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.

• Other (please specify)

1b. Specify priority

Support for the initial focus on climate mitigation
We support the initial focus on climate mitigation considering the urgency of reducing global greenhouse gas emissions; the need to align with other jurisdictions to accelerate capital flows required to finance Canada’s clean energy transition – estimated at $125 to $140 billion annually , compared with current investments of approximately $15B-$25B per year) (Sustainable Finance Action Council [SFAC], 2024 ; the role Canada must play to support energy security and decarbonization globally, and the need to support just transitions for Canadians impacted by energy transition (workers and communities). This also requires attention to the human capabilities needed to deliver the transition, including workforce skills, adaptation and the capacity of workers and organizations to adopt and implement new technologies and practices.
The need for global energy system is undergoing profound transformation driven by climate goals, energy security concerns and technological innovation.
Domestically, Canada already has a relatively favorable electricity mix (already around 80% non-fossil), but a high per-capita energy use, a cold climate, long transportation distances and a large oil and gas sector.
Globally, Canada is viewed as a trusted and reliable partner for reliable access to electricity, critical minerals, fuels and technology. Geopolitical crises affect energy security and affect how countries think about energy supply, trade, resilience and decarbonization. Between the Russia-Ukraine war impacting energy security in Europe, the Middle East instability threatening some of the most important energy corridors and triggering price spikes, competition between China and US impacting supply chains in support of clean-energy (e.g., critical minerals, battery, solar panels, semiconductors, rare earth elements), maritime routes vulnerabilities and cybersecurity threats to energy infrastructures, our trade partners expect us to step up and Canada to support the global need for energy security and decarbonization.
We need credible criteria to attract the public and private finance required to capitalize on our strengths to accelerate local and global decarbonisation while contributing to global energy security.
The current geopolitical context provides Canada with a unique opportunity to capitalise on the global demand for trusted suppliers during the transformation of global energy markets, and the opportunity to invest in innovation and workforce development to take a lead role amongst lower-emission energy producers, strongest environmental and social governance that will supply the remaining demand post transformation. It also creates an opportunity to develop new trade relationships and reduce our dependencies and related risks of retaliation in the short, medium and long term.

Which objectives should be prioritized in subsequent phases?
Investing in adaptation is no longer an option given the fact that climate change is already affecting profits and operations for business and economies, infrastructure, communities, and public services for governments and that IPCC scenario generally show increasing risks with higher levels of warming (Intergovernmental Panel on Climate Change, 2023; Bank of Canada, 2025).
A common message across insurers, governments, and business organizations is that the consequences of delayed adaptation are already visible:
• Higher disaster losses (Insurance Bureau of Canada, 2025; Bank of Canada, 2025; Munich Re, 2026).
• Rising insurance premiums (Statistics Canada, 2026; Insurance Bureau of Canada, 2025).
• Reduced availability of insurance in some high-risk locations (European Central Bank & European Insurance and Occupational Pensions Authority, 2023; Insurance Bureau of Canada, 2025).
• Greater costs for governments, households, and businesses after disasters occur (European Central Bank & European Insurance and Occupational Pensions Authority, 2023; Munich Re, 2026).
Across the environmental priorities, consideration should also be given to the human capabilities required for implementation, including workforce skills, organizational capacity and the ability of workers and communities to adapt to technological and economic transitions (International Labour Organization, 2015; OECD 2023).
We would also suggest consideration for future phases to add a segment on opportunities related to investments in data, artificial intelligence and workforce development to accelerate environmental and social resilience. The methodology report includes a section on risks to manage with the Do No Significant Harm (DNSH) and Minimum Social Safeguards (MSS) considerations. It could also have a segment on opportunities to improve decision-making and scale solutions across nearly every environmental challenge.

There is a proliferation of high-value use cases emerging globally where AI enabled workforce can materially accelerate sustainability outcomes:
– Climate adaptation and mitigation: AI can support climate resilience, emissions reduction, disaster preparedness, and adaptation (International Telecommunication Union, 2024).
– Water management: AI and machine learning are increasingly being applied to water-resource monitoring, forecasting, infrastructure management, decision support, and other water-management challenges (United Nations Educational, Scientific and Cultural Organization, 2025).
– Biodiversity and ecosystem restoration: AI can strengthen environmental monitoring and provide new capabilities for detecting changes in biodiversity and ecosystems, identifying patterns and pressures, and informing conservation and restoration priorities (International Telecommunication Union, 2024).
– Circular economy and resource efficiency: AI can support more efficient use of materials and resources through applications such as automated waste sorting, material-flow intelligence, predictive maintenance, demand and inventory optimization, and circular product design
– Scientific discovery for climate and environmental solutions: AI can accelerate scientific discovery by helping researchers analyze complex datasets, identify patterns, model physical and environmental systems, and explore large spaces of potential solutions. Applications include the discovery of new battery and low-carbon materials, carbon-removal technologies, improved climate modelling, and a better understanding of interactions between climate and natural systems.
Once we have a Canadian taxonomy, the constraint may no longer be knowledge about what to do but may be our collective ability to implement solutions fast enough and at sufficient scale. A focus on AI enabled workforce may dramatically increase human’s capacity to solve climate, adaptation, biodiversity, water, and pollution challenges at the speed now required, while enabling just transitions for both climate and AI. However, realizing these benefits will depend not only on access to technology, but also on investments in skills, workforce development, organizational readiness and responsible adoption.
While adding a segment on opportunities associated with AI enabled workforce, the Council would also need to augment the content of the DNSH segment to provide guidance on risks associated with the development, provisioning and use of AI systems.
To do so, the Council would be able to leverage the Canadian leadership in Safe AI development practices. The co-chair of the UN Independent International Panel on AI is Canadian, CIFAR Chairs and the Canadian office of the Global Partnership on AI are making significant contributions to the International Standards Organisation for Standardization (ISO) and the International Electrotechnical Commission (IEC) committee that develop and maintain standardized management practices to define how organisations identify, assess, monitor and continually improve their performance related to AI systems, members of the financial sector advisory group of the Council are already subject to regulation on model risk management that embed requirements consistent with the ISO/IEC 42001:2023 Information technology — Artificial intelligence — Management system standard
By helping advance adoption of safe AI, the Council can not only have a meaningful impact on climate transition, but also on productivity, innovation and just AI and climate transitions.
 

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

Strongly agree

2b. Please share the reason for your answer in the space provided

We agree with the proposed principles required to support the end goal of attracting capital to accelerate the climate transition in Canada.
• Credible:
– Science based criteria are needed to prevent green washing, direct capital to effective climate solutions, align with global goals, reduce financial and legal risks.
– Guardrails to minimize the risk of carbon lock-in with emission intensive sectors are also critical to prevent risks for communities and workers impacted by transitions and support orderly transitions.
• Usable:
– The need for criteria informed by feasible and cost-effective technology pathways, communicated in simple terms, designed to minimize the reporting burden for taxonomy users is obvious to enable strong uptake.
– Suggestions:
 Usability should also consider the organizational capabilities, workforce skills and implementation capacity required to translate technically feasible pathways into practice.
 The government of Canada’s commitment to mobilize public and private finance to promote investment in sustainability is clear. We trust it will be the first adopter and supporter of the taxonomy by i) aligning regulatory requirements to drive adoption of cost-effective solutions, ii) align fiscal incentives to make impactful solutions cost-effective when they are not, and iii) encourage other levels of governments to do the same.
• Interoperable:
– Interoperability will accelerate the primary objective of the taxonomy: attract the capital flows required to finance the clean energy transition in Canada.
• Dynamic:
– Forward looking guidance based on current understanding of climate science, technological development and policy will support innovation and adaptation aligned to climate goals.
• Regionally specific:
– Considering the varying economic and technical screening criteria across Canada’s geography to reflect technically viable solutions is important.
– Suggestion: Sectoral pathways for climate transition typically result in investments in new assets and result in assets or investments (both active or planned) which, at some time prior to the end of their economic life, are no longer able to earn an economic return as a result of market forces or technological innovation. Those assets are typically referred to as stranded assets that are expected to suffer from unanticipated or premature write downs, devaluations, or conversion to liabilities. It will be useful for the Government of Canada to receive suggestions from technical working groups on mechanisms to capture information on the social impact of transitions, including changes in skills requirements, risks of skills obsolescence and emerging workforce needs. Having access to relevant information on the impact of transitions on workers, workers in the value chain and communities would facilitate coordinated efforts between employers, industry associations and all levels of governments for the development of worker retraining programs, income support, social protection, plan workforce transitions into emerging industries, direct transition funds to hardest-hit regions, support economic diversification, prevent regional economic decline, design placed-based development strategies.
• Prioritized
– A focus on activities that are likely to deliver the greatest impact on the climate mitigation objective is needed.
In terms of relative importance of each principle, the introductory paragraph of the section makes it clear that trade-offs will be required, making it challenging to prioritize without the context of each case. Clearly articulating the principles sets a solid foundation for issuers and investors to consider the trade-offs associated with each investment decision.

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

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?

Select

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

Select

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?

Select

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?

Select

11. Is there any other feedback you would like to provide on the proposed MSS/DNSH framework?

Instead of answering the individual questions in this section, we would like to highlight significant opportunities emerging as a result of international harmonisation of disclosure topics and the resulting reduction of reporting burden that could be leveraged in Canada to enhance support for adoption of international sustainability disclosure standards and for the taxonomy.
Opportunity to reduce the reporting burden and trade barriers though harmonisation and interoperability Significant developments occurred on July 3rd, 2026, with the endorsement by the European Commission of simplified European Sustainability Reporting Standards (ESRS). They clearly articulate disclosure expectations on environmental and social topics and sub-topics, they are closely aligned to the Global Reporting Initiative (GRI) and to the standards from the International Sustainability Standards Board (ISSB) with a clear articulation of impact materiality and financial materiality that is interoperable, and a requirement for “do not obscure” the relevant disclosure for users of general-purpose financial reporting. The three of them (ISSB, ESRS and GRI) also refer to SASB standards to help identify disclosure topics by industry and related technical protocols.
The revised ESRS csrd-delegated-act-2026-5010-annex_en.pdf includes in Appendix A the list of topics and sub-topics covered by topical standards as one of the inputs to the double materiality assessment to develop entity-specific disclosures on impacts, risks and opportunities. The sub-topics under Own workforce (ESRS S1), Workers in the Value Chain (ESRS S2), Affected Communities (ESRS S3), Consumers and end users (ESRS S4) and Business Conduct (ESRS G1) can easily be mapped to the UN Guiding principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises. ESRS 3 Affected communities include a sub-topic on Rights of indigenous peoples (including free, prior and informed consent, self-determination, cultural rights. The sub topics under Environment include Climate change (ESRS E1), Pollution (ESRS E2), Water (ESRS E3), Biodiversity and Ecosystems (ESRS E4) and Circular Economy and Resource Use (ESRS E5).This is a significant development in international harmonisation and convergence of a global baseline of international standards that jurisdictions can build upon, enhancing the relevance of international standards and reducing unnecessary reporting burden that should be considered in the Canadian taxonomy’s DNSH and MSS frameworks.
This convergence also provides an opportunity to ensure that the human dimension of transition is treated consistently across frameworks, particularly with respect to workforce impacts, skills development, working conditions, affected communities and the capacity to adapt to technological and economic change. Canadian issuers looking for foreign investors or for local investors that commit to international standards to their depositors of investors, or that have foreign buyers of products and services with those types of investors or local regulation requiring interoperable sustainability disclosure would benefit from clearer guidance on environmental and social impacts.
Adopting interoperable screening criteria in Canada would also provide all levels of governments the opportunity to align regulatory and reporting requirements to the same technical protocols and timing of disclosure and has the potential to enable significant reduction of reporting burden and of interprovincial trade barriers.

The Small and medium enterprise (SME) challenge and opportunity
The European Commission has tackled the reporting burden and access to supply chains for SME head on. Simplified ESRS standards include voluntary standards (VS) for private SME. It is a simple reporting tool with consistent disclosure requirements adapted to the size and capabilities of SMEs to enable the production of one simplified data request to meet the needs of business counterparties (i.e. banks, investors or larger companies for which non-listed SMEs are suppliers).
Many large Canadian pension funds have joined the ESG data convergence initiative (EDCI) to get access to a global portal to source the sustainability disclosure they need to manage their private equity portfolios. This portal has access to more sustainability disclosure information on Canadian private companies than governments at the provincial and federal levels.
Leveraging existing SASB standards, together with EDCI disclosure requirements, European VS, Mexican simplified sustainability disclosure requirements for SME and existing OSFI guidelines to map requirements and propose simplified sustainability disclosure for SME would represent minimal efforts and would have the potential to provide significant benefits for Canadian SMEs and ease the scope 3 reporting burden for buyers of products or services, lenders, investors.

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

Select

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

Select

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?

Select

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

Agree (i.e., agree in principle, with conditions)

15b. Please explain your answer in the space below

We agree with the inclusion of the abatement measures category in support of just transitions in Canada and of the Canadian and the world energy security (affordability and availability).
The transition approach should seek to balance ambitious emissions reductions with the investments needed to meet current energy demand and maintain a reliable and secure energy supply throughout the transition.

16. Should any additional guardrails be considered?

In terms of the proposed guardrails, we anticipate the disclosure of transition plans will highlight the limits of the financial markets in support of just transitions and the need for public finance support to enable the sector transition. On that basis, guardrails should consider the requirements to enable a narrative with two critical requirements for public acceptance of the use of taxpayer’s money to support the sector:
• Demonstration of public benefits such as lower energy prices, Improved energy security, local jobs, government revenue, industrial competitiveness.
• Demonstration that investments are not corporate welfare. Public acceptance of government support is more challenging when citizens see higher dividends, large share buyback programs, explicit capital-allocation frameworks prioritizing shareholder returns.

If the abatement category is broadly accepted and accompanied by greater consistency in sustainability-related requirements for project approval across federal, provincial or territorial, municipal, and First Nations governments, it could help reduce uncertainty associated with major projects. The global baseline of sustainability disclosure standards developed by the International Sustainability Standards Board (ISSB), upon which Canadian jurisdictions can build, could support greater consistency in this regard.

Greater policy and regulatory clarity could, in turn, drive Canadian oil and gas companies to align their capital allocation frameworks with credible transition pathways, while enabling governments to support the broader energy transition. This approach recognizes the role that the transformation of the oil and gas sector will need to play during the transition, particularly in maintaining energy security and reducing exposure to volatile international energy markets, while accelerating investments in emissions-reduction solutions, including carbon capture and storage, hydrogen, and other infrastructure that may remain relevant beyond 2050. While this may be a challenging aspect of the transition, a credible and orderly pathway requires taking current energy realities into account and recognizing that the transformation of the sector will necessarily be part of the transition process.
 

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

Congratulations for the pragmatism and the creativity of the technical working groups and of the council. Novel solutions are required to solve complex problems.

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

Strongly agree

18b. Please explain your answer in the space below

– Forward-looking wherever possible: critically important
– Sunset and / or sunrise dates where relevant: critically important
– Revisions as necessary: critically important, including the measures to minimize the uncertainty risks associated with revisions.
– Primarily use of quantitative metrics: critically important for clarity and to minimize risk of greenwashing.
– Primarily focus on Scope 1 emissions but address Scope 2 and 3 emissions where feasible and/or material: critically important to support the usable principle of the taxonomy.
– Informed by a range of robust methods: critically important to stay current and engage with stakeholders in support of adoption, including where relevant evidence on workforce, skills and organizational implementation requirements.

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

Very 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?

We support the quantitative approach that focus on the ultimate performance of an activity and less specific emphasis on the specific technologies used. This approach provides more opportunities for innovation and also leaves room to provide guidance on proven technologies that can be used to achieve the performance target.

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?

This is required to support a usable taxonomy, one of the guiding principles that we support.

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?

We have already suggested:
• Greater focus on the human capabilities in a digital era
• The opportunity for finance Canada to act as a first adopter to drive adoption
• The need to protect micro, small and medium businesses in supply chains with a maximum buyers, lenders or investors can ask (like the European Union or Mexico are doing)
• The opportunity to rethink some of the content in the DNSH and MSS section to help Canadian issuers align to global standards that will open access to new markets and reduce their reporting burden.
We believe the industry classification system is another unresolved issue globally where Canada can help drive change and ease alignment between public and private sector finance, critically important for blended finance requirements for infrastructure projects and alignment of fines and incentives required in support of just transitions.
• Classification of economic activities: North American Industry Classification System (NAICS), Nomenclature statistique des activités économiques dans la Communauté Européenne (NACE) or United Nations International Standard Industrial Classification (ISIC) are used
• Classification of companies by investors: Global Industry Classification System (GICS) or Industry Classification Benchmark (ICB) developed by FTSE Russell
• Classification for sustainability reporting: The International Financial Reporting Standards (IFRS), the Global Reporting Initiative (GRI) and the European Sustainability Reporting Standards (ESRS) all refer to Sustainability Accounting Standards Board (SASB) standards to help companies report information about sustainability-related risks and opportunities that are financially relevant to investors. SASB standards use the Sustainability Industry Classification System (SICS) to assign companies to industries.
Today, the SASB Standards are maintained by the IFRS Foundation through the International Sustainability Standards Board (ISSB). The ISSB has asked on multiple occasions for feedback on the SICS, and received limited input.
Given the desire to align public and private finance to sustainable growth, the need for greater comparability of climate and sustainability information across governments, companies, lenders, investors, and regulators, more progress could be achieved if Statistics Canada and Finance Canada worked with the taxonomy council to propose consistent classification or mapping between predominant classification systems and leverage their collective influence to support local and global progress.