Climate and ESG related disclosure standards are one step closer in Canada.
In March, the Canadian Sustainability Standards Board (CSSB), an organization formed to advance the adoption of sustainability disclosure standards in Canada, proposed Canadian Sustainability Disclosure Standards (CSDS) for public comment. CSDS are designed to align with the global baseline standards, developed by the International Sustainability Standards Board (or ISSB), but with modifications to serve the Canadian public interest. CSSB seeks comment on their first proposed set of disclosure standards, CSDS1 and CSDS2, following which “standards that are necessary to support climate-related disclosures” are likely to be incorporated by Canadian Securities Administrators (CSA) into its own rule and policy making process.[1] This is all intended to address what is perceived to be misleading or inaccurate promotion and even “greenwashing” that capitalizes on the lack of disclosure standards in effect for public companies.
Several Proposals Open for Public Comment
The proposals released by the CSSB are outlined in several documents:
- CSDS 1, General Requirements for Disclosure of Sustainability-related Financial Information
- CSDS 2, Climate-related Disclosures
- Criteria for Modification Consultation Paper
The disclosure standards are set up to align with the IFRS S1 and IFRS S2 global baselines released in 2023 but differ slightly to serve needs specific to Canada (e.g. by changing timelines and staggering implementation). The CSA – whose mandate is specific to capital market regulation – will then re-purpose only those aspects of the Canadian-purposed CSSB standards that are relevant to its own instruments and policies related to climate disclosure and practice. The comment period extends until June 10, 2024. Should you have any questions around how these upcoming standards are likely to impact your continuous disclosure obligations, someone from our business law group would be happy to discuss.
[1] Canadian securities regulators issue statements on proposed sustainability disclosure standards and ongoing climate consultation