Taxonomy Foundations
Please feel free to answer only the questions that are of the most interest and relevance to you.
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
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?
Strongly disagree
2b. Please share the reason for your answer in the space provided
1. This initiative appears to take as given that there can be a meaningful "taxonomy" to determine sustainable investments which would support environmental sustainability (i.e. meeting our present needs without compromising the ability of future generations to meet their needs. This premise should be examined and justified before the taxonomy project continues further. There are many investors who are mostly interested in making money, but who want a certification of some kind to say what they are doing is not harmful. There is a great danger that a "taxonomy" for "sustainable investment" would end up providing a smokescreen for environmentally harmful investments to be accounted as somehow according with society's urgent need to reduce GHG emissions in order to minimize the harm of climate change. Jargon and complex concepts make things worse.
2. If there is to be a taxonomy (and I am skeptical), the first principle should be transparency, i.e. any tests or concepts used should be clear and understandable, and there should be a minimum of abstract jargon. For example, (a) the methodology report is long and vague, full of high-flown statements of principle, with little discussion of actual method; and (b)the term "taxonomy" does not contribute to clarity, but rather detracts from it.
3. The second principle should be accessibility or challengeability. That is, any designation of sustainability made through the proposed taxonomy should be open to being challenged by any party who believes the designation may be unjustified.
4. "Credible" is too vague of a principle to be useful. Achieving transparency and accessibility/challengeability may help the taxonomy to become credible in the eyes of Canadians, but the makers of the taxonomy should not arrogantly presume that they can achieve credibility just by asserting it. Making unfounded claims of credibility could contribute to a false impression that the taxonomy is actually helping to achieve sustainability, as opposed to concealing unsustainable investments and activities.
5. "Interoperable" is too vague a term to be useful, and its meaning is not readily apparent.
6. "Dynamic" is too vague a term to be useful.
7. "Regionally specific": It seems inappropriate to presume that regional specificity is relevant. That may be the case for some situations, but it should not be assumed. Regarding greenhouse gas emissions, there is no "good" place to emit them.
3. Please rate each of the principles below on a scale from “very important” to “not at all important.”
- Credible
- Not at all important
- Usable
- Not at all important
- Interoperable
- Not at all important
- Dynamic
- Not at all important
- Regionally Specific
- Not at all important
- Prioritized
- Not at all important
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?
Disagree
4b. Please explain your answer in the space below
DNSH and MSS criteria seem good, as far as they go, but they don't really address the main issue. The taxonomy is proposed to be voluntary, so the corporations that are doing the worst harm to the environment will be unlikely to participate. To address the harm of climate change, we need rules that will require reduction of GHG emissions from everyone, including the worst polluters. Achieving that will require legislation and regulation, as opposed to voluntary systems. There is a danger that a voluntary taxonomy could deflect efforts to achieve adequate legislation and regulations.
5a. Do you agree or disagree with the proposed scope of objectives to be covered under the DNSH and MSS frameworks?
Disagree
5b. Please explain your answer in the space below
See above.
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?
Disagree
6b. Please explain your answer in the space below
See above.
7. In which areas, if any, is it necessary to go beyond existing laws and standards for the DNSH/MSS framework?
See above. If existing laws and standards are not adequate, they should be upgraded directly, not replaced by a voluntary framework.
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?
Neutral
8b. Please explain your answer in the space below
See above.
9. Are there any gaps in the proposed DNSH/MSS framework that could result in unintended environmental or social harms?
The fact that DNSH/MSS framework is voluntary is the main problem.
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?
The taxonomy should be open to assertions under UNDRIP, i.e. by Indigenous Peoples to whom UNDRIP applies, but it should not try to operationalize UNDRIP or purport to do so.
11. Is there any other feedback you would like to provide on the proposed MSS/DNSH framework?
no
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?
Disagree
12b. Please explain your answer in the space below
The activity classification framework is dauntingly complicated. As such it violates transparency and accessibility, which I submit should be important principles of any taxonomy. Also, the proposed activity classification in the taxonomy appears to propose a framework that would effectively compete with legislation and regulation, except that the taxonomy's framework would be voluntary, where legislation applies to all parties. The latter is preferable, and the taxonomy could interfere with the creation of appropriate legislation and regulation.
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?
Disagree
13b. Please explain your answer in the space below
See 12b. above. Also, the transition category assumes that a taxonomy could be defined that could reliably establish when initially increased GHG emissions would eventually result in lower emissions in line with Paris-aligned pathways. That assumption is not credible.
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
There are not sufficient grounds to believe that effective guardrails can be defined.
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?
Strongly disagree (i.e., disagree on fundamentals)
15b. Please explain your answer in the space below
The taxonomy seems to be setting up a framework that would tend to deflect attention and effort away from getting appropriate legislation and regulations implemented to address GHG emissions and other environmental harm.
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?
no
17. Is there any other feedback you would like to provide on the proposed activity classification framework?
no
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?
Disagree
18b. Please explain your answer in the space below
The approach seems over-complicated, to the detriment of transparency and accessibility/challengeability. It adds a layer of complication to an already complicated situation, and it fosters an unjustified sense that such criteria can be definitively determined in the absence of the particular facts of a case.
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
- Not at all important
- Include sunset and/or sunrise dates where relevant
- Not at all important
- Revise as necessary during regular review periods
- Not at all important
- Primarily use quantitative metrics
- Not at all important
- Primarily focus on Scope 1 emissions but address Scope 2 and 3 emissions where feasible and/or material
- Not at all important
- Informed by a range of robust methods
- Not at all important
20. When thinking about the taxonomy’s credibility and usability, how technologically specific or prescriptive should the technical screening criteria be?
The criteria should be clear, simple, transparent and open to challenge.
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?
No. Scope 2, and especially Scope 3 emissions are vitally important to consider in assessing the sustainability of a project.
Final questions
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?
Thanks for the opportunity to provide feedback.
The oversight and regulation of financing and investing in projects is an important area from a sustainability perspective. I urge the proponents of a taxonomy for sustainable finance to avoid developing a system that may be gamed by parties that seek to continue environmentally unsustainable activities under the cover of some kind of certification that may discourage or prevent appropriate scrutiny.