Skip to main content

Canadian securities regulators seek comment on climate-related disclosure requirements

CSA logo

Calgary and Toronto – The Canadian Securities Administrators (CSA) today published for comment proposed climate-related disclosure requirements. The proposed requirements demonstrate the CSA’s commitment in favour of the growing international movement toward mandatory climate-related disclosure standards. They also address the need for more consistent and comparable information to help inform investment decisions.

The requirements contemplate disclosure largely consistent with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. They will improve the comparability of the information issuers disclose and help investors make more informed investment decisions by enhancing climate-related disclosure. The requirements are also intended to address costs associated with reporting across multiple disclosure frameworks, improve access to global markets and facilitate an equal playing field for issuers.

“We recognize some issuers already share certain climate-related information,” said Louis Morisset, CSA Chair and President and CEO of the Autorité des marchés financiers. “Our proposed requirements will bring those disclosures into a harmonized framework benefitting investors and issuers alike and aligning Canadian capital markets with the global movement towards mandatory standards.”

The proposed requirements contemplate disclosure by issuers related to the four core elements of the TCFD recommendations:

  • Governance – an issuer’s board’s oversight of and management’s role in assessing and managing climate-related risks and opportunities.
  • Strategy – the short-, medium- and long-term climate-related risks and opportunities the issuer has identified and the impact on its business, strategy and financial planning, where such information is material. As a modification from the TCFD recommendations, the proposed disclosure would not include the requirement to disclose “scenario analysis”, which is an issuer’s description of the resilience of its strategy within different climate-related scenarios, including a 2°C or lower scenario.
  • Risk management – how an issuer identifies, assesses and manages climate-related risks and how these processes are integrated into its overall risk management.
  • Metrics and targets – the metrics and targets used by an issuer to assess and manage climate-related risks and opportunities where the information is material.

Issuers would be required to disclose their Scope 1, Scope 2 and Scope 3 greenhouse gas (GHG) emissions and the related risks, or their reasons for not doing so. The CSA is also consulting on an alternative approach that would require issuers to disclose Scope 1 GHG emissions. Under this alternative, disclosure of Scope 2 and Scope 3 GHG emissions would not be mandatory.   
“With global momentum building on sustainability-related disclosures in both the public and private sectors, these proposals reflect our vision and expectations for reporting issuers as we move towards a global baseline for such disclosures,” said Morisset.

The disclosure requirements would be phased in over a one-year period for non-venture issuers and over a three-year period for venture issuers. This is intended to give companies sufficient time to plan for implementation.

The proposed disclosure requirements follow environmental and climate-related reporting guidance issued by the CSA in 2010 and 2019. The requirements also draw on extensive CSA engagement with stakeholders and address recommendations made by Ontario’s Capital Markets Modernization Taskforce on climate-related disclosures that were subsequently noted in the 2021 Ontario Budget. 

More details about the consultation, including a list of specific questions for stakeholders, can be found in CSA Notice and Request for Comment Proposed National Instrument 51-107 Disclosure of Climate-related Matters on the websites of CSA members.

Comments should be submitted in writing by January 17, 2022.

The CSA, the council of the securities regulators of Canada’s provinces and territories, co-ordinates and harmonizes regulation for the Canadian capital markets.

For media inquiries, please contact:

Pascale Bijoux
Canadian Securities Adminsitrators

Theresa Schroder
Alberta Securities Commission
Crystal Jongeward
Ontario Securities Commission

For investor inquiries, please contact your local securities regulator.