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
• Other (please specify)

1b. Specify priority

Canadians are already experiencing the near-term physical impacts of climate change. By some measures, insured damage from severe weather exceeded $2.4 billion in 2025. As extreme weather events and associated impacts continue to rise, building resiliency into Canadian businesses and infrastructure should be an early priority for Taxonomy development.

While we recognize the importance of protecting biodiversity, we believe the market maturity is not yet in place to support practical implementation yet.

2a. Do you agree or disagree with these proposed principles as the foundation for the taxonomy?

Strongly agree

2b. Please share the reason for your answer in the space provided

The proposed principles are appropriate for guiding the taxonomy development. As the Methodology Report correctly notes, these principles will not always align perfectly with one another. For example, ensuring that the taxonomy is regionally specific may pose important trade-offs with credibility or interoperability. In our view, the taxonomy requires credibility and interoperability to function as intended. The taxonomy cannot, for example, steer financing towards green and transition investments without a credible basis for determining technical screening criteria. Similarly, without interoperability the taxonomy will be severely limited in its accessibility to foreign investors. To the extent that tensions and tradeoffs emerge between principles emerge, we recommend prioritizing credibility and interoperability above other principles to promote confident capital flows across markets.

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

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 applaud the report's commitment to developing an approach for Do No Significant Harm (DNSH) and Minimum Social Safeguards (MSS), including Indigenous rights, human rights, labour standards, corruption and bribery controls and taxation integrity. Sustainable finance frameworks are most effective when they consider and address potential positive and negative social impacts. Incorporating DNSH and MSS considerations can help ensure the taxonomy supports climate action while safeguarding broader environmental and social values and maintaining public trust and usability. Through the forthcoming transition planning guidance, we encourage a recognition that economic decarbonization is occurring within the context of historic and systemic inequities in Canada. As such, in our view, the transition to a low-carbon economy must do no further harm while also repairing, reconciling and restoring prosperity to Indigenous, First Nations and Metis Peoples and other groups that have historically been excluded from fair economic participation so that everyone benefits in a sustainable future. We affirm the Canadian Council for Indigenous Business (CCIB)’s proposal that there is value in treating Indigenous rights as a stand-alone pillar within the MSS framework, given Canada’s unique history and constitutional and treaty rights.

We support a partial alignment approach is adequate to support a credible approach while encouraging market participation. Australia’s partial alignment approach provides a useful precedent for this. Sustainability outcomes often involve trade-offs between competing environmental and social objectives. A partial alignment approach will facilitate informed decision-making where trade-offs exist without disqualifying projects which may drive significant emissions reductions. Requiring disclosure of the extent to which DNSH/MSS criteria are met provides investors with more decision-useful information than automatic disqualification of activities that do not meet every criterion.
With a more flexible approach to DNSH and MSS, it becomes more important to have well defined, sector-specific DNSH criteria and MSS assessment criteria. Without well-defined criteria, the partial alignment approach may introduce a risk that DNSH/MSS becomes a ‘box ticking’ exercise rather than a useful guardrail for the taxonomy’s credibility.

The framework should adopt a transparent disclosure approach that allows users to understand trade-offs on a spectrum, including:
• Which criteria are met and not met;
• Whether identified harms have been avoided, mitigated, or remain as residual risks;
• Planned actions to further mitigate harms; and
• The rationale for any remaining impacts.

This would be consistent with the approach commonly used in Environmental Impact Assessments and would provide a more nuanced understanding of sustainability performance.

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 environmental and social objectives for the DNSH and MSS criteria capture the areas necessary to ensure taxonomy-aligned activities do not create significant unintended impacts. However, it will be important to maintain a focus on the most material environmental and social risks associated with each activity. As the methodology paper notes, determining the specific and most likely risks for these areas should be achieved with further market engagement.

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

Using Canadian laws and regulations as the baseline requirement is practical, consistent with approaches adopted in other jurisdictions, and provides a clear minimum standard for compliance.
At the same time, legislation should be viewed as a floor rather than a ceiling. Where there are material environmental or social risks that are not adequately addressed through existing legislation, sector-specific criteria may be appropriate to ensure credibility, consistency and alignment with the framework's objectives.

We also recognize that existing laws may be inadequate to address MSS assessment criteria for Indigenous rights. We strongly encourage direct consultation with Indigenous People to ensure that MSS assessment criteria adequality reflects the unique risks posed to Indigenous rightsholders.

7. In which areas, if any, is it necessary to go beyond existing laws and standards for the DNSH/MSS framework?

Potential areas include:

• Indigenous rights and engagement, particularly where legal requirements may not fully reflect expectations regarding meaningful economic participation and free, prior and informed consent (FPIC)
• Biodiversity and ecosystem impacts, where regulatory requirements may vary by jurisdiction or be too narrow in focus (e.g. focused on habitat, but not wildlife)
• Supply chain and human rights considerations, where impacts may occur outside Canada and beyond the direct scope of domestic legislation
• Economic inequality, where projects may have downstream negative impacts for perceived economic fairness and social cohesion

Any requirements that exceed legal standards should be focused on addressing material risks and should balance ease of implementation.

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?

Strongly agree

8b. Please explain your answer in the space below

Requirements should be proportionate primarily to environmental and social risk, and secondary to project/entity size and complexity. This is consistent with the proportionality principle contained in the Canadian Sustainability Disclosure Standards.

A proportional approach would:
• Reduce unnecessary reporting burden for smaller entities and projects, thereby encouraging usability
• Improve accessibility and participation in the taxonomy
• Allow greater scrutiny and disclosure expectations for activities with larger potential environmental or social impacts
• Better align reporting effort with the significance of the risks involved

While disclosure requirements may differ, the underlying principles and objectives of the DNSH/MSS framework should remain consistent across all participants. The Taxonomy may also consider minimum thresholds that apply to all projects/entities regardless of size or complexity.

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

One potential gap is the absence of a framework for differentiating between material and non-material harms.
Not all environmental and social impacts are equally significant, and the framework should provide guidance on assessing materiality.

This gap may be especially pertinent given the proposed partial alignment approach. For example, if a proposed activity does not meet all DNSH criteria then then a judgement will need to be made on the significance of any residual impacts.

Another potential gap is the lack of guidance on how residual impacts and trade-offs should be disclosed. Without a consistent disclosure framework, users may find it difficult to compare activities and understand the significance of remaining risks.

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 framework should align with the principles of UNDRIP, the recommendations of the Truth and Reconciliation Commission of Canada’s Calls to Action and encourage processes that support Free, Prior, and Informed Consent while recognizing the diversity of projects, communities and legal contexts across Canada. The objective should be to promote transparency, accountability and meaningful participation rather than reducing complex engagement processes to a simple pass/fail assessment. The MSS framework should establish clear expectations for meaningful Indigenous engagement and transparent disclosure of processes and outcomes.

Rather than relying solely on binary determinations, proponents should disclose:
• How Indigenous communities were engaged
• The timing and nature of engagement activities
• Risks and opportunities raised by Indigenous rightsholders
• Measures taken to address those risks and opportunities
• Any ongoing commitments, monitoring, equity participation, supplier or benefit-sharing agreements

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

The CCIB consultation submission notes that the inclusion of Indigenous rights within the proposed MSS framework is underdeveloped. In particular, CCIB notes that “operationalizing Free, Prior, and Informed Consent (FPIC) requires clear, enforceable standards that respect Indigenous governance structures and decision-making timelines, rather than procedural consultation alone.” They further recommend that “MSS assessments explicitly consider the extent to which projects deliver Indigenous procurement and local economic benefits, in addition to consent processes.”

We affirm these positions, and further support practical and specific measures to ensure that Indigenous rights are protected in the context of taxonomy-aligned financing.

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

Strongly agree

12b. Please explain your answer in the space below

This approach sets a high bar for green categorization and appears consistent with other international taxonomies (thus supporting the principles of credibility and interoperability).

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

Strongly agree

13b. Please explain your answer in the space below

Through our work with clients in the industrial and infrastructure sectors both domestically and globally, we understand that there is a substantial need for transition investments. The transition category will support decarbonization in key sectors without introducing new risks of carbon lock-in.

We agree with the decision to exclude sectors with declining or no demand in Paris-aligned pathways.

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

While the stated guardrails seem reasonable in principle, they lack sufficient specificity to be practically applicable. In particular, there is no explanation of what is considered “technically feasible” as a zero or near-zero substitute for the purposes of assessing whether an activity can be included in the transition category. There is also insufficient detail on what would be considered an acceptable net-zero pathway for scope 1 emissions. We understand that taxonomy will consider certain criteria in determining the technical feasibility of alternatives, including market readiness, potential scalability of alternatives, availability of infrastructure etc. We encourage the taxonomy to provide transparency into this decision process and, where applicable, the sources of information utilized to make those determinations.

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

Neutral

15b. Please explain your answer in the space below

We understand that the proposed taxonomy is intended to serve two related but distinct objectives:

• Align capital allocation with the goals of the Paris Agreement by identifying activities that are compatible with a net-zero future; and
• Support achievement of Canada's legislated net-zero targets by directing capital toward significant emissions reductions.

These objectives are not always aligned, and this distinction is central to the question of whether an abatement category should be included.

From a Paris-alignment perspective, a credible taxonomy should remain firmly anchored in climate science and direct capital toward activities that are demonstrably compatible with a net-zero economy. This supports investor confidence, efficient capital flows and international interoperability.
From the perspective of achieving Canada's emissions-reduction targets, there is a legitimate case for directing capital toward activities that deliver meaningful and measurable emissions reductions, even where those activities clearly do not otherwise qualify as green or transition-aligned.

If the taxonomy retains an abatement category, we recognize the rationales for doing so:

• Emissions abatement is an urgent priority to address the climate crisis.
• Reducing emissions in the near term and transitioning away from fossil fuels over the long term are not mutually exclusive objectives.
• Some abatement measures can deliver meaningful emissions reductions during the transition, particularly in sectors that will remain significant sources of emissions.
• A separate category appropriately distinguishes investments that reduce emissions from those that are fully aligned with a net-zero future.

However, any abatement category should be narrowly scoped and supported by robust guardrails, including:
• Minimum thresholds for qualifying emissions reductions;
• High MSS/DNSH thresholds
• Strong measurement, reporting and verification requirements;
• Financing structures directly linked to emissions-reduction outcomes (i.e. only allow use for sustainability-linked instruments)

Despite this, we remain concerned that an abatement category may conflict with the core objectives of the taxonomy. Key concerns include:

• International precedent: A distinct abatement category may reduce interoperability and comparability with other taxonomy frameworks.
• Enforceability challenges: While guardrails may exist at the point of classification, there is no guarantee that projected emissions reductions will materialize in practice.
• Carbon lock-in risks: Investments may improve the economics or extend the operating life of emissions-intensive assets.
• Capital crowding-out: An abatement category could divert capital from green and transition activities that are more directly aligned with a net-zero economy and may deliver greater emissions reductions per dollar invested.
• Credibility concerns: In our experience, many sustainable finance market participants continue to face challenges measuring and attributing emissions reductions associated with financing activities. This raises questions about whether outcome-based guardrails can be enforced with sufficient rigor to preserve confidence in the taxonomy.

More fundamentally, taxonomy classification is not the only means by which capital can be directed toward emissions-reduction activities. Investments that do not qualify under the taxonomy can continue to receive financing through other channels. For this reason, we question whether facilitating abatement in demand-decline sectors is an appropriate role for taxonomy-aligned finance.

16. Should any additional guardrails be considered?

The credibility of the abatement category will depend less on its existence and more on the enforceability and strength of its guardrails, transparency, and governance.

In general, we support guardrails that:
• Require measurable, comparable and verifiable net emissions reductions. Emissions reductions on the selected activity should not lead to greater emissions elsewhere (e.g., if captured carbon is used to extract more fossil fuels)
• Prevent the category from being interpreted as a green designation or in any way aligned with the Paris agreement
• Impose higher threshold DNSH and MSS criteria given the likely workforce risks in a demand-decline sectors
• Ensure transparency regarding expected and actual emissions outcomes
• Periodically review eligibility criteria to reflect technological, policy and market developments
• Maintain alignment with Canada's broader climate objectives and net-zero commitments

Additional considerations could include:
• Transparent reporting on the potential for lock-in risk and how that risk is being managed
• Sunset or review provisions for activities that may be appropriate as abatement measures today but become less appropriate as lower-carbon alternatives mature

17. Is there any other feedback you would like to provide on the proposed activity classification framework?

The proposal for an abatement category makes sense considering the context of Canada's unique economic and geopolitical circumstances. While the ultimate objective remains consistent with other leading taxonomies, Canada has faced a distinct challenge in balancing emissions reductions with economic competitiveness, energy security, and regional economic stability during a period of heightened geopolitical uncertainty. These pressures do not necessitate a lower standard and may require a more nuanced approach to identifying and financing emissions reductions in sectors that remain economically significant.

If supported by robust guardrails, clear disclosure requirements and strong governance, the abatement category has the potential to achieve outcomes that are consistent with those sought by other taxonomy frameworks while improving the usefulness of the taxonomy as a whole. Concerns regarding reduced credibility, interoperability, or carbon lock-in are important considerations.

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 approach to developing screening criteria appears reasonable and consistent with practices from jurisdictions.

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

Very important

20. When thinking about the taxonomy’s credibility and usability, how technologically specific or prescriptive should the technical screening criteria be?

We agree with the report’s stated intention to, wherever possible, use quantitative criteria that are already familiar to market actors. Criteria needs to be technically sound without creating needless reporting burden or increased transaction costs.

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?

We agree with the approach to focus on scope 1 emissions, while incorporating material scope 2 and 3 emissions as appropriate into the technical screening criteria on a sectoral basis.

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

Very 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 acknowledge and commend the substantial work by the Taxonomy and Transition Planning Council and Business Future Pathways to develop the North Star Methodology. The report presents a significant step forward in Canada’s readiness to implement a sustainable finance taxonomy and builds on the valuable efforts and recommendations of Canada’s Sustainable Finance Action Council.

We appreciate that Canada’s context as a major fossil fuel producer will present unique challenges for meeting Canada’s legislated emissions reduction targets and for achieving the ambitions of the Paris Climate Agreement. We also appreciate the efforts to balance these tensions through innovative measures, including the proposed abatement category. Where Canada’s taxonomy will depart substantially from international norms, we strongly encourage the Planning Council to carefully balance the Taxonomy’s proposed design principles. For example, if an abatement category will significantly harm the credibility or interoperability of Canada’s taxonomy, then it should be re-considered.

We also acknowledge a few areas for further elaboration:
• Direction on how entities and activities will share information to demonstrate alignment with technical screening criteria
• Direction for companies and investors on how they can aggregate taxonomy-aligned activity at the entity and fund levels for reporting purposes
• Further information on how Indigenous rights and Indigenous knowledge will be integrated across the MSS/DNSH and technical screening criteria
• Detailed proposed guardrails for the abatement category we understand that these are proposed for 2027 development. We advise putting these guardrails out for consultation prior to finalizing the decision over the inclusion of an abatement category

We thank the Taxonomy and Transition Planning Council and Business Future Pathways for your expeditious efforts and the thoughtfulness and care with which you have undertaken this work.