Canada Sustainability Reporting Regulation
Canadian regulators are paying more attention to businesses’ sustainability reporting. The Canadian Securities Administrator (CSA) issued their proposed draft climate-related disclosure (NI 51-107) rule in October 2021. And the Office of the Superintendent of Financial Institutions (OSFI) issued its final Guideline B-15, Climate Risk Management in March 2023.
The good news for Canadian companies is the current and proposed sustainability reporting requirements are built on the Taskforce on Climate-related Financial Disclosures (TCFD) foundation, which forms the basis for many voluntary reports, as can be seen in the illustration below.
Click to enlarge imageWho’s impacted?
CSA NI 51-107: Venture and non-venture issuers
OSFI Guideline B-15: All federally regulated financial institutions, except foreign bank branches
What’s the latest?
The CSA announced in March 2024 that, once the consultation on the Canadian Sustainability Disclosure Standards (CSDS) is complete and they are finalized, the CSA anticipates that they will seek comment on a revised rule to NI 51-107 – Disclosure of Climate-related Matters. The CSA also stated that they may consider additional modifications considered appropriate for Canadian capital markets. The CSA also noted that they expect only adopting provisions of the CSDS necessary to support climate-related disclosures.
OSFI announced on March 20, 2024 updates to its climate regulation, Guideline B-15 to align the disclosure expectations in the Guideline’s Annex 2-2, Minimum mandatory climate-related financial disclosure expectations to the IFRS S2 Climate-related Disclosure requirements.
What do Canadian CPAs need to know?
While neither the IFRS Sustainability Standards or the CSDS are mandatory in Canada right now, the signals from the CSA are that they intend to adopt certain provisions from the standards to support climate-related disclosure.
OSFI’s climate-related regulation, B-15 is already in force and is requiring certain federally regulated financial institutions to report beginning in 2024.
It is not just companies that are regulated by the CSA or OSFI that will be impacted. These regulations may require certain disclosures pertaining to the regulated entity’s value chain, which means companies that sit within the value chain of a regulated entity may be asked to provide information to the regulated entity. Refer to our article, Why Businesses Can’t Ignore Sustainability for more information.
Where can I learn more?
For more information, please refer to our At a Glance: Sustainability Reporting Standards and Regulations and related FAQs.
You can also refer to:
CSA NI 51-107
CSA Announcement, March 13, 2024
OSFI B-15