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
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
- Dynamic
- Not that important
- Regionally Specific
- Important
- Prioritized
- Very 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?
Disagree
4b. Please explain your answer in the space below
A partial-alignment model improves transparency relative to no DNSH or MSS disclosure, and it may reduce implementation burden during the taxonomy’s early stages. However, DNSH and MSS are not ancillary disclosures. They are the conditions that prevent a climate-beneficial activity from shifting costs onto ecosystems, workers, communities, or Indigenous rights holders. A project that reduces emissions but materially damages biodiversity, pollutes water, breaches labour standards, or proceeds without appropriate respect for Indigenous rights should not be considered taxonomy-aligned.
The taxonomy could adopt a tiered model:
Aligned: Meets the climate technical screening criteria and all material DNSH and MSS requirements.
Remediation pending: Has limited, remediable gaps subject to a public corrective-action plan, defined milestones, independent monitoring, and a fixed deadline.
Not aligned: Has material ongoing harm, serious or repeated legal non-compliance, unresolved human-rights impacts, unresolved FPIC failures, or lacks credible remediation.
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
Indigenous rights must be included in the Minimum Social Safeguards given the Canadian context.
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
Given that the taxonomy will only focus on climate mitigation in the first phase, it is imperative that other ecological risks are not raised in the meantime (ex. mining for rare earths that contribute to a green economy creates massive toxic pollution). Minimum Canadian legislation may not be strong enough in the area of ecological risks.
7. In which areas, if any, is it necessary to go beyond existing laws and standards for the DNSH/MSS framework?
Set a higher DNSH floor than mere compliance with Canadian law where ecological risk warrants it. Legal compliance is necessary, not always sufficient, particularly for cumulative biodiversity loss, water stress, land-use change, etc. This is particularly important for mining, electricity transmission, forestry, agriculture, and large industrial projects.
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?
Disagree
8b. Please explain your answer in the space below
DNSH/MSS standards should be the same for all entities and all projects because the basis of DNSH is that avoiding harm is an immutable condition. The disclosure burden may be different for small/large firms but this is a different question (with a different outcome) than non-uniform DNSH standards (?) In the interest of one of the six principles outlined, "operable", the disclosure burden regarding DNSH should be minimized relative to the disclosure burden regarding positive environmental alignment. Smaller or lower-risk projects can face simpler documentation requirements, but they should not receive exemptions from substantive safeguards
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?
Strongly agree
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?
Strongly agree
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 transition category is only legitimate if eligibility is based on a demonstrable, activity-specific pathway, not an assertion that an activity might reach near-zero emissions by 2050, i.e. the question to ask is: is the financed asset consistent with a Paris-aligned cumulative carbon budget and a plausible commercial route to the green threshold. The question should not be whether it delivers an incremental improvement against today’s baseline.
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
A distinct abatement category is preferable to presenting emissions-reduction investments in demand-decline activities as green or transition-aligned. In Canada, targeted investments can materially reduce methane leakage, flaring, fugitive emissions, and operational energy use in existing oil and gas assets. Excluding these investments entirely may forgo cost-effective near-term emissions reductions.
However, abatement must not become a route for extending the economic life, production capacity, or financing access of activities that are incompatible with a Paris-aligned long-term demand trajectory. The category should therefore be described as short-term emissions abatement in demand-decline activities. Its inclusion should not increase a fund’s or issuer’s green or transition alignment percentage.
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 category should be designed around verified absolute emissions reductions within a declining production system, rather than improvements in emissions intensity or compliance with normal operating practice. Otherwise, capital could fund a lower-emitting oil barrel or unit of gas while total production, cumulative emissions, and carbon-lock-in risk continue to rise (i.e. the rebound effect).
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
Criteria should not rely primarily on emissions-intensity improvements. Intensity metrics are useful for comparing activities, but they can permit rising absolute and cumulative emissions if output expands. For material sectors, screening criteria should combine declining intensity thresholds with absolute-emissions, production, or cumulative-carbon-budget tests. The objective should be a "usable" taxonomy that remains anchored in physical emissions outcomes and Paris-aligned cumulative carbon budgets, rather than one that classifies investments as aligned because they are incrementally better than current practice.
Final questions
22. Overall, how satisfied are you with the proposed sustainable finance taxonomy framework?
Satisfied