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.

• Protection of biodiversity and healthy ecosystems
• Circular economy
• Other (please specify)

1b. Specify priority

– Climate change and nature loss are systemic and interconnected threats; as such a natural first objective priority would be protection of biodiversity and healthy ecosystems, including water resources and marine ecosystems. Climate change increases the risk and severity of droughts which can lead to the devastating wildfires Canada has seen currently and in the last few years. Marine ecosystems regulate the global climate.

– Compared to the other objectives, voluntary standards on nature-related financial reporting have developed furthest (Taskforce for Nature-related Financial Disclosures; and ISSB’s planned Nature standard incorporating TNFD elements), which helps enable the process of integrating nature criteria in the taxonomy.

– A circular economy would address pressing issues related to our growth economy transgressing planetary boundaries, and is a particularly useful objective considering the clean energy transition, which will require proactive recycling of critical minerals given that they are a finite resource.

– While the EU and Australian taxonomies include climate change adaptation as part of their objectives, and unfortunately the capital required for adaptation and resilience efforts is significant, this should not replace capital that can go into mitigation efforts. Paris-aligned climate mitigation, if done at the pace and scale we need, is ensuring climate resilience. As such we advise prioritizing, for now, the other proposed objectives.

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 provide

We strongly agree with the proposed principles. However, we do not agree that the Taxonomy should try to strike an equal balance across the principles, as its credibility as a voluntary framework is dependent not on how applicable the framework is to Canada’s current market conditions, but on ensuring that the categorization of activities identified are science- and Paris-aligned to prioritize attracting domestic and international capital that gets Canada to a net zero clean economy by 2050.

From an asset owner perspective this emphasis on credibility also gives us the greatest confidence that when our external managers apply the taxonomy, we can trust the categorization to be robust and do not have to provide additional oversight on how investment activities were classified.

As such, credibility should be the overarching starting point. While the Canadian taxonomy should be usable, this does not mean it should be broadly applicable. This is as much a principled as well as a practical consideration: for example, if the majority of company activities are not yet eligible, the market can move towards eligibility and meeting voluntary standards over time. However, it is much harder to start from standards that are broadly applicable and retroactively try to insert or improve scientific credibility over time, which risks greenwashing practices – a practice Taxonomies are uniquely designed to prevent.

This is also key for regulators, who require credible, science-based taxonomies to establish a common language between entities and investors/financial institutions to ensure measurement of climate impacts are reliable.
At the same time, given the existence of already strong and credible Taxonomies in other jurisdictions, interoperability is equally critical; this ensures the least amount of friction in attracting international capital to Canada’s decarbonization efforts.

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

Credible

Very important

Usable

Important

Interoperable

Very 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?

Agree

4b. Please explain your answer in the space below

Given that Canada lags other jurisdictions on DNSH/MSS and mandatory corporate human rights and environmental due diligence (HREDD) as per the UN Guiding Principles for Business and Human Rights, we agree that a partial alignment approach would allow for broader applicability that can serve to phase-in HREDD best practices and improve disclosures in the market over time. The proposed approach would still allow investors to conduct their own due diligence to determine what amount of alignment they expect and for which criteria.

However, what is currently unclear about the methodology is whether the partial alignment approach:

1) Is purely a “comply or explain” disclosure exercise or whether actual partial alignment will be expected based on e.g. certain key criteria or a percentage, given that 0% alignment with DNSH/MSS criteria would raise significant credibility flags for a voluntary framework and potential other concerns if criteria are partially grounded in Canadian law. Entities failing to meet basic legal, ethical, and governance standards should not be eligible for taxonomy alignment;
2) Will include a phase-in / ramp-on approach to encourage progressive levels of alignment disclosure over time; a staggered approach gives companies time for capacity-building and provides a pathway towards eventual full alignment, which we highly encourage;
3) Rather than merely encouraging remedy, will require disclosure on remedy efforts especially for criteria where there is no alignment coupled with significant negative impacts.

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

Strongly agree

5b. Please explain your answer in the space below

The proposed scope of objectives provide a high degree of interoperability and we firmly agree with the inclusion of Indigenous rights in the MSS Framework especially to ensure the Taxonomy’s credibility and usability in the Canadian context.

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

See in part our answer under 4b. We also note that going beyond existing Canadian law ensures enhanced interoperability with other taxonomies where laws and standards are further developed. As this is a voluntary disclosure framework, we believe it should be based on best practice.

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

While the methodology report states that Canada’s MSS framework will be grounded
in the legal context of Canada implementing UNDRIP, it also proposes to use the IFC Performance Standards to assess project/activity-level environmental and social impacts. We caution against wholesale adopting IFC standards given that there has been significant and credible critique from Indigenous groups on IFC Performance Standards 5 and 7 in particular. However, we are aware that the IFC is now undergoing consultation to update its 2012 standards, which may address some of these concerns. We recommend that the BFP integrate feedback from Indigenous-led organizations on what good FPIC looks like, including from joint submissions to the IFC (such as https://www.tallgrassinstitute.org/articles/indigenous-peoples-and-the-international-finance-corporation-ifc). We also recommend other voluntary sector-led best practice standards such as the Canadian-led global Initiative for Responsible Mining Assurance (IRMA) which assess sustainability at the project-level, and ensures standards are developed through a consensus and equal governance approach of communities, organized labour, NGOs, finance, purchasers of mined materials (e.g. steel, technology companies) and mining companies. https://responsiblemining.net/

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

This depends on whether implementation of the DNSH/MSS standards are intended to evolve over time to move from disclosure-only to partial alignment, to full alignment. If yes, then the proposed approach to provide disclosure relief elements for smaller projects and/or entities is reasonable. If no, then a comply-or-explain disclosure approach should not be too burdensome a requirement for smaller entities.

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

We would defer to scientific, environmental and civil society experts for their expertise. See also our answer under Q7.

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?

We raised the concern about relying on IFC Performance Standard 7 under Q7 and shared a few resources to consider best practices, including IRMA standards in the mining sector which are co-developed by industry (mining companies and purchasers including e.g. steel and technology companies), labour, community and Indigenous groups, and investors.

Most important is the need to ground FPIC and UNDRIP operationalization in what Indigenous people themselves identify as best practice, such as going beyond a process to be completed towards a condition that must be met and maintained over time. BFP should have the governance processes and consultation approach in place to ensure Indigenous people’s input and answers to this question are prioritized.

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

No

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

Strongly agree

12b. Please explain your answer in the space below

The approach is consistent with a Paris-aligned scenario which ensures credibility and has a high degree of interoperability with other taxonomies.

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

Strongly agree

13b. Please explain your answer in the space below

The “brown to green” transition is where 1) there is significant potential for material decarbonization 2) major investments are required 3) clearer categorization, standards and guidelines will be most helpful and impactful.

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?

Disagree

14b. Please explain your answer in the space below

We strongly agree that the transition category should not include eligible activities from the oil and gas sector and appreciate the decision to maintaining the credibility of the transition category. However, we would like to share several areas of best practice to strengthen the transition category guardrails.

Australia's roadmap paired its taxonomy with mandatory climate-related financial disclosure legislated across the economy, phased in by company size, plus a "clear, enforceable" greenwashing regime coordinated between its securities regulator and competition watchdog — something Canada currently lacks, especially after the Canadian Securities Administrators paused disclosure-rule development citing competitiveness concerns. Without that scaffolding, transition-label claims are more exposed to greenwashing risk than in jurisdictions where the taxonomy plugs into compulsory reporting. We propose additional guardrails:

1) Tie the entity-level requirement to the label, not the activity. The draft already declines to require net-zero targets or transition plans for taxonomy-aligned activities (Section 2.4) — that's defensible for usability. But nothing stops the taxonomy from requiring an entity-level disclosure at the point an issuer actually uses the transition label on a financial instrument (bond, loan, fund). This mirrors what Singapore-Asia already does for its riskiest "amber" activities (entity-level transition plans required for high-emitting manufacturing and coal phase-out) and what Australia does for gas-powered generation through "entity-level firming advice," where eligibility depends on the parent entity's whole asset base. Canada could adopt a similar tiered rule: whole-of-activity transition claims trigger a mandatory, published entity transition plan.

2) Sunset the "no entity requirement" concession itself. The draft treats the entity-level exemption as a bootstrapping measure to drive early uptake, citing that only 5% of Canadian companies currently have transition plans. That's a reasonable transitional justification — but it could be made time-bound rather than open-ended, e.g., "entity-level transition plan disclosure becomes mandatory for transition-label users starting [date], contingent on Business Future Pathways' 2027 transition-plan guidance being finalized." That converts a permanent gap into a phased one, consistent with the taxonomy's own "dynamic" principle.

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

Strongly disagree (i.e., disagree on fundamentals)

15b. Please explain your answer in the space below

1) Science-alignment mandate: While we understand the consideration for the role the oil and gas sector plays in our Canadian economy, and that the sector’s decarbonization efforts such as methane abatement could lower emissions in Canada, we do not believe that a voluntary science-based Taxonomy framework as a language and categorization of Paris-aligned activities and meant to address greenwashing, is the appropriate mechanism for reducing emissions from the oil and gas sector. The proposed abatement category is outside of the mandate of the taxonomy, which is mandated to classify climate-aligned investments. The precedent to create a fossil-fuel-free taxonomy in a country that is a large fossil fuel producer has already been set by Australia.

2) Demand decline: In theory we agree that this sector will experience demand-decline globally under the NZ Scenario. Taxonomies are instruments that can help enable this decline. Realistically however, oil and gas companies, unless mandated to do otherwise, will try to fulfil their duty to shareholders and attempt to remain the last entities standing in the sector regardless of national and global 2050 targets. Canadian oil and gas companies have issued ultra-long-term corporate bonds that stretch until 2084, for example. The sector sees a competitive advantage in being able to claim lower-emissions oil and support the narrative that growing Canadian oil and gas production is less harmful compared to growing oil and gas production in other jurisdictions. These narratives around cleaner oil already exist and are currently actively used by the federal government. A voluntary sustainable finance taxonomy should not enable any oil and gas growth and carbon lock-in, even if unintended.

3) Operational challenge to prevent greenwashing: Realistically, as such, including an abatement category risks continued capital going towards a sector that is unlikely, at the entity level, to meet the guardrails proposed in the methodology, making preventing greenwashing difficult to operationalize. As it seems now, the guardrails rely on activity-level criteria but ignore entity-level transition credibility. Fossil fuel entities can invest in abatement while simultaneously expanding production. To date, no Canadian oil and gas company has acknowledged the need for a managed decline. However, even if this changes, preventing greenwashing continues to be very complex. For example, if an entity company with a phase-out plan receives capital at the activity level under the abatement banner, and later due to logistical or financial reasons the entity pushes back its deadline, the capital cannot be retracted.
4) Unintended consequences: By including the abatement measures category, capital that would have gone towards green and transition activities may instead flow towards the oil and gas sector which risks perpetuating carbon lock-in. Additionally, given the weight and size of the sector, being Canada’s second largest on the S&P/TSX Composite after Financials, the abatement category can risk overly representing investment opportunities compared to the green and transition categories.
5) Asset owner monitoring: From an asset owner perspective a credible taxonomy gives us the greatest confidence that when our external managers apply the taxonomy, we can trust the categorization to be robust and do not have to provide additional oversight on how investment activities were classified. If our external managers were to invest under an abatement category this would require significant monitoring efforts on our part.
6) Unproven technologies CCUS projects are found to be used more commonly for enhanced recovery of oil and gas for commercial purposes than for climate mitigation, and typically underperform predicted capture levels. We see this in Canada: the Oilsands Alliance now aims for approximately 6 million tonnes of carbon dioxide per year within a decade, a significant decrease from the original stated goals, leaving the remaining reductions to be achieved by "unspecified" future technologies.
7) Methane abatement: Globally, voluntary methane abatement best practices exist as part of the Oil and Gas Methane Partnership 2.0 (OGMP 2.0). International competitors of Canadian companies are already addressing methane challenges without requiring ‘abatement capital’. Despite significant push by investors, most Canadian oil and gas companies have not joined OGMP 2.0.
8) Access to capital is not a challenge: The inclusion of the abatement category in a voluntary sustainable finance taxonomy is not necessary for the oil and gas sector to continue accessing capital – the taxonomy does not prohibit investment in any sector. Canadian oil and gas is the most heavily subsidized sector in the G20 and are currently achieving windfall profits for Q1 2026. Canadian investors similarly are over-invested in the sector.
9) Trust: Lastly, the sector has a long record of active lobbying against climate policies and industrial policy mechanisms that would help incentivize decarbonization, such as carbon pricing and climate-related disclosures. It has led decades-long disinformation campaigns on climate change including the positioning of natural gas as a transition fuel, and employs climate delay tactics. We strongly urge BFP not to make Canada’s taxonomy an incidental instrument that enables such tactics.

16. Should any additional guardrails be considered?

We do not agree that an abatement category should be added.

However should it be added, we believe guardrails should include restrictions around activity expansion at the entity level, robust requirements for Scope 3 emissions reductions, entity-level decommissioning time-frames in line with Canada’s net zero goal, and no further capital allocation by the entity related to growing oil and gas infrastructure and production.

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

While we do not agree with the need for an abatement category, we appreciate the clear distinction between green, transition and abatement categories, rather than a proposed inclusion of abatement measures under the transition category, to maintain credibility of the transition category itself.

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

The proposed approach ensures credibility, interoperability and allows investors to integrate forward-looking information into their investment processes.

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

Important

Primarily use quantitative metrics

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?

It should be technologically specific or prescriptive to the extent that doing so prevents potential greenwashing.

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

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

Unsatisfied

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

Our answer under Question 22 would ideally be: Somewhat satisfied. We are very satisfied with the green category, and believe the transition category is a good start but could be strengthened. We strongly disagree with the inclusion of an abatement category and the argument that this is a necessary requirement given Canada's oil and gas-heavy market context. We would like to reiterate that for asset owners with external managers to be able to use and rely on our managers' use of the taxonomy, credibility is the most important principle.

We would also like to reiterative the importance of published, entity-level transition plans, and their more formal inclusion into the Taxonomy methodology. This is especially relevant given BFP’s role in developing sector-based Transition Plan guidance. From the investor perspective, not requiring entity-level transition plans under a voluntary Taxonomy framework seems like a missed opportunity for those guidances to be actively used and useful in the Canadian context.