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
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
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
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?
Select
5a. Do you agree or disagree with the proposed scope of objectives to be covered under the DNSH and MSS frameworks?
Select
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?
Select
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?
Select
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
Carbon dioxide removal (CDR) is widely recognized as a necessary component of credible net-zero pathways, as noted in footnote 15 on page 26 of the proposal. However, the definition in Section 3.2 currently excludes carbon removal activities by limiting it to “zero to near-zero emission activities.” We recommend explicitly extending the green category definition to include removals and net-negative emissions activities.
Excluding removals from the green category creates a gap in the taxonomy’s own logic. High-durability removals, such as direct air capture and bioenergy with carbon capture and storage, are not merely lower-emission activities on the path to net-zero. They are already net-negative and a tool for the sectors covered by the taxonomy to reach net-negative status. If the purpose of the taxonomy is to unlock investment in activities that enable Canada to reach net-zero, carbon removal is exactly the kind of green category to direct capital toward. Leaving removals in a definitional gap could impede the capital flow needed to deploy and expand these technologies.
We recommend this inclusion apply where removal is the primary purpose of the activity being financed, e.g., investment in a standalone direct air capture or bioenergy with carbon capture and storage facility. Where removal is instead embedded within an existing high-emissions activity to address that activity’s own residual emissions, we recommend this be addressed in the transition category, discussed in our response to question 13b.
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
The creation of a transition category is important for recognizing activities that may drive short-term emissions or be necessary during the transition to a net-zero economy. However, we recommend that the framework explicitly recognize carbon dioxide removal as an eligible transition measure for activities in which deep emissions reductions may leave technically or economically unavoidable residual emissions in hard-to-abate sectors.
The current examples of transition measures (electrification, fuel switching, CCS) focus primarily on reducing emissions at the source, leaving residual emissions unaddressed. CDR closes this gap by serving as a form of “insetting” when built into a company’s value chain. This is consistent with footnote 15 on page 26, which distinguishes removals from offsets on the basis that removals “directly reduce an activity’s emissions and occur directly onsite.” Given the verifiable nature of high-quality removals, we further recommend that the transition framework expand eligibility to include removals occurring “outside the fence” as they can be included within the corporation's “value chain”, and that equivalent MRV standards govern eligibility rather than physical location.
For example, a cement producer using CCS to address the bulk of its process and combustion emissions could add an on-site mineralization unit to permanently store atmospheric CO2 equivalent to the residual emissions CCS cannot capture. That mineralization activity would classify in the transition category.
We want to be clear that this recommendation treats removal as a complement to decarbonization and not a substitute for it. Removal should also be one component of that activity’s own broader decarbonization investment, which distinguishes transition-eligible removal from the green category, where removal is the primary purpose of the financed activity.
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?
Select
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.
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.
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?
Neutral
20. When thinking about the taxonomy’s credibility and usability, how technologically specific or prescriptive should the technical screening criteria be?
We recommend criteria be built around technology-agnostic standards for carbon removal activities given how quickly CDR methods are evolving. Durable removal pathways (those that store carbon for centuries to millennia, such as direct air capture, enhanced rock weathering, and bioenergy with carbon capture and storage) are at different stages of technical and commercial maturity, and new pathways are likely to emerge before the taxonomy’s next scheduled review period. Being overly prescriptive may run counter to the taxonomy’s own principle of being dynamic and forward-looking.
In the case of CDR, technology-agnostic standards such as minimum storage duration, measurement, reporting, reversal risk, additionality, and verification (MRV), would provide a credible and consistent framework for assessing the quality of different technologies, while allowing for pathway-specific requirements where appropriate.
Final questions
22. Overall, how satisfied are you with the proposed sustainable finance taxonomy framework?
Neutral