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
• Water and marine resource conservation
• Circular economy

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 provided

The Knowledge Centre supports the six proposed principles. Credibility and usability are particularly important. The taxonomy will only mobilize capital if investors have confidence in its classifications and project developers can practically demonstrate alignment, without creating excessive additional reporting requirements.
We strongly support regional specificity. Canada has materially different electricity systems, industrial structures, resources, infrastructure, geological conditions, costs and technically feasible decarbonization pathways. These differences should be reflected in determining potential pathways and the sequencing of investments.
The recent consultation on Canada’s 2026-2029 Federal Sustainable Development Strategy similarly identified the need for national frameworks to recognize regional and local realities and for greater flexibility in implementation.
Additional clarity is needed to understand how regional specificity will be operationalized. The methodology should explain which factors can justify differentiated criteria; how regional pathways will be established; how comparable levels of ambition will be maintained; how criteria will apply to interprovincial projects and shared infrastructure; and how the taxonomy will avoid creating fragmented investment standards across Canada.
We similarly support prioritization but encourage transparent criteria for determining which activities receive priority. Prioritization should consider emissions-reduction potential, capital requirements, demand for investment guidance, maturity of credible decarbonization pathways, and Canada’s opportunity to develop globally relevant expertise.
Priority should also be given to enabling infrastructure which can support emissions reductions across multiple sectors.
We consider credibility, usability, interoperability and dynamism to be very important. Regional specificity and prioritization are also important; however, their effectiveness depends significantly on how they are implemented. Clear and transparent processes should accompany both principles.

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

Very 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

A partial-alignment approach provides useful flexibility and recognizes that projects may perform differently across multiple environmental and social criteria. It may also improve usability for organizations of different sizes and maturities.
However, partial alignment must be transparent. Users should be able to clearly distinguish between full and partial alignment, including which criteria have not been met and the materiality of those gaps.
Certain fundamental requirements, including compliance with applicable laws, should remain the minimum eligibility requirements rather than criteria that can simply be disclosed as unmet.

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

A partial-alignment approach provides useful flexibility and recognizes that projects may perform differently across multiple environmental and social criteria. It may also improve usability for organizations of different sizes and maturities.
However, partial alignment must be transparent. Users should be able to clearly distinguish between full and partial alignment, including which criteria have not been met and the materiality of those gaps.
Certain fundamental requirements, including compliance with applicable laws, should remain the minimum eligibility requirements rather than criteria that can simply be disclosed as unmet.

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

The proposed environmental and social objectives provide a comprehensive starting point. Existing Canadian legislation, regulatory processes and recognized standards should establish the baseline wherever possible. This will reduce duplication and avoid creating a parallel project-approval process through a voluntary financial taxonomy. Where additional requirements are necessary, they should address clearly identified material risks or gaps that are not adequately captured by existing regulations. Many project risks that are not explicitly regulated are already considered through environmental, technical and financial risk-assessment processes. These established practices may provide a useful basis for additional criteria.

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

Additional requirements should be risk-based, proportional, clearly defined, and capable of objective verification. Documentation and reporting requirements should be proportionate to the size and complexity of the project or entity. Smaller organizations should not face unnecessary administrative requirements that create a barrier to accessing taxonomy-aligned finance. However, core environmental, legal, human-rights and Indigenous-rights protections should not be weakened based solely on project or entity size. Reliance on existing regulatory submissions, streamlined templates and scalable due-diligence requirements could reduce the burden on smaller proponents while maintaining substantial safeguards.

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

The proposed scope is broadly comprehensive. However, the methodology remains high-level, making it difficult to determine whether material gaps will emerge when sector-specific criteria are developed.
Potential considerations include cumulative effects, shared and cross-jurisdictional infrastructure, long-term environmental obligations and the treatment of material non-compliance after an investment has initially been classified as taxonomy-aligned.

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 grounded in Canada's constitutional and legislative framework, including applicable consultation and accommodation obligations. It should also recognize that Free, Prior and Informed Consent is a broader principle under UNDRIP.
The framework should be developed through direct engagement with Indigenous rights holders and Indigenous-led organizations rather than prescribing a uniform process without their involvement.

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

At the project level, taxonomy users should demonstrate appropriate identification of potentially affected rights holders, early and ongoing engagement, transparent consideration of potential impacts and concerns, and compliance with applicable legal requirements.
General stakeholder engagement should not be treated as equivalent to rights-holder engagement.

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

Agree

12b. Please explain your answer in the space below

The Knowledge Centre supports the development of distinct green, transition and abatement categories. However, the current methodology could provide greater clarity regarding the practical distinctions among these categories.
The Knowledge Centre supports limiting the green category to zero- or near-zero emissions climate solutions and the activities that directly enable those solutions. However, “directly enable” should be defined based on the function and climate contribution of an activity rather than an overly narrow interpretation of the supply chain.
Dedicated carbon management activities should be expressly considered within the green enabling framework. These could include durable carbon dioxide removal, CO2 aggregation and conditioning, shared CO2 transportation infrastructure, permanent geological storage, monitoring measurement and verification, and technologies and services whose purpose is enabling permanent emissions reductions or removals.
Eligibility should depend on lifecycle emissions, permanence, regulatory oversight and relevant environmental and social safeguards. Capture equipment installed at an emitting facility may appropriately be classified according to the pathway of the host activity. However, dedicated transportation and permanent storage infrastructure should not automatically inherit the classification of each source it serves. This is particularly important in regions developing shared carbon-management infrastructure which can serve multiple industrial sources and carbon-removal projects.
Technical criteria should also expressly address hybrid and negative-emissions activities such as bioenergy with carbon capture and storage (BECCS) and waste-to-energy with CCS. These projects can combine avoided emissions, industrial emission reductions and durable removal of biogenic CO2. The taxonomy should distinguish among these climate outcomes and establish lifecycle criteria rather than relying exclusively on the classification of the host activity.

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

Agree

13b. Please explain your answer in the space below

The Knowledge Centre supports the development of distinct green, transition and abatement categories. However, the current methodology could provide greater clarity regarding the practical distinctions among these categories.
The Knowledge Centre supports a transition category for emissions-intensive activities that remain necessary in Paris-aligned pathways and have a credible pathway toward deep decarbonization. However, eligibility should be determined at an appropriately specific activity or product level. Broad sector classifications may obscure important differences in end uses, lifecycle emissions, available substitutes and decarbonization potential.
The methodology should also recognize that technical and economically feasible pathways may vary regionally due to differences in electricity supply feedstocks, infrastructure, geology and access to CO2 transportation and permanent storage. Regional flexibility should not reduce the ultimate level of ambition but may affect the sequence and timing of investments required to achieve it.

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

The Knowledge Centre supports the development of distinct green, transition and abatement categories. However, the current methodology could provide greater clarity regarding the practical distinctions among these categories.
The proposed guardrails provide a reasonable foundation, but further definitions are required. The methodology should clarify what constitutes a “material” emissions reduction; how technical feasibility and commercial viability will be assessed; how remaining emissions will be treated; how the useful life of an investment will be assessed against future thresholds; how material Scope 2 and lifecycle emissions will be incorporated; how regional infrastructure constraints will be considered; and how an investment demonstrates that it does not create a dead-end pathway.
The distinction between technical feasibility and commercial viability is important. Technologies may exist without being economically deployable at a commercial scale. A taxonomy intended to mobilize investment should recognize both dimensions when determining credible transition pathways.
The framework should also recognize phased investments where an initial measure forms part of a credible pathway toward deeper decarbonization, while avoiding incremental improvements that would prevent or materially delay future emission reductions.

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

Agree (i.e., agree in principle, with conditions)

15b. Please explain your answer in the space below

The Knowledge Centre strongly agrees with the inclusion of an abatement category, with a few concerns regarding its proposed timing and guardrails. There is a significant opportunity to reduce emissions in Canada through investment in existing emissions-intensive activities, including oil and gas production, refining, and distribution.
These emission reductions remain valuable even where global demand for an underlying product is expected to decline over time. The abatement category is therefore an important and pragmatic feature of the Canadian taxonomy. It recognizes that achieving Canada’s climate objectives requires both investments in emerging low emissions activities and material reductions from existing sources. However, the Knowledge Centre is concerned about the proposal to defer detailed development of the abatement category until 2027.
The methodology identifies oil and gas as a significant source of Canada’s emissions, yet the first phase of technical screening criteria will focus primarily on green and transition activities. Delaying clarity for abatement investments could unintentionally discourage or delay capital investment in projects capable of achieving significant near- and medium-term reductions. We recommend beginning work on the abatement methodology and guardrails concurrently with development of the first green and transition criteria.

16. Should any additional guardrails be considered?

The proposed guardrails raise several practical questions which should be addressed before the category is operationalized. The Methodology should clearly define “near-term” and “short- to medium-term” emission reductions. Major industrial decarbonization projects are long lived capital investments. Carbon capture facilities for example may require operating lives of 20 years or more to support their investment case. A taxonomy that recognizes an investment only over a substantially shorter period may have limited value in mobilizing the capital required to develop these projects.
The proposed restriction on investments that extend the operating life of an emissions intensive asset requires further consideration. Extending the useful life of an asset is not necessarily inconsistent with climate objectives if the investment materially changes its emissions performance. For example, retrofitting an existing facility can enable continued production of a needed product or service while substantially reducing its emissions. Preventing an abatement investment from qualifying solely because it extends an asset's operating life could discourage precisely the type of major capital investment the abatement category is intended to support.
The relevant consideration should be whether the resulting emissions performance an expected operating life are consistent with a credible emissions reduction pathway, rather than whether the investment extends the life of an underlying asset.
The taxonomy should clearly explain how demand decline assumptions will be established and updated. Where products remain in demand in Paris aligned pathways, there is value in supplying those products with progressively lower emissions. Demand assumptions should therefore be transparent, based on multiple credible scenarios, and periodically reviewed.
The proposed relationship between activity level eligibility and expectations that asset owners invest in low carbon alternatives requires clarification. The taxonomy is principally described as an activity level classification system. Requiring an entity to diversify into fundamentally different business activities conflict with this approach and may be difficult to objectively assess or enforce. For example, requiring an oil and gas producer to demonstrate investment in unrelated renewable energy activities would represent a significant change in business model rather than a measure of the climate performance of the specific investment being financed. Any entity level transition requirements should therefore have a clear connection to the credibility of the activity level investment and should be objectively measurable.
The methodology should explain how sunset provisions and other guardrails will operate in practice, including who determines whether the conditions continue to be met; what happens to existing financing if criteria subsequently changes; how investments made under previous criteria will be treated; and how asset level sunset provisions interact with long-lived infrastructure investments.

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

Agree

18b. Please explain your answer in the space below

The proposed approach is comprehensive and provides a reasonable basis for developing activity-specific criteria. The Knowledge Centre supports the proposal for the criteria to be forward-looking, quantitative where possible, reviewed regularly and informed by multiple approaches.

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

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 primarily focus on measurable emissions and environmental outcomes rather than prescribing specific technologies. Technology-neutral criteria will allow developers to select the most effective solution for their facility and circumstances and allow emerging technologies to compete as their performance improves.
Technology-specific requirements may be appropriate where necessary to address a particular environmental risk or to establish credible measurement and verification requirements but should be the exception rather than the default.

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?

Focusing on Scope 1 emissions is a practical approach because they’re the emissions the activity or project usually has the greatest operational control over. Scope 2 and Scope 3 emissions should be incorporated where they are material to determining the actual climate performance of the activity and where they can be reasonably quantified. The treatment of Scope 3 emissions should be consistent across activities. Where downstream emissions influence whether an activity is classified as transition or abatement, the methodology should clearly explain the applicable lifecycle boundary and apply comparable principles across sectors and products.

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

Satisfied

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

The proposed methodology is thoughtful and provides a strong foundation for Canada’s sustainable finance taxonomy. Our primary concerns relate to clarity, the treatment of enabling infrastructure, the practical implementation of regional pathways and the timing and guardrails proposed for the abatement category.
The taxonomy will be most effective if it provides investors and project developers with clear, predictable and measurable guidance while remaining sufficiently flexible to acknowledge regional circumstances, emerging technologies and evolving decarbonization pathways.
We also encourage the Council to consider four priorities as the methodology moves into technical criteria development.
1. Clarify the unity of classification and the relationship among green, transition and abatement activities. Classification should occur at an appropriately specific activity or product level and should distinguish the host activity from an emission reductions measure or enabling infrastructure.
2. Develop a clear pathway for carbon management and other shared enabling infrastructure. Carbon capture, CO2 transportation, permanent geological storage and durable carbon removals can play different roles across the taxonomy. Dedicated, shared infrastructure should be assessed based on its climate function and performance rather than automatically inheriting the classification of the individual activities served.
3. Accelerate development of the abatement category. Significant emission reductions are available from existing emission-intensive activities. Delaying taxonomy guidance for these investments risks delaying capital deployment at a time when major projects require long development and operating horizons.
4. Prioritize outcomes over prescribed technologies. Technical screening criteria should establish credible, measurable emission-performance thresholds while allowing proponents to determine the technologies and project configurations best able to achieve them.
A credible taxonomy should identify where capital can make a meaningful contribution to Canada’s long-term climate objectives. A usable taxonomy must also reflect how projects are developed, financed, regulated and operated. Achieving these objectives will be critical to ensuring the Canadian taxonomy mobilizes investment.