Part 1: The Future of Sustainability Reporting in Canada: Unveiling the CSSB’s Proposed Standards

Bridging Global and Local in Sustainability Reporting

In a groundbreaking move on March 13, 2024, the Canadian Sustainability Standards Board (CSSB) introduced its inaugural Proposed Sustainability Disclosure Standards. This initiative is set to redefine the landscape of sustainability reporting in Canada, aligning it with global benchmarks while tailoring to the unique Canadian context.

Understanding the Proposed Standards: A Dual Framework

The CSSB’s proposal comprises two pivotal standards: General Requirements (CSDS 1) and Climate-related Disclosures (CSDS 2). Moreover, these standards are designed to integrate with the International Sustainability Standards Board’s (ISSB) IFRS Standards, thus ensuring global relevance and consistency. Hence, they aim to provide a comprehensive view of sustainability-related risks and opportunities, emphasizing governance, strategy, risk management, and metrics.

Key Highlights of the Proposed CSSB ‘s Standards:

General Requirements (CSDS 1)

CSDS 1 establish the framework for sustainability disclosures, emphasizing the necessity for entities to report financial information influenced by sustainability matters. Furthermore, these standards mandate the inclusion of all significant sustainability-related issues that affect financial performance, ensuring that disclosures are comprehensive, neutral, and free from material error.

Climate-related Disclosures (CSDS 2)

CSDS 2 focus on the specific requirement for entities to report on how climate change impacts their financial status and performance. Moreover, this includes detailing the risks and opportunities posed by climate change, the entity’s resilience under different climate-related scenarios, and how climate-related issues are integrated into the entity’s overall risk management.

This is a crucial window for businesses and other stakeholders to contribute their insights and help shape the future of sustainability reporting in Canada. CSSB seeks feedback on Exposure Drafts until June 10, 2024, focusing on:

• Extending the one-year transition relief within IFRS S1 to two years for broader sustainability-related risks and opportunities.
• Aligning sustainability reporting timing with financial statements.
• Assessing if providing transition relief and guidance on scenario analysis would assist preparers and users in evaluating climate resilience.
• Extending the one-year transition relief within IFRS S2 to two years for Scope 3 GHG emissions in CSDS2.

Transition reliefs under these standards are as follows:

• Disclosures beyond climate: if an entity adopts the proposed standard starting 1, 2025, it must disclose all sustainability-related risks and opportunities from Jan. 1, 2027.
• Comparative information: if an entity adopts the standard from 1, 2025, and delays reporting on sustainability-related risks and opportunities, it must provide comparative information from Jan.1, 2028
• Scope 3 GHG emissions: if an entity adopts the standard from 1, 2025, it must disclose Scope 3 GHG emissions from January 1, 2027

Enroll in the Canada Certified Sustainability ESG Practitioner Program will take place on October 24-25 & 28, 2024 and gain the expertise to excel under the new CSSB standards.

The program will equip you with:

• In-depth knowledge of the CSSB’s Proposed Sustainability Disclosure Standards
• Practical skills for implementing effective sustainability reporting practices
• Insights from industry leaders and sustainability experts

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While, the core of the CSSB standards aligns with global benchmarks, the Canadian context takes center stage in Part 2. We’ll explore how these standards are adapted for Canadian businesses, along with opportunities for stakeholder input and the benefits for your organization. Stay tuned!