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
• Water and marine resource conservation

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

Neutral

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

I support most of the proposed principles, particularly credibility, usability, interoperability and a dynamic approach that can respond to evolving science and technology. However, I am concerned about the proposed “regionally specific” principle as currently framed.

Canada’s geography, infrastructure and economic circumstances clearly affect which decarbonization solutions can be deployed, how quickly, and at what cost. Those differences are relevant when designing transition pathways. They should not, however, change the environmental outcome that an activity must ultimately achieve in order to receive the same green or transition designation.

Allowing materially different screening thresholds for comparable activities in different regions could weaken the taxonomy in several ways. It could make taxonomy-aligned investments less comparable, increase the complexity and cost of verification, reduce interoperability with other taxonomies, and create incentives to seek classification under the most permissive criteria. It could also create pressure to treat existing high-emitting infrastructure as a permanent regional constraint rather than a constraint that investment should help overcome.
These concerns are reflected in international work on sustainable finance taxonomies, such as the IFC/Sustainable Banking and Finance Network. Likewise, the IMF explicitly recognizes local and regional economic circumstances, but says this flexibility must be balanced against reducing fragmentation and achieving convergence in definitions, metrics and transition pathways. In other words, we need to adapt the pathway, not the level of climate ambition.

In sum, I believe regional constraints should be something sustainable finance helps overcome, if not supported through other policy tools. They should not be something the taxonomy permanently embeds into its definition of sustainability.

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

Not that 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?

Disagree

4b. Please explain your answer in the space below

I disagree with the proposed partial alignment approach. It is a reversal of the 2022 Sustainable Finance Action Council Taxonomy Roadmap which proposed binary DNSH criteria and stated explicitly that if a project violated any one of the DNSH criteria, it would be ineligible under the taxonomy.

DNSH and Minimum Social Safeguards should be conditions for claiming "taxonomy alignment", not criteria that an activity may fail while still being described as “aligned.” Allowing partial alignment risks weakening the clarity and credibility of the taxonomy. Disclosure of non-compliance is useful, but it does not prevent significant environmental or social harm. It would also reduce comparability with frameworks such as the EU Taxonomy, where compliance with applicable DNSH requirements and minimum safeguards is required for an activity to qualify as environmentally sustainable.

Canada’s approach could therefore create interoperability problems if “taxonomy-aligned” means something materially different than it does in other major taxonomies.

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 proposed scope is strong and well aligned with the purpose of DNSH/MSS and are consistent with major international taxonomy frameworks. The DNSH objectives cover climate adaptation, biodiversity and ecosystems, water conservation, pollution prevention and circular economy, while the MSS scope includes Indigenous rights, human rights, labour standards, anti-corruption and taxation integrity.

Despite the methodology’s reference to the UN Guiding Principles on Business and Human Rights and other international standards, the MSS framework should make more explicit that human-rights safeguards apply to adverse impacts both within and outside Canada, including those connected to an entity’s subsidiaries, supply chains and business relationships. Compliance with weaker host-country legislation should not be sufficient where internationally recognized human-rights standards establish a higher level of protection.

The framework should also more explicitly address operations and business relationships in conflict-affected and high-risk areas. In these contexts, entities should be subject to heightened human-rights due diligence and required to respect applicable international humanitarian law. The MSS should clearly guard against entities causing, contributing to, or being directly linked to serious abuses, including war crimes and other atrocity crimes. This would strengthen the framework and reduce the risk that an activity could be considered taxonomy-aligned despite material involvement in conflict-related human-rights abuses.

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?

Strongly agree

6b. Please explain your answer in the space below

I strongly agree. Canadian legislation should provide the baseline for the DNSH/MSS frameworks, but taxonomy alignment should go beyond domestic law where necessary to reflect internationally recognized standards, evolving science and best practice. Legal compliance alone does not necessarily demonstrate that an activity “does no significant harm” or meets credible minimum social safeguards.

Given that the taxonomy is anchored in the Paris Agreement, its safeguards should also reflect the Agreement’s broader social dimensions, including human rights, Indigenous rights, equality, intergenerational equity, and the importance of a just transition for workers and communities. Climate-aligned investment should not impose disproportionate environmental, social or economic burdens on vulnerable communities or leave affected workers and communities behind.

The framework should therefore incorporate climate justice and just-transition considerations where existing Canadian laws do not provide sufficient protection, and should apply the higher standard where internationally recognized protections exceed domestic requirements. These requirements should remain clear, transparent and verifiable.

This approach would strengthen the credibility of the taxonomy and support interoperability, as major taxonomies and international guidance generally draw on both domestic law and international standards rather than treating domestic legal compliance as sufficient in itself, as recognized in the Canadian Methodology Report.

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

It is particularly necessary to go beyond existing Canadian requirements in relation to Indigenous rights, biodiversity and ecosystem protection, human rights in international and conflict-affected contexts, and just-transition considerations.

For Indigenous rights, the MSS framework should operationalize the standards of the UN Declaration on the Rights of Indigenous Peoples, including Free, Prior and Informed Consent where applicable, rather than relying solely on existing domestic legal requirements. Implementation of the UN Declaration in Canadian law remains an ongoing process.

For biodiversity and ecosystems, DNSH criteria should reflect evolving science and international commitments, including cumulative impacts, ecosystem connectivity and biodiversity dependencies and impacts. The Kunming-Montreal Global Biodiversity Framework provides a useful benchmark, including expectations for businesses and financial institutions to assess and reduce negative biodiversity impacts.

The MSS framework should also go beyond domestic legal compliance for Canadian entities operating or sourcing internationally, particularly in conflict-affected and high-risk areas. It should require heightened human-rights due diligence in such contexts and respect for applicable international humanitarian law, with safeguards against causing, contributing to, or being directly linked to serious human-rights abuses or atrocity crimes.

Finally, where existing legislation does not adequately address the distributional impacts of the transition, the safeguards should incorporate climate-justice and just-transition considerations so that taxonomy-aligned investment does not disproportionately burden vulnerable communities, workers or affected regions.

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

I agree especially on differentiated disclosure requirements to avoid imposing disproportionate administrative burdens on smaller projects and entities. However, this flexibility should apply to how compliance is demonstrated, not to the DNSH/MSS standards themselves. All activities claiming taxonomy alignment should meet the same applicable environmental and social safeguards.

The level of disclosure and due diligence should also reflect the severity and likelihood of potential environmental and social impacts, rather than entity or project size alone. Smaller projects can still have significant impacts on biodiversity, water, Indigenous rights or local communities and should not benefit from reduced safeguards simply because of their size.

Streamlined reporting tools, proportional documentation requirements and additional guidance for smaller entities would improve usability without creating a lower tier of environmental or social protection. This approach would also be consistent with international risk-based due diligence principles, under which proportionality reflects both organizational capacity and the severity of potential impacts.

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

Yes. Several gaps could result in unintended harms. First, the proposed partial-alignment approach remains a significant concern: an activity should not be able to claim taxonomy alignment while failing applicable DNSH or MSS criteria, even where that failure is disclosed.

The MSS framework should also more explicitly address adverse impacts across subsidiaries, supply chains and business relationships, including outside Canada. Particular attention should be given to conflict-affected and high-risk areas, where heightened human-rights due diligence and respect for applicable international humanitarian law should be required to guard against involvement in serious human-rights abuses, war crimes or other atrocity crimes.

On the environmental side, DNSH criteria should adequately capture cumulative impacts, ecosystem connectivity and broader biodiversity impacts that may not be apparent from project-level assessment alone.

Finally, Indigenous rights need to be clearly operationalized, including UNDRIP and FPIC where applicable, and the framework should more explicitly address climate-justice and just-transition impacts on workers, Indigenous Peoples and vulnerable communities. These safeguards are important to ensure that activities classified as sustainable do not achieve climate benefits by shifting environmental or social costs onto others.

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?

I think this should be done in consultation with Indigenous leaders.
The MSS framework should operationalize UNDRIP through specific, mandatory and verifiable criteria for Indigenous rights, including FPIC where required under the UN Declaration. An activity should not qualify as taxonomy-aligned where it infringes Indigenous or treaty rights or proceeds without FPIC where FPIC is required.

FPIC should not be treated as equivalent to consultation or as a one-time procedural checkbox. The framework should require evidence that all affected rights-holding Indigenous Peoples have been appropriately identified; that engagement began sufficiently early to influence project design and decision-making; that complete and accessible information was provided; and that Indigenous Peoples were given adequate time and resources to make decisions through their own governance structures and legal orders.
The process should recognize that the appropriate form of FPIC will vary among Indigenous Peoples and should respect their own representative institutions and decision-making processes. Consent should also be maintained throughout the life of a project and revisited where material changes occur.

Finally, verification should not rely solely on company self-assessment. Affected rights holders should have a meaningful role in confirming whether FPIC requirements have been met and an accessible mechanism to challenge an inaccurate claim of consent or compliance. Failure to meet applicable Indigenous-rights safeguards should preclude taxonomy alignment rather than simply be disclosed as partial compliance.

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

In addition to the issues identified above, I recommend strengthening several elements of the DNSH/MSS framework. First, Canada should consider explicitly including fair competition within the MSS framework, consistent with the EU approach to minimum safeguards.

Second, the framework should include clear expectations regarding grievance and remediation mechanisms. Due diligence should not end with identifying, preventing and mitigating adverse impacts; affected Indigenous Peoples, workers and communities should have access to effective mechanisms for raising concerns and obtaining remedy where harm occurs.

Third, the DNSH framework should explicitly incorporate the precautionary principle and life-cycle considerations. Where credible risks of serious or irreversible environmental harm exist, scientific uncertainty should not in itself be sufficient to conclude that an activity does no significant harm. This would be consistent with important principles underlying the EU Taxonomy.

Fourth, Canada should establish clear and auditable evidence requirements for demonstrating DNSH/MSS compliance, including appropriate use of independent verification for higher-risk activities. Reliance primarily on issuer self-assessment could undermine consistency and credibility.

Finally, and more importantly, the Taxonomy should consider its downstream implications for private lending, particularly for SMEs, which represent about 99% of Canadian businesses. Although the taxonomy is voluntary, it is intended for use by lenders and could become an important market benchmark for green and transition financing. SMEs may therefore face taxonomy-related information and verification requests even where they are not themselves subject to formal disclosure requirements.

Canada should avoid creating a situation in which SMEs face reduced access to sustainable finance simply because they lack the resources or data needed to demonstrate alignment. Proportionality should apply to documentation and verification requirements, not to the substantive DNSH/MSS safeguards. Simplified reporting tools, sector-specific guidance and technical support should be developed for SMEs, and an inability to demonstrate taxonomy alignment should not automatically be treated as evidence that an activity is environmentally harmful or financially higher-risk.

The EU experience is useful in this regard. Its Platform on Sustainable Finance has recognized that a taxonomy not designed with SMEs in mind can create barriers to sustainable finance and has proposed a simplified SME sustainable finance standard. Canada should address this issue proactively as part of taxonomy implementation.

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

Neutral

12b. Please explain your answer in the space below

I partly but have some reservation, thus my selection of Neutral.

I agree with limiting the green category to zero or near-zero climate solutions and activities that directly enable them. However, the framework should include an explicit fossil-fuel exclusion to protect the integrity of the green label. Fossil-fuel extraction, processing and use should not qualify as green merely because technologies such as CCS reduce operational emissions.

This is particularly important given that the methodology will primarily focus on Scope 1 emissions while addressing Scope 2 and 3 emissions where feasible. Green classification should consider material life-cycle emissions and carbon-lock-in risks and distinguish clearly between genuinely zero/near-zero solutions and emissions-abatement measures applied to fossil-fuel activities. CCS may in some circumstances constitute an abatement measure, but should not transform the underlying fossil-fuel activity into a green activity.

More explicit exclusions, similar to those used in Australia's green criteria, would provide greater clarity, reduce greenwashing risk and preserve the credibility of the green designation.

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

Agree

13b. Please explain your answer in the space below

I agree with the proposed approach. A credible transition category is necessary to mobilize capital toward deep decarbonization in emissions-intensive, hard-to-abate sectors such as steel, cement and chemicals, where demand is expected to remain stable or grow in Paris-aligned pathways and zero- or near-zero alternatives are not yet fully available.

I particularly support requiring transition activities to have a credible pathway to ultimately align with the green definition by 2050, rather than treating incremental emissions reductions as sufficient. The exclusion of oil and gas production from the transition category is also important to maintaining a clear distinction between genuine transition activities and activities facing structural decline in a net-zero economy.

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?

Neutral

14b. Please explain your answer in the space below

I support the overall direction of the proposed guardrails, particularly the requirements for transition activities to align with pathways to net zero by 2050, avoid dead-end technological pathways, and ultimately converge with the green category. However, additional safeguards are needed to adequately protect against carbon lock-in.

In particular, transition eligibility should incorporate material life-cycle emissions, stronger interim emissions benchmarks and time-bound sunset provisions. For higher-emitting activities, entity-level transition plans should also be required to ensure that an individual taxonomy-aligned investment is consistent with the issuer's broader capital expenditure and decarbonization strategy.

Additional safeguards are particularly important for new long-lived assets and for transition measures involving CCS or fuel switching. Such investments should demonstrate that they will not prolong fossil-fuel dependence, delay deployment of zero- or near-zero alternatives, or extend an asset's economic life beyond a Paris-aligned pathway.

Canada's approach could also more explicitly consider the economic lifetime of assets and require transition activities not to impede the development or deployment of lower-emission alternatives, consistent with safeguards used in the EU Taxonomy. These additions would strengthen the science-based credibility of the transition label without preventing finance from reaching genuinely hard-to-abate sectors.

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

I'm not convinced about the usefulness of this category. Already having a transition in addition to green label provides more flexibility compared to other taxonomies that only acknowledge the agree label.

I therefore strongly disagree with including this third abatement category for demand-decline activities, particularly upstream oil and gas production, refining and distribution. Reducing emissions from existing fossil-fuel operations, including methane emissions, is important, but this should not be conflated with taxonomy alignment. Activities that are unable to achieve the life-cycle emissions reductions necessary to align with Paris-aligned pathways should not receive a sustainable-finance taxonomy designation.

The methodology itself acknowledges that this category is novel compared with international taxonomies, which have generally excluded activities that are fundamentally misaligned with long-term Paris objectives. Introducing such a category risks weakening interoperability and the clarity and credibility of the Canadian taxonomy.

The proposed approach also focuses largely on operational and upstream emissions while the climate impact of fossil fuels ultimately includes their downstream combustion. Operational improvements therefore cannot substitute for the decline in oil and gas demand and production required in Paris-aligned pathways.

Investments in methane reduction, energy efficiency or other measures at existing fossil-fuel facilities may still be worthwhile and can continue to receive private financing without being classified as taxonomy-aligned. The taxonomy should be reserved for activities and transition investments that are themselves consistent with the long-term transition to a net-zero economy.

16. Should any additional guardrails be considered?

I disagree with this category with or without guardrails.

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

I believe the taxonomy should set a high and science-based standard for what qualifies as green or transition-aligned. Its value depends on the credibility, clarity and interoperability of its labels.

Activities that are not consistent with Paris-aligned pathways should not receive a taxonomy designation simply because they continue to exist or require financing. A taxonomy should identify which activities meet credible sustainability thresholds; it should not adjust those thresholds to accommodate activities that do not.

Creating additional or more permissive categories for misaligned activities risks blurring the distinction between genuine transition finance and incremental emissions reductions, weakening comparability with other taxonomies and reducing confidence in the Canadian framework.

Not every economically necessary or emissions-reducing investment needs to be taxonomy-aligned. Activities outside the taxonomy can continue to access conventional financing. The taxonomy’s purpose should be to provide a credible signal of alignment with a science-based transition, not to provide a label for every part of the economy.

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

Agree

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?

Technical screening criteria should be highly prescriptive about environmental performance, but generally not prescriptive about the specific technology used to achieve it. Wherever possible, criteria should establish clear, quantitative and science-based thresholds for emissions, life-cycle performance and alignment with Paris-compatible pathways, allowing different technologies to compete in meeting those thresholds.

This approach would support innovation and usability while preserving credibility: the taxonomy should define the sustainability outcome that must be achieved rather than favour particular technologies, but the required outcome itself should remain stringent and science-based. Where technology-specific criteria or exclusions are necessary to protect scientific credibility and prevent greenwashing or carbon lock-in, they should be explicit rather than left open to interpretation.

Canada should adopt a similarly approach to Australia, combining performance-based standards such as emissions-intensity thresholds with explicit definitions of eligible and excluded activities and technologies, as well as recognized external standards such as energy labels and building ratings.

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?

Canada is already behind many jurisdictions in developing and adopting a taxonomy. Focusing primarily on Scope 1 will keep us even further behind and risks seriously affecting Canadian competitiveness in the long run.
While focusing initially on Scope 1 emissions may improve usability, material Scope 2 and 3 emissions should not be excluded simply because they are more difficult to measure or outside an operator’s direct control. Where Scope 2 or 3 emissions represent a significant share of an activity’s climate impact, the technical screening criteria should address them and, where appropriate, use life-cycle emissions thresholds.

Where data or methodological limitations currently make this difficult, Canada should use phased requirements or sunrise dates rather than permanently excluding material emissions. The Australian taxonomy provides a useful precedent in retaining downstream emissions requirements for certain mining activities while delaying their application. The taxonomy should progressively move toward full life-cycle assessment as data and methodologies improve.

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?

This work is important and well overdue. We should aim for high standards and not get locked in common lower denominators. As mentioned earlier, not being taxonomy-aligned is just that. reflecting a fact based on scientific standards. The taxonomy will be meaningless if we try to lower the standards to make more activities taxonomy-aligned.