring phased work to address broader environmental, social, or reporting considerations. A partial alignment model would allow users to disclose where criteria are met, where gaps remain, and what actions are being taken to address those gaps.
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
Generally agree with the proposed scope of the DNSH and MSS frameworks, including environmental objectives such as climate adaptation, biodiversity, water conservation, pollution prevention and control, and circular economy, as well as social safeguards related to Indigenous rights, human rights, labour standards, corruption and bribery controls, and taxation integrity. However, we would encourage a practical implementation approach that recognizes existing Canadian laws, permits, approvals, labour standards, and regulatory oversight and avoids minor inconsistencies among current/existing reporting and compliance obligations and duplication of work. For regulated industrial facilities, many of these areas are already subject to significant federal, provincial and territorial, and municipal requirements.
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
6b. Please explain your answer in the space below
Partially agree. Support grounding the DNSH and MSS frameworks in Canadian legislation, regulation, and institutional practice. This is important for credibility, consistency, and usability.
Be cautious about going beyond existing laws and standards except where there is a clear, material, and well-justified need.
7. In which areas, if any, is it necessary to go beyond existing laws and standards for the DNSH/MSS framework?
Recommend caution in going beyond existing Canadian laws and standards.
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
Expectations should be proportionate to project size, entity size, and materiality of potential impacts. Large industrial projects should be expected to provide more comprehensive disclosure than smaller, lower-risk projects, but the requirements should remain clear, practical, and aligned with existing reporting systems and compliance obligations.
9. Are there any gaps in the proposed DNSH/MSS framework that could result in unintended environmental or social harms?
Clarify cumulative impacts, supply chains, remediation, community effects and recognition of existing controls. Avoid overly complex or binary requirements that delay high-impact industrial decarbonization; allow disclosure, remediation and continuous improvement for non-critical gaps.
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?
Support consideration of Indigenous rights within the MSS framework. For existing industrial facilities, the taxonomy should distinguish between routine operational improvements, lower-risk transition measures, and major projects with potential rights-related impacts. This distinction will be important to ensure the framework is credible without creating unnecessary barriers to emissions-reduction investment.
11. Is there any other feedback you would like to provide on the proposed MSS/DNSH framework?
Use common templates, sector-specific examples and recognition of credible existing management systems. Safeguards should support credible outcomes without creating reporting burdens that discourage investment.
Section 3: Activity Classification Framework
Please feel free to answer only the questions that are of the most interest and relevance to you.
The activity classification framework proposes that the green category should be limited to activities with zero or near-zero emissions that make a substantial contribution to climate change mitigation or to activities that directly enable zero to near-zero emissions climate solutions (e.g., electric vehicle manufacturing facilities)
12a. Do you agree or disagree with this approach?
Agree
12b. Please explain your answer in the space below
Agree in principle. Preserve a credible green category, while ensuring essential industrial materials such as steel can receive recognition under the transition category when they demonstrate credible decarbonization.
The framework proposes that the transition category should include activities that have materially high emissions today but have the potential to decarbonize sufficiently to align with the green definition (i.e., zero to near-zero emissions) by 2050. These activities are likely to experience stable or growing demand in Paris-aligned representative pathways due to a lack of technically feasible low-carbon substitutes (e.g., major decarbonization investments in steel, cement, and chemicals manufacturing).
13a. Do you agree or disagree with this approach?
Strongly agree
13b. Please explain your answer in the space below
Strongly agree. It is essential for hard-to-abate sectors such as steel that remain necessary in a net-zero economy. It can mobilize capital for electrification, scrap use, fuel switching, efficiency, DRI/EAF, hydrogen readiness and carbon capture.
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?
Agree
14b. Please explain your answer in the space below
Generally yes, subject to refinement. Guardrails are necessary to protect the credibility of the transition category and reduce the risk of carbon lock-in. However, the guardrails must be carefully designed so they do not unintentionally exclude practical, credible decarbonization pathways for existing steel facilities. Recommend that the taxonomy developers work closely with the Canadian steel sector before finalizing guardrails and technical screening criteria.
The report proposes that initial research on the abatement measures category should be conducted in 2027 and include select emissions-reduction measures for activities that have high Scope 1 emissions today and are unable to achieve the life cycle emissions reductions necessary to align with Paris-aligned pathways (e.g. major decarbonization investments in the upstream production, refining, and distribution of oil and gas). These are activities that are highly likely to experience declining demand as the world transitions to clean energy and alternative technologies.
15a. Do you agree or disagree that the taxonomy should include a third “abatement” category, as proposed, that covers demand-decline activities?
Prefer not to answer
The report proposes an illustrative list of guardrails for the abatement measures category that, if formally developed and finalized, would be designed to prevent carbon lock-in and ensure the abatement measures category remains credible within a Paris-aligned framework. When thinking about the taxonomy’s credibility and usability, please provide feedback on this illustrative list of guardrails.
16. Should any additional guardrails be considered?
Supports strong guardrails for the abatement measures category, as the report identifies this category as novel and potentially higher risk from a carbon lock-in perspective. Also recommend that the taxonomy clearly distinguish abatement measures from transition measures. Transition measures in steel should not be treated as equivalent to abatement measures in demand-decline sectors, because steel has a different role in a net-zero economy.
17. Is there any other feedback you would like to provide on the proposed activity classification framework?
Generally, supports the proposed Activity Classification framework, particularly because it recognizes three distinct categories: green, transition, and abatement measures. This structure is more useful for Canada than a green-only taxonomy because it recognizes the need to finance decarbonization in emissions-intensive sectors that remain essential to a net-zero economy.
Section 4: Technical Screening Criteria
Please feel free to answer only the questions that are of the most interest and relevance to you.
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
Agree with the proposed approach, including the use of energy system modelling, literature reviews, jurisdictional analysis, policy analysis, and engagement. These methods are appropriate, provided they are supplemented by direct sector-specific consultation with steel producers, technical experts, equipment providers, electricity providers, regulators, and financial institutions.
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
- Very 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?
Recommends that technical screening criteria be primarily performance-based and technology-neutral, rather than overly prescriptive.
For the steel sector, prescribing one preferred technology pathway could unintentionally exclude credible decarbonization options or create barriers for existing facilities. A technology-neutral approach would allow companies to pursue the most feasible and effective pathway based on their asset base, energy context, feedstock availability, and capital planning.
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?
Agree with the proposed approach. A primary focus on Scope 1 emissions is appropriate for industrial transition criteria because these emissions are most directly under the operator’s control and are central to facility-level decarbonization. For steel, Scope 2 emissions depend heavily on electricity supply, grid emissions intensity, and availability of low-carbon power. Scope 3 emissions can be complex and may depend on upstream raw materials, transportation, downstream product use, and customer applications.
Final questions
22. Overall, how satisfied are you with the proposed sustainable finance taxonomy framework?
Satisfied
23. Is there any other feedback you would like to provide on the methodology report as a whole that has not already been covered?
Continue strong engagement with steel and manufacturing experts. Recognize steel as an essential transition material; distinguish activity- and measure-level alignment; accommodate regional and facility realities; support capital formation; align internationally; and avoid excessive DNSH/MSS burden.