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The Canadian Sustainability Standards Board (CSSB), in collaboration with the International Sustainability Standards Board (ISSB), recently announced the appointment of their next cohort of members. This includes representation from various provinces in Canada, as well as the resource-based sectors. With this development, the Board is now in “decision-making mode,” following the release of the ISSB’s initial standards – IFRS S1 and S2. This marks a significant milestone for Canada as it takes its first step towards adopting and implementing ESG reporting & sustainability financial disclosure standards across industries. Notably, the inclusion of high-emitting sectors like oil and gas, mining, energy, and agriculture is crucial, considering the focus of IFRS S2 on climate-related disclosure requirements, as stated by Kevin Nye, co-chair of the CSSB Implementation Committee.
The Canadian Securities Administrators (CSA) also expressed their support for the ISSB, commending their efforts in developing a global framework for investor-focused disclosure that addresses the market’s demand for more consistent and comparable disclosures. Given the Government of Canada’s commitment to mandatory climate-related financial disclosures based on the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and its support for the ISSB initiative, it is highly likely that elements of the ISSB’s standards will be incorporated into Canadian reporting requirements in the near future.
On top of these developments, the Canadian Investment Funds Standards Committee (CIFSC) has already introduced the Responsible Investment Identification Framework. The framework aims to assist advisors, investors, and fund manufacturers in aligning with common definitions of responsible investing approaches. While not exhaustive, it provides a useful tool by listing 383 funds and identifying their alignment with responsible investing methods.
Current stage of ESG disclosure among Canadian companies
While ESG reporting is not currently mandatory in Canada, except for federally regulated financial institutions (banks and insurance companies), there is a growing trend towards ESG reporting and disclosure throughout the Canadian business landscape.
As a result, Canadian companies are at various stages of their climate reporting development. Some have yet to initiate ESG reporting, while others are internally tracking ESG-related information to prepare for future regulatory requirements. Many major financial institutions and large market companies, aligned with the Paris Agreement’s net-zero carbon emissions targets, have already begun voluntarily submitting ESG sustainability or TCFD compliance reports. These companies are ahead of the curve and are now focused on refining their disclosure practices.
With responsible investing gaining significant traction in the finance sector, Canadian companies seeking to raise capital should prioritize disclosure requirements, regulatory compliance, and corporate governance. In terms of climate reporting, greenhouse gas emissions reporting, particularly scope-3 reporting related to supply chain emissions, raises significant concerns. The key challenge lies in collecting reliable and transparent data from third parties.
CSEs competitive advantage
If you are uncertain about your next steps in navigating the ever-changing ESG landscape, CSE is here to help. As a leader in sustainability transformation for companies and organizations worldwide, we offer specialized Certified Training Programs, Sustainability Academy online courses, and sector-specific integrated consulting services.
CSE stays up-to-date with the latest trends and updates in the ESG field, regularly updating our training courses to incorporate the latest legislations and ESG tools. Our goal is to provide sustainability C-suite executives and professionals with the knowledge and tools they need to tackle any sustainability and ESG-related challenge.
Join us for our upcoming CANADA | Certified Sustainability (ESG) Practitioner Program, Leadership Edition 2023, Digital Version with Live Zoom Sessions, taking place on October 19-20 & 23, 2023. This program will equip companies with the latest practical tools and resources necessary to implement or enhance corporate sustainability, improve ESG ratings, and create successful ESG and sustainability strategies that generate value.
