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For the Canadian financial services sector, ESG issues and climate change-related initiatives remain with an ongoing focus at the forefront. While the framework for climate change disclosures developed by the Financial Stability Board (FSB) and the Task Force on Climate-related Financial Disclosures (the TCFD Framework) has received widespread support from businesses and governments, the federal government has been more sceptical to this direction.
Canadian Securities Administrators (the national body that represents the provincial and territorial securities administrators, referred to as the “CSA”), has recently announced how serious it is about preventing deceptive or misleading communications around responsible investment products. However, it remains to be seen whether regulators will get tougher with respect to ESG disclosures. The CSA is using guidance to steer fund companies in the right direction. Moreover, it seems that the CSA is taking a more cautious and arguably softer approach compared to the European Commission and their SFDR framework.
Stakeholders are increasingly looking for companies to disclose long-term inclusion and diversity strategies. However only half (51%) of the top companies in Canada provide short-, medium- and/or long-term timelines for their ESG targets. ESG integration practices in Canada are more prevalent among equity practitioners than among fixed-income practitioners.
Globally, there is an increasing litigation trend demanding greater transparency about an issuer’s climate-related risks and Canadian entities should be prepared for the following types of lawsuits:
– Misrepresentation & inadequate disclosure
– Shareholder activism: globally, shareholder activism over climate change issues is accelerating and this trend is expected to grow in Canada. Shareholders may seek access to board and management decision records, to check company conduct is consistent with public ESG commitments.
Financial sector initiatives and beyond
There are signs that the financial services sector is independently moving towards implementation of TCFD Framework-style disclosures. The Canadian Bankers Association recently disclosed that all large banks are working to implement the TCFD Framework disclosure regime, while several Canadian asset management operations, including those owned by the Royal Bank, the Bank of Montreal and the Bank of Nova Scotia mandate adherence to the disclosure standards of the TCFD Framework.
CSE’s flagship course, the Certified Sustainability ESG Practitioner Program, LEADERSHIP EDITION 2022, Digital Version on April 7-8 & 11, will naturally gravitate to Energy and Finance. Even outside these sectors, sustainability touches all the companies which have anything to do with energy, water, agriculture, population and waste. That means all companies.
The Leadership Edition is designed for CEOs, corporate leaders and C-suite executives with more than 10 years of working experience in the field, from all the sectors of the global economy who want to address key Sustainability ESG challenges and develop a sustainability vision and strategy, improve branding and ESG ratings, reduce stakeholder-related risks and lead sustainable companies to deliver economic returns reach global Sustainability ESG goals and understand evolving international laws.
Reach us at [email protected] for early bird and group discounts.
This spring get certified as a Sustainability ESG Practitioner and get certified with the new GRI universal standards
