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

1b. Specify priority

Climate adaptation and resilience should be the next priority, followed by biodiversity and ecosystem protection. Physical climate risk is increasingly material across Canadian infrastructure, agriculture, real estate and insurance. The importance of including this objective is best demonstrated by Australian actuaries urging the inclusion of climate adaptation in the Australian taxonomy after proposing a similar prioritization. In including this objective, connections should also be made to federal programs such as the Canada’s National Adaptation Strategy. As with other categories, technical screening criteria for activities should be defined.

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 strongly agree with the proposed principles, and they are all important for a taxonomy. The proposed principles appropriately balance environmental integrity with practical market use. Credibility and usability should be treated as mutually reinforcing objectives, and are probably the most important principles and objectives of a taxonomy.
Interoperability is essential for Canadian issuers and investors operating across jurisdictions, while regional specificity is necessary to reflect Canada’s geography and economic structure.
More comments to be provided about the Abatement Measures category in later questions, but as it relates to interoperability, there might be some issues as no other international taxonomy system uses an abatement framework.

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

Important

Dynamic

Very 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

The partial alignment approach of the taxonomy enables a broader use of the taxonomy as opposed to a binary approach. Moreover, partial alignment enables the identification of gaps through the disclosure of DNSH criteria that are not met. Transparency would also enable taxonomy users to engage with investors to fill gaps. Activity proponents should identify remedial actions and timelines for the closing of gaps required to meet full alignment with DNSH.
In developing guidance for the six sectors identified, consideration should be given to the growing role of indigenous equity ownership in major energy, transmission and infrastructure projects. The development of MSS criteria should recognize Indigenous ownership and participation and other economic benefits to communities. Clarifying how Indigenous partnership, equity valuation and fairness, governance, and consent-related considerations will be reflected in MSS assessments would support investment certainty, promote consistent application of the taxonomy, and help advance both sustainability and reconciliation objectives.

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

The inclusion of Indigenous rights, human rights and labour standards in the MSS framework is essential to the legitimacy of a Canadian taxonomy.
The scope could be strengthened by more explicit consideration of climate resilience, environmental justice and community impacts where these risks are material.

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

Requirements that go beyond legislation should be internationally recognized, clearly justified, predictable and operationally feasible for issuers and investors.

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

Additional expectations may be most justified in areas where international norms and market practices have progressed beyond the pace of domestic regulatory development.

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

Environmental and social requirements should be outcome-based and applied consistently, while supporting evidence and reporting obligations should be tailored to the scale, complexity, and risk profile of the activity. This would improve accessibility for smaller organizations without weakening the integrity of the standard.

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

No comment

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?

Detailed guidance should be developed in collaboration with Indigenous rights holders and legal experts. Project and company disclosures should provide appropriate evidence demonstrating that these principles have been respected. As noted in Question 4.b, consideration could also be given to disclosure requirements that extend beyond FPIC, including information on the economic benefits a project is expected to deliver to local communities.

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

No other feedback

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

Strongly agree

12b. Please explain your answer in the space below

Activities that are indispensable to the deployment of climate solutions should not be excluded from eligibility solely because they are not currently near-zero emissions. Where the activity is expected to have stable or growing demand in a Paris-aligned pathway and produces essential inputs to the net-zero economy, it may be more appropriately classified as a transition activity with ambitious decarbonization requirements rather than excluded from taxonomy eligibility altogether.

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

Strongly agree

13b. Please explain your answer in the space below

A credible transition category can fill an important financing gap for sectors such as steel, cement, chemicals, mining and agriculture. Eligibility should be linked to sector-specific pathways, material emissions reductions and a credible near-zero end state rather than incremental improvements alone.

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

Guardrails are sound but the one on “avoiding locking the asset, facility, or project being financed into dead-end pathways” risks of being challenging to define. As noted in section 4.2, this is where sunset and/or sunrise dates will be very important.

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

While the introduction of this abatement category reflects the realities of the Canadian economy, guardrails need to be specific and measurable for financial institutions.
If this category is created, we strongly suggest framing abatement as a temporary financing tool for credible and meaningful and very near-term reductions, and not as a permanent sustainability designation.
We see a potential inconsistency between the transition-category guardrail concerning the availability of clean substitutes and the proposed eligibility of abatement measures attached to demand-decline activities for which lower-emissions substitutes may already exist. An activity may be ineligible for the transition category because a technologically and economically viable clean substitute is available, while a ring-fenced investment in that same activity could nevertheless qualify under the abatement category.
The methodology should clarify the rationale for applying different substitute tests across the two categories and should prevent the abatement category from becoming an alternative eligibility pathway for activities that fail the transition guardrails. Abatement eligibility should require evidence that immediate substitution is not reasonably feasible in the relevant application, geography and timeframe; that the investment will not delay deployment of the cleaner substitute; and that the asset’s financing term and operating life are consistent with a credible phase-down pathway. Eligibility should sunset once a clean substitute becomes reasonably available at scale.

16. Should any additional guardrails be considered?

Enforcement mechanisms need to be implemented for guardrails, especially those such as “sunsetting of assets within a certain timeframe consistent with credible scenarios” to ensure decommissioning does indeed take place.

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

It should be considered whether the abatement category itself should be subject to a sunset clause. As it is intended to support emissions reductions in activities expected to decline under Paris-aligned pathways, its continued relevance should be reviewed periodically. At a minimum, the guardrails should become progressively more stringent over time to ensure that abatement activities remain eligible only where no viable lower-emission alternative exists.

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

Combining modelling, scientific and technical literature, jurisdictional benchmarking and stakeholder engagement is appropriate.

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?

Technical screening criteria should be primarily performance-based and technology-neutral, with eligibility determined through measurable emissions and climate outcomes rather than through the use of prescribed technologies. This approach promotes innovation and allows market participants to identify the most cost-effective decarbonization pathways.
Where certain technologies present materially different lock-in risks, environmental impacts, or alignment with long-term net-zero pathways, the taxonomy should incorporate supplementary safeguards or activity-specific requirements. Such exceptions should be limited, transparent, and supported by clear scientific evidence.

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?

The taxonomy should not rely exclusively or predominantly on Scope 1 emissions where Scope 2 or Scope 3 emissions are material to the climate profile of the activity.

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

Neutral

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 are broadly supportive of the proposed sustainable finance taxonomy framework and believe it represents a pragmatic and credible approach to supporting climate-aligned investment in the Canadian context.

One on hand, we strongly support the distinction between green activities and transition activities, which appropriately recognizes both the need to scale climate solutions and the need to decarbonize emissions-intensive sectors that are expected to remain important in a net-zero economy.

On the other hand, we have reservation as it relates to the proposed abatement measures category. While we recognize the rationale for encouraging near-term emissions reductions in activities expected to experience demand decline, we are not yet convinced that an abatement category can be implemented without creating challenges relating to credibility, market clarity, and potential carbon lock-in. In particular, we note a potential tension between the transition category's focus on activities for which there are no viable low-carbon substitutes and the proposed inclusion of abatement measures associated with activities that may already face competition from lower-emissions alternatives.

The proposed green and transition categories provide a good foundation for a Canadian taxonomy. The case for a distinct abatement measures category is less developed, and additional evidence will be required to demonstrate that its inclusion would enhance, rather than dilute, the credibility and usability of the taxonomy.

In short, future development should focus on protecting the credibility of the green category, maintaining the transition category as the core innovation of the framework, and, if retained, tightly constraining the scope of abatement activities.