CSA AVM on a green background

CSA to Review Climate-Related Disclosure and Reporting Requirements

March 23, 2017

MARCH 21, 2017 – The Canadian Securities Administrators announced their intention to review the climate-related disclosures prepared by large reporting issuers listed on the Toronto Stock Exchange. The three key components of this project include:

  1. Review of international disclosure requirements and voluntary frameworks. The increased scrutiny placed on climate-related disclosure has lead to the proliferation of voluntary reporting frameworks has culminated in the set recommendations by the Financial Stability Board’s Taskforce on Climate-related Financial Disclosures. CSA has announced it will “examine risk disclosure requirements related to climate change in other jurisdictions, as well as recently proposed voluntary disclosure frameworks.”
  2. Review of continuous disclosure by reporting issuers. CSA will be seeking to better understand potential and disclosed material risks and financial impacts associated with climate change and related governance processes. CSA’s review will likely echo a recent CPA Canada study on climate-related disclosures that shows how Canadian companies are beginning to integrate climate-related risks and opportunities into their regulatory disclosures and highlights the diversity in current approaches taken by reporting issuers.
  3. Consultations with investors and reporting issuers. Similarly to the engagement that occurred around the development of CSA Staff Notice 51-333, providing guidance on reporting of environmental issues, the CSA will consult with stakeholders during the course of this study. Interested parties should be prepared to engage and provide feedback shortly.

This announcement comes on the heels of the London Stock Exchange Group’s guidance document that declared the importance of issuers integrating climate change-related information into investor reporting and communications and calls from international bodies for more regulatory guidance on the subject. Read more on this in our recent blog.

The CSA plans to conduct this review in spring and summer of 2017 and will publish a report with their findings.

This is an important step to better understand the current state of climate-related disclosure to help ease the Canadian economy’s transition towards a low-carbon future and may result in clarification for reporting issuers, leading to better understanding and disclosure of climate risk across the economy.