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
- Pollution prevention and control
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
As a global asset manager, we support efforts to improve market clarity, comparability and confidence in climate-aligned investment. Our comments focus on the areas most relevant to our business and to the credibility and usability of the taxonomy.
While third party taxonomies do not form an important part of our investment processes, we recognize that some investors use these to identify climate-aligned activities and measures.
Alignment across sustainability objectives, industrial policy and financial-services policy is critical to creating the economic incentives needed for investment in activities that support environmental goals. A taxonomy should therefore be viewed as one part of a broader sustainable-finance architecture rather than as a substitute for those measures.
We agree with the emphasis on credibility, usability and interoperability. Future phases should prioritise climate adaptation/resilience and pollution prevention and control, given their relevance to physical risk, investment resilience and environmental integrity.
We consider a dynamic approach important so that the taxonomy can evolve over time. We regard regional specificity and prioritisation as less important than credibility, usability and interoperability.
A Canadian taxonomy should align closely with robust international standards and frameworks. Without a high degree of interoperability, it risks becoming an additional administrative complication for investors applying it alongside other taxonomies. The taxonomy should minimise reporting burdens; requirements should be practical enough to support market uptake without compromising credibility.
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
- Not that important
- Prioritized
- Not that 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?
Agree
12b. Please explain your answer in the space below
We support limiting the green category to activities that are already at, or directly enable, zero or near-zero emissions. This boundary should help maintain scientific credibility, reduce greenwashing risk and improve consistency across markets.
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 support the principle of a credible transition category for activities with materially high emissions today where significant decarbonisation is achievable but requires substantial investment. Typically, we find activities and companies in this area can offer attractive investment returns, alongside a material contribution to global transition. However, insofar as taxonomies necessarily define activities whereas abatement is an outcome delivered over time, applying taxonomy principles is challenging. Establishing criteria here will require a different perspective, emphasizing the transition delivered rather than only activities able to transition.
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 proposed guardrails provide a strong starting point. Credibility would be strengthened by relevant entity-level disclosures, including credible transition plans where a transition label is used. Guardrails should remain practical and proportionate to support usability.
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?
Disagree (i.e., disagree because of how category is designed)
15b. Please explain your answer in the space below
We do not believe an abatement category is necessary within a voluntary sustainable-finance taxonomy. It faces the same inherent challenge as the transition category in that abatement is delivered over time, not defined only by exposure to specific activities. Any such category should be included only if robust safeguards prevent carbon lock-in and protect the credibility of the green and transition categories.
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?
If an abatement category is introduced, safeguards should include clear restrictions on activity expansion, robust requirements addressing material Scope 3 emissions reductions, entity-level transition planning and periodic review as technologies and transition pathways evolve.
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?
Select
Final questions
22. Overall, how satisfied are you with the proposed sustainable finance taxonomy framework?
Select
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 taxonomy should serve as a guiding framework and should not be the sole determinant of whether an activity or investment is considered sustainable.
In summary, we believe the taxonomy will be most effective if it is credible enough to support investor confidence, usable enough to be adopted in practice and interoperable enough to remain relevant to international capital markets. These objectives should guide the next phase of technical work.