Taxonomy Foundations
Please feel free to answer only the questions that are of the most interest and relevance to you.
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?
Select
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?
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
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?
Select
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?
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
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?
Disagree (i.e., disagree because of how category is designed)
15b. Please explain your answer in the space below
Dunsky has conducted several studies on the most cost-effective pathways to Paris-aligned net zero emissions in 2050, notably in the last five years for the governments of Québec ( https://www.dunsky.com/wp-content/uploads/Rapport_Final_Trajectoires_QC_2021.pdf) and Ontario (https://www.ontario.ca/files/2025-06/mem-cost-effective-energy-pathways-study-for-ontario-en-2025-0…).
Whilst both studies show that some oil and gas remain as part of the cost-effective energy mix in 2050, these amounts decline steeply from the levels of today, dropping by over 80% in both studies between 2020 and 2050 (oil + gas, final energy consumption, PJ) . Moreover, what fossil consumption is left is largely for hard-to-decarbonize areas, such as plane fuel, or for direct use in industrial processes. Oil and gas are, for instance, completely phased out in light-duty transportation and buildings (cf. chapter 5.3, Ontario study; p.20 onwards, Quebec study).
As such, Dunsky suggests caution regarding the inclusion of oil and gas abatement measures in the taxonomy, as the associated benefits and risks must be carefully balanced, not only from a theoretical but also from a practical perspective.
We take note off the trade-offs. On the one hand, as long as oil and gas production exists, it would be desirable – all other things being equal – to abate as many of its upstream emissions as possible, not least in Canada where these sectors represent a substantial share of national emissions and economic product. On the other hand, the goal of this taxonomy is to send a strong, clear signal about what is "sustainable". If a partial improvement to a high-emitting activity qualifies – including activities whose Paris-aligned trajectory is a steep decline – then the boundary between green finance and ordinary corporate responsibility to decarbonize becomes blurry.
From a global perspective, as well as across several of our studies, the main driver of a Paris-aligned transition pathway is not the abatement of upstream oil and gas sector emissions, but the decrease in demand for, and combustion of, these fuels. Indeed, globally, downstream oil and gas emissions exceed upstream oil and gas emissions by a factor of three-to-one (IEA 2023, https://www.iea.org/reports/emissions-from-oil-and-gas-operations-in-net-zero-transitions). Though upstream emissions are not negligible, they are ultimately set to decline more significantly from declining demand – stimulated through electrification and renewables – than from abatement activities.
As such, including oil and gas abatement measures in the taxonomy would put on an even footing investments that abate only upstream oil and gas emissions, with activities that ultimately abate both upstream and downstream oil and gas emissions (efficiency, electrification, renewables) by replacing existing fossil fuel demand. This equivalency may reduce the value of the financial taxonomy as a compass for investors.
The good news is that excluding abatement activities from the taxonomy need not mean they do not take place, as the economic case for much upstream abatement is already strong: recent Dunsky work (https://dunsky.com/project/methane-abatement-opportunities-in-the-oil-gas-extraction-sector/) illustrates that Canada’s upstream oil and gas sector can eliminate 75% of its methane emissions at an average cost of about $11 per tonne. Similarly, the IEA noted in 2023 that "Tackling scope 1 and 2 emissions from oil and gas is one of the most viable and lowest cost options to reduce total GHG emissions from any activity to 2030." (https://www.iea.org/reports/emissions-from-oil-and-gas-operations-in-net-zero-transitions). This suggests it is possible, both for the taxonomy to focus squarely on green activities, and for upstream oil and gas abatement to progress apace, using existing, conventional capital.
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?
If abatement measures are included, guardrails will need to be strong – involving a combination or those listed on p.40 of the methodology report. However, it may prove challenging, if not impracticable, to design guardrails that are both effective and realistically implementable.
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?
Select
Final questions
22. Overall, how satisfied are you with the proposed sustainable finance taxonomy framework?
Select