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?
Agree
2b. Please share the reason for your answer in the space provide
Agree, with suggested enhancement. These principles provide a sound foundation for the taxonomy and appropriately balance credibility with practical implementation. Consider explicitly adding transparency as a supporting principle, including clear disclosure expectations and alignment with existing reporting frameworks to reduce duplication and support adoption.
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
- Important
- Regionally Specific
- Very important
- Prioritized
- 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?
Agree
4b. Please explain your answer in the space below
A partial alignment approach is appropriate because requiring full alignment with all DNSH/MSS criteria could create a barrier to adoption, particularly for a voluntary taxonomy. This approach supports transparency by requiring entities to disclose where criteria are met, not met, or require further explanation, while allowing sector-specific considerations to be addressed. For nuclear, this is particularly important because some DNSH considerations, such as radioactive waste management, decommissioning, long-term stewardship, and regulatory oversight, are highly specialized and already subject to robust federal regulatory requirements.
5a. Do you agree or disagree with the proposed scope of objectives to be covered under the DNSH and MSS frameworks?
Agree
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?
Neutral
6b. Please explain your answer in the space below
As a starting point, the baseline would be to adhere to existing laws and standards. Given in the market, there are already existing frameworks and taxonomies such as the ICMA, going beyond existing laws and standards may result in low adoption rates to this voluntary taxonomy, further reducing the value of this initiative. Additional input from public comment and industry stakeholders are required before further opining on this proposed approach.
7. In which areas, if any, is it necessary to go beyond existing laws and standards for the DNSH/MSS framework?
Premature to comment at this point without further context and proposals for public comment.
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
Consider adopting a risk-based and materiality-based approach to DNSH/MSS reporting to avoid creating disproportionate reporting burdens for small projects while maintaining credibility. In addition, the report is heavily focused on new investments and transition activities but less clear on the treatment of existing low-carbon assets. Should consider explicitly recognizing the importance of maintaining, extending, and refurbishing existing low-carbon infrastructure, including generating assets and transmission infrastructure, where such investments preserve low-carbon capacity and avoid emissions increases.
9. Are there any gaps in the proposed DNSH/MSS framework that could result in unintended environmental or social harms?
Consideration should be given to potential cumulative environmental and social impacts that may result from multiple projects within a region. Clearer guidance on the consistent assessment of Indigenous rights, community impacts, and long-term environmental stewardship would help reduce the risk of unintended harms while supporting the credibility of the taxonomy.
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?
Many major Canadian infrastructure projects now include Indigenous ownership arrangements that contribute to both sustainability and reconciliation objectives. Suggested enhancement may include positive indicators related to: Indigenous equity ownership; Indigenous economic participation; Long-term partnerships and revenue-sharing models. It would be helpful in the taxonomy to clarify the relationship between Indigenous rights and ownership.
11. Is there any other feedback you would like to provide on the proposed MSS/DNSH framework?
Yes. The MSS/DNSH framework should include clear, sector-specific guidance for nuclear activities, including expectations related to nuclear waste management, long-term stewardship, and regulatory oversight. While Canada does not yet have permanent disposal in operation, nuclear operators are subject to robust regulatory requirements and have established programs, funding mechanisms, and plans to safely manage waste over the short, medium, and long term. Recognizing these controls would help ensure nuclear is assessed consistently and fairly within the taxonomy while maintaining credibility of the DNSH framework.
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?
Neutral
12b. Please explain your answer in the space below
The term "zero to near-zero emissions" appears extensively throughout the report, yet no quantitative definition is provided. Different stakeholders may interpret "near-zero" very differently, creating inconsistency and potential greenwashing concerns.
The report identifies Electricity as a priority sector but does not clearly explain how nuclear generation will be treated within the Green, Transition, or Abatement categories. The methodology report should explicitly address the treatment of nuclear energy within the taxonomy. Given Canada's reliance on nuclear generation as a major source of non-emitting electricity and its role in achieving Canada's net-zero objectives, the absence of a clear position creates uncertainty for investors and asset owners. Nuclear should also be included in the green category as it has zero to near-zero emissions that make a substantial contribution to climate change mitigation.
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?
Agree
13b. Please explain your answer in the space below
The transition category is important for recognizing emissions-intensive activities that are essential to a net-zero economy and have a credible pathway to achieve near-zero emissions by 2050. However, clear and science-based criteria are needed to define eligible activities, assess progress, and ensure investments support measurable decarbonization while avoiding carbon lock-in. Regular review of criteria and transition timelines will be important to maintain the credibility of the taxonomy.
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
Agree, provided robust guardrails are established. Clear performance criteria, review mechanisms, and sunset provisions will be important to maintain the credibility of the taxonomy and minimize the risk of carbon lock-in.
Additional clarity is needed on how technically feasible low-carbon substitutes, dead-end pathways, and material emissions reductions will be assessed. Regular review of criteria will also be important to ensure activities remain aligned with evolving technology, climate science, and net-zero pathways while supporting practical implementation.
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?
Agree (i.e., agree in principle, with conditions)
15b. Please explain your answer in the space below
Agree, provided the category is narrowly defined and supported by strong guardrails. Including a separate abatement measures category can help recognize near-term emissions reductions in demand-decline sectors, while avoiding overclassification of activities that may not be aligned with long-term net-zero pathways. Clear eligibility criteria, sunset provisions, and safeguards against carbon lock-in will be important to maintain the taxonomy’s credibility and usability.
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?
The proposed guardrails are appropriate, but should be strengthened with clear eligibility thresholds, sunset dates, and requirements to demonstrate material near-term emissions reductions without extending asset life or increasing production capacity inconsistent with net-zero pathways. Transparent disclosure of baseline emissions, expected reductions, timelines, and residual emissions should also be required to support credibility and usability.
17. Is there any other feedback you would like to provide on the proposed activity classification framework?
Additional guidance would be helpful on how existing low-carbon assets, enabling infrastructure, and technologies will be assessed. The framework should also recognize investments that deliver significant emissions reductions, even if they do not yet meet whole-of-activity requirements. Finally, consideration should be given to the role of infrastructure reliability, resilience, and refurbishment of existing low-carbon assets, as these investments are important to supporting Canada's transition to a net-zero economy.
Nuclear should also be included in the green definition as it has zero to near-zero emissions that make a substantial contribution to climate change mitigation.
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?
Agree
18b. Please explain your answer in the space below
The proposed approach is reasonable because it balances credibility with practical implementation. Technical screening criteria should be forward-looking, measurable, and reviewed regularly to reflect changes in technology, science, and policy. Criteria should also be clear enough for consistent application across sectors, while allowing sector-specific flexibility where needed.
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
- Important
- Include sunset and/or sunrise dates where relevant
- 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
- Important
- Informed by a range of robust methods
- Important
20. When thinking about the taxonomy’s credibility and usability, how technologically specific or prescriptive should the technical screening criteria be?
The technical screening criteria should be specific enough to reflect important differences between technologies, since performance, risks, and operating requirements can vary significantly. However, they should not be so prescriptive that they limit innovation or make the taxonomy difficult to apply. Where possible, criteria should focus on clear performance outcomes, with technology-specific requirements added where needed to support credibility and consistent application.
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
Final questions
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 framework provides a useful starting point for a Canadian sustainable finance taxonomy and generally balances credibility with practical implementation. Further clarity will be needed on sector-specific technical screening criteria, treatment of nuclear and existing low-carbon assets, DNSH/MSS expectations, and alignment with other reporting frameworks to support consistent application and broader adoption.
Important to provide industry stakeholders with the opportunity to review the next set of technical screening criteria and other proposals before finalizing. If we are considering lifecycle emissions for green activities, need to be apples to apples for comparison as nuclear in Ontario considers lifecycle emissions and already have a rigorous process to account for nuclear waste.
It would be important to clarify how the taxonomy reporting may interact with:
-ISSB/CSSB reporting.
-Federal climate disclosure requirements.
-Green bond reporting.
-Provincial regulatory frameworks.
This would reduce duplication and improve adoption.