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
- Circular economy
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 provided
We are supportive of the six key principles and their rationale.
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
- 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
We agree that the proposed partial alignment approach strikes a pragmatic balance between maintaining the integrity of the taxonomy and encouraging broad market participation. Requiring disclosure of the extent to which DNSH and MSS criteria are met boosts transparency, and allows investors to make informed decisions.
One gap in the proposed partial alignment approach is that incentives for continuous improvement need to be established. Aspects of the framework should include sunsets for organizations not currently meeting criteria, by which they mean to in future fulfill the criteria set forward.
In addition, some DNSH/MSS criteria, (eg: core human rights, Indigenous rights) arguably should not be subject to partial alignment, and rather seen as stronger binary criteria. While more technical/environmental criteria (e.g., specific pollution thresholds) could remain in the disclosure-based partial alignment approach.
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 of objectives under DNSH provide a comprehensive framework for identifying and managing material environmental risks. Similarly, the proposed MSS domains, including Indigenous rights, human rights, labour, anti-corruption, and tax integrity, reflect key social and governance considerations that are increasingly important to investors and stakeholders.
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?
Agree
6b. Please explain your answer in the space below
We agree with the proposed approach of grounding the DNSH and MSS frameworks in Canadian legislation while retaining the ability to go beyond existing laws and standards where justified, as non-incorporated risks evolve.
7. In which areas, if any, is it necessary to go beyond existing laws and standards for the DNSH/MSS framework?
In areas where there are emerging climate and sustainability issues, and where legislation may not yet fully address these risks.
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
We generally agree as it follows the principle of materiality. However, smaller entities could still cause significant localized harms (e.g., small mining operations near sensitive ecosystems). We suggest clarifying that the tiering is applied to the reporting burden/format, not to the bar for what counts as significant harm (e.g. that smaller entities could 'get away' with not meeting certain DNSH/MSS criteria).
9. Are there any gaps in the proposed DNSH/MSS framework that could result in unintended environmental or social harms?
Some minimum requirements around scientific and material impacts, beyond the simple disclosure of the partial alignment approach.
11. Is there any other feedback you would like to provide on the proposed MSS/DNSH framework?
Consideration should also be given to developing standardized disclosure templates and guidance for reporting entities to improve consistency, comparability, and ease of implementation across sectors. Clear distinctions between fully aligned and partially aligned activities could further strengthen transparency and help users interpret disclosures.
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?
Agree
12b. Please explain your answer in the space below
We agree with limiting the green category to activities that are zero or near-zero emissions or that directly enable zero or near-zero emissions climate solutions. A clear and rigorous definition of "green" supports the credibility of the taxonomy and promotes consistency with leading international frameworks.
On element we would like the classification framework to address are the indirect enablement solutions, and how those activities might be considered in this framework.
Finally, we also support the report's emphasis on grounding eligibility in scientific evidence and measurable outcomes rather than policy preferences or sector-specific considerations.
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
We agree with the proposed transition category. A credible taxonomy should recognize the important role of emissions-intensive sectors that are essential to a net-zero economy and have viable pathways to significant decarbonization.
The proposed approach focuses on activities that can achieve deep emissions reductions over time and are expected to remain relevant in Paris-aligned pathways. This helps create clarity for investors seeking to finance the decarbonization of hard-to-abate sectors.
However, the "stable or growing demand" test and the "no technically feasible substitute" test are hard to pin down for activities where substitutes are emerging but are not yet cost-competitive.
We recommend to better define how "technically feasible" will be assessed, either on purely technical feasibility, or economic feasibility, since a technology that exists in pilot form, but is not commercially deployable could be interpreted either way, with very different implications.
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
As technical screening criteria are developed, it will be important that the guardrails remain transparent, evidence-based, and measured with evolving scientific understanding and technological developments.
Regular review mechanisms will be particularly important to maintain credibility over time. These must be clearly time bound at regular intervals.
We also encourage continued alignment with approaches being developed in peer jurisdictions to support international interoperability and reduce unnecessary complexity for global investors.
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
We agree in principle with exploring an abatement category, provided that robust safeguards are established to preserve the scientific credibility of the taxonomy.
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 taxonomy should be explicit that abatement-eligible measures are a narrower, lower-status form of alignment than green or transition, to prevent the market and other stakeholders from reading "taxonomy-aligned" as a uniform stamp of approval across all three categories.
Additionally, the taxonomy must commit to reviewing an activity’s eligibility over time, so that the activity does not become a fixture by default, or a loophole. Eg: as Canada’s oil and gas sector’s role in the economy evolves, it may be considered a transition activity in the short term, but must be redefined in the taxonomy as other sectors match utility.
17. Is there any other feedback you would like to provide on the proposed activity classification framework?
We are generally supportive of the proposed activity classification framework and believe it will be additive to Canada's sustainable finance ecosystem and capital markets.
In our view, the long-term success of the taxonomy will depend on maintaining a strong commitment to science-based decision-making, international interoperability, and clear distinctions between green, transition, and abatement activities.
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
We support the emphasis on considering international precedents and promoting interoperability with other major taxonomies. Global alignment will be important for attracting investment and ensuring that Canadian taxonomy-aligned activities are understood and recognized by international investors.
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
- Important
- Informed by a range of robust methods
- Very important
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. This approach reflects current data availability, and the level of direct operational control entities have over different emission sources. It also supports usability and implementation across sectors.
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?
We believe the framework has the potential to improve transparency, support capital allocation toward climate-aligned activities, and strengthen Canada's competitiveness in global sustainable finance markets.
We commend the Council and supporting organizations for developing a thoughtful and comprehensive framework.
Overall, we believe the proposal strikes a reasonable balance between scientific credibility, usability, and interoperability. We particularly support:
• the commitment to science-based classification;
• alignment with leading international taxonomies and standards; and
• the focus on measurable outcomes and transparency.
In terms of areas the taxonomy methodology could go further:
The report does not specify the length of review periods or who conducts them.
• We recommend this be further specified, since it affects how much certainty such a "dynamic" principle can actually provide to the market.
• This review mechanism could be a natural vehicle for phasing in gradually stricter DNSH/MSS compliance over time.
• We suggest to explicitly connect the DNSH/MSS partial-alignment approach to this review-period mechanism.
On quantitative metrics for the transition and abatement categories, meaningful quantitative criteria (e.g., Scope 1 emissions intensity per unit of output) may not have well-established Canadian regulatory equivalents yet, especially at a sector-specific level.
• We recommend clarifying how the taxonomy will handle sectors where no existing quantitative benchmark exists (will interim/proxy metrics be used until sector-specific baselines are developed), and how will comparability be preserved across sectors that are at different stages of metric maturity?