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Building a Sustainable Future: Regulations, Transparency, and Investor Action || Part 2

April 4, 2024
Building a Sustainable Future: Regulations, Transparency, and Investor Action

In Part 1, we explored the changing landscape of sustainability disclosure in Canada and the broader integration of sustainability into investment strategies. The journey towards a sustainable future continues as we delve into the challenges and opportunities presented by new regulations and the necessity for reliable sustainability data.

Building a Sustainable Future: Regulations, Transparency, and Investor Action



Challenges of Sustainability Data Reliability

The article discusses the complexities of obtaining clear, consistent, and reliable sustainability data. Investors are increasingly relying on in-house systems and audited disclosures to address these challenges, reflecting a critical area of focus in sustainability integration.


Navigating New Regulatory Landscapes: SFDR in Focus

As of January 2023, the Sustainable Finance Disclosure Regulation (SFDR) mandates financial entities to disclose how their activities negatively affect sustainability factors, such as environmental, social, and governance (ESG) issues. This includes the impact on environmental protection, social responsibilities, human rights, and anti-corruption efforts, encapsulated in the Principal Adverse Impact (PAI) statement requirement.


Building Trust Through Transparency and Accountability

To forge a path forward, investors and corporations alike must prioritize transparency and accountability. Enhancing sustainability governance capabilities, investing in measurement, and reporting systems, seeking third-party assurance, and engaging proactively with stakeholders are crucial steps to building trust and aligning investment strategies with sustainable outcomes.


Investor Support for New Reporting Regulations

Another recent survey from Workiva reveals strong investor support for new sustainability reporting regulations like the EU’s CSRD and the U.S. SEC’s climate rules. Most investors believe that access to quality ESG data will lead to superior investment decisions. Despite some political opposition to ESG initiatives in the U.S., a large majority of North American investors remain committed to their existing decision-making approaches, welcoming these new reporting mandates. The survey indicates a broad consensus on the importance of ESG data for evaluating long-term financial prospects.


Global Impact: CSRD’s Reach Beyond the EU

The Wall Street Journal suggests the CSRD requires over 10,000 non-EU companies to adhere to the EU’s classification system, which identifies economically sustainable activities. This involves detailed reporting aligned with the EU’s environmental sustainability criteria.


Shaping a Sustainable Future through Investment Practices

In conclusion, the latest trends in sustainability disclosure in Canada reflect a broader global shift towards impact and accountability in investment practices. As institutional investors adapt to these changes, their role in shaping a sustainable future becomes increasingly significant. By championing transparency, rigorous data management, and stakeholder engagement, they can not only navigate the complexities of the current landscape but also contribute to a more sustainable and equitable world.


Upcoming Opportunities for ESG Practitioner Certification

Business leaders in corporate responsibility, sustainability, ESG, communications, marketing, and investors’ relations are registered in the upcoming Certified Sustainability (ESG) Practitioner Program, to become certified and recognized as Sustainability ESG Practitioners by CSE, the Chartered Management Institute (CMI) and the CPD.

As always, CSE tailors the training program to the unique needs of participants. Claim your spot now and be the first to gain exclusive access to the results of CSE’s 7th annual research on ESG Reporting Trends – a comprehensive overview of leading ESG practices in major European, US, and Canadian companies.

Join other Senior Representatives of top Canada Corporations and Government Organizations seeking to learn how to navigate through the new regulatory landscapes for Climate Risk and ESG Disclosures.

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