2021

CSA roundtable on ESG-related regulatory issues in asset management

Sep 30, 2021

In September 2021, the Canadian Securities Administrators (CSA) released a recording of a virtual roundtable it hosted on environmental, social and governance (ESG) related regulatory issues in asset management.

An expert panel discussed a number of regulatory issues arising from increased interest in ESG investing from Canadian investors and the investment fund industry. Panelists addressed the importance of enhancing ESG-related fund disclosure so that investors are not misinformed about the ESG-related aspects of a fund – known as “greenwashing” - and can make more informed investment decisions. The panel also explored the benefits and challenges associated with ESG-related fund disclosure from the perspective of asset managers, ESG ratings providers and retail investors.

Listen to the recording.

FSB roadmap for addressing climate-related financial risks

Jul 07, 2021

On July 7, 2021, the Financial Stability Board (FSB) has submitted to the G20 Finance Ministers and Central Bank Governors for endorsement a comprehensive roadmap to address climate-related financial risks. The roadmap outlines the work underway and still to be done by standard-setting bodies and other international organizations over a multi-year period.

The roadmap, which is ac­com­pa­nied by several document, including a report on promoting cli­mate-re­lated dis­clo­sures, notes that the goal of international ini­tia­tives in the area of financial dis­clo­sures must be to achieve globally con­sis­tent, com­pa­ra­ble, and de­ci­sion-use­ful public dis­clo­sures by firms of their cli­mate-re­lated financial risks. To further this overall goal, es­tab­lish­ing international standards is important, including ac­com­mo­dat­ing in­ter­op­er­abil­ity between a global baseline of international standards and national and regional ju­ris­dic­tion-spe­cific re­quire­ments.

Therefore, the FSB welcomes the IFRS Foun­da­tion’s program of work to develop a baseline global sus­tain­abil­ity reporting standard under robust gov­er­nance and public oversight, built from the TCFD framework and the work of an alliance of sus­tain­abil­ity stan­dard-set­ters, involving them and a wider range of stake­hold­ers closely, including national and regional au­thor­i­ties.

The FSB surveyed its members in the first half of 2021 to explore national/regional practices (current or planned) of financial au­thor­i­ties on promoting cli­mate-re­lated dis­clo­sures. The survey responses indicated that most ju­ris­dic­tions strongly support the de­vel­op­ment of a common global baseline of international reporting standards on climate, with many ref­er­enc­ing the ongoing work of the IFRS Foun­da­tion. They also signaled that international co­or­di­na­tion on re­quire­ments to cli­mate-re­lated dis­clo­sures is critical and that reg­u­la­tory and su­per­vi­sory frag­men­ta­tion must be prevented.

The roadmap notes that the FSB can play an important role in global co­or­di­na­tion, including promoting adoption of the an­tic­i­pated international reporting standards developed by the ISSB, once developed and if endorsed, as a global baseline. Such in­ter­na­tion­ally agreed standards for dis­clo­sures as a global baseline would not preclude au­thor­i­ties from going further or at a faster pace in their ju­ris­dic­tions. The FSB states that it will continue to act as an international forum for sharing ex­pe­ri­ences across ju­ris­dic­tions, promoting best practices, and con­tribute to dis­cus­sions in other international fora (such as through COP26 and G7 / G20 meetings) and will continue to support the IFRS Foun­da­tion’s work to develop a proposal for a baseline global sus­tain­abil­ity reporting standard under robust gov­er­nance and public oversight. As part of this work, the FSB en­cour­ages the IFRS Foun­da­tion to address the con­nec­tiv­ity between proposed sus­tain­abil­ity reporting standards to be developed by the ISSB and existing financial accounting standards. Con­di­tional on the en­dorse­ment of this standard, the FSB will encourage FSB member ju­ris­dic­tions to consider the ISSB’s standard for use for cross-bor­der purposes and when setting sus­tain­abil­ity-re­lated dis­clo­sure re­quire­ments, within the context of in­di­vid­ual ju­ris­dic­tions’ reg­u­la­tory and legal re­quire­ments and in a way that promotes con­sis­tent and com­pa­ra­ble sus­tain­abil­ity dis­clo­sures across ju­ris­dic­tions.

The actions and de­liv­er­ables are described in detail in the roadmap with an in­dica­tive timeline for each of these actions and de­liv­er­ables provided in tabular format on page 12 of the document. Please click for the following ad­di­tional in­for­ma­tion on the FSB website:

G20 Finance Ministers and Central Bank Governors support FSB roadmap, welcome IFRS Foundation Trustees sustainability initiative

Jul 10, 2021

The G20 Finance Ministers and Central Bank Governors met in Venice on July 9-10, 2021. Their final communiqué supports the FSB roadmap, welcomes the IFRS Foundation Trustees sustainability initiative and also comments on sustainability reporting.

The com­mu­nique notes that the Finance Ministers and Central Bank Governors welcome the FSB report on promoting globally con­sis­tent, com­pa­ra­ble and reliable cli­mate-re­lated financial dis­clo­sures and its rec­om­men­da­tions. They stress that they will work to promote im­ple­men­ta­tion of dis­clo­sure re­quire­ments or guidance, building on the FSB’s Task Force on Cli­mate-re­lated Financial Dis­clo­sures (TCFD) framework, in line with domestic reg­u­la­tory frame­works, to pave the way for future global co­or­di­na­tion efforts, taking into account ju­ris­dic­tions’ cir­cum­stances, aimed at de­vel­op­ing a baseline global reporting standard. The communiqué notes:

To that aim, we welcome the work program of the International Financial Reporting Standards Foun­da­tion to develop a baseline global reporting standard under robust gov­er­nance and public oversight, building upon the TCFD framework and the work of sus­tain­abil­ity stan­dard-set­ters, involving them and con­sult­ing with a wide range of stake­hold­ers to foster global best practices.

The G20 Finance Ministers and Central Bank Governors expressly welcome the FSB roadmap for ad­dress­ing financial risks from climate change submitted to them on July 7, 2021.

Please click to access the full communiqué on the G20 website.

The IFRS Foun­da­tion has responded to the Communiqué and has published on its website a statement by Erkki Liikanen, Chair of the IFRS Foun­da­tion Trustees.

Glass Lewis publishes proxy voting guidelines for 2022 AGMs

Nov 30, 2021

Glass Lewis has published its Canadian proxy voting guidelines for 2022. The key changes for the upcoming shareholder meeting season relate to board gender diversity, board committee composition, environmental and social risk oversight and multi-class share structures.

Review the guidelines.

IFRS Foundation Trustees discuss progress and next steps on establishing a new board focused on sustainability-related disclosure standards

Jul 19, 2021

The IFRS Foundation Trustees met by video conference on July 13, 2021 to discuss progress and next steps on establishing a new board focused on sustainability-related disclosure standards.

They were also updated about a recent meeting of some of the Trustees with the Mon­i­tor­ing Board that allowed the Trustees to provide a detailed update on progress and next steps in their work to establish the proposed International Sus­tain­abil­ity Standards Board. The Chair of the Trustees reported on his par­tic­i­pa­tion in a policy panel on reg­u­la­tions, dis­clo­sures, financial risk and private financing for the green economy. The Trustees also noted the G20 support for the IFRS Foun­da­tion’s work to establish a new board.

Please click to access the full meeting summary on the IASB website.

IIRC publishes its latest Annual Report, ahead of its merger with the SASB

Jun 03, 2021

On June 3, 2021, the International Integrated Reporting Council (IIRC) published its latest Annual Report, entitled ‘Driving Cohesion‘, ahead of its merger with the Sustainability Accounting Standards Board (SASB) to form the Value Reporting Foundation.

The report was developed through a process of integrated thinking led by the IIRC Board and management. The process enabled a better understanding of the strategic big picture and external environment to build agreement that the merger with SASB is the most effective next step to achieve its focus of driving adoption of integrated thinking and reporting and simplifying the corporate reporting landscape.

The report takes stock of the long shadow cast by the COVID-19 pandemic and its daily reminder of the interconnectedness between our economy and society, as well as the shared challenges we face as an international community.

The report also highlights some of the positive responses, including an acceleration in digital innovation, rapid business model adaption and a renewed commitment from political, business and investment leaders to “build back better” – integrating sustainability considerations into all aspects of financial and business decision-making, creating a platform for sustainable prosperity.

Re­view the press re­lease and report on the IIRC’s website for more in­for­ma­tion.  

IOSCO report on sustainability-related disclosures, speech by IOSCO Chair

Jun 29, 2021

The Board of the International Organization of Securities Commissions (IOSCO) has published a report on issuers’ sustainability-related disclosures that elaborates on IOSCO's vision and expectations for the IFRS Foundation’s work towards a global baseline of investor-focused sustainability standards to improve the global consistency, comparability and reliability of sustainability reporting. In addition, the manuscript of a speech by IOSCO Chair Ashley Alder on the 'crucial' IFRS global baseline has been made available.

The report, developed by IOSCO’s Sus­tain­able Finance Taskforce (STF), re­it­er­ates the urgent need to improve the con­sis­tency, com­pa­ra­bil­ity and re­li­a­bil­ity of sus­tain­abil­ity reporting for investors. It describes IOSCO’s en­gage­ment with the IFRS Foun­da­tion’s efforts to develop a common set of global sus­tain­abil­ity standards to help meet investor needs and to set a sound baseline for ju­ris­dic­tions to consider when setting or im­ple­ment­ing their sus­tain­abil­ity-re­lated dis­clo­sure re­quire­ments. It notes:

IOSCO recognizes that in­di­vid­ual ju­ris­dic­tions have different domestic arrange­ments for adopting, applying or otherwise availing of international standards. It will be important for in­di­vid­ual ju­ris­dic­tions to consider how the common global baseline of standards might be adopted, applied or otherwise utilized within the context of these arrange­ments and wider legal and reg­u­la­tory frame­works, in a way that promotes con­sis­tent, com­pa­ra­ble and reliable sus­tain­abil­ity dis­clo­sures across ju­ris­dic­tions.

In a speech given at City Week 2021 on June 23,  2021, IOSCO Chair Ashley Alder stressed the same point:

Within IOSCO, we fully accept that ju­ris­dic­tional-level ap­proaches are bound to differ. But for corporate reporting, it is essential that these domestic ap­proaches will be fully in­ter­op­er­a­ble with the emerging global baseline, avoiding the rule conflicts or overlaps that could devalue the overall effort. We cannot work in ju­ris­dic­tional silos when the climate emergency does not respect national bound­aries. It is ab­solutely essential that we resist frag­men­ta­tion, which is a real risk all reg­u­la­tors are very aware of.

Please click for the following ad­di­tional in­for­ma­tion:

In addition, the International Fed­er­a­tion of Ac­coun­tants (IFAC) has published a statement sup­port­ing IOSCO's approach (link to IFAC website).

M&A Outlook 2021

Jan 15, 2021

The coronavirus global pandemic has had a considerable impact on global M&A as corporations, financial institutions and funds have sought to adapt and respond to changes in their respective markets. Sentiment in M&A has always been affected by global trends, and while there is now greater uncertainty, M&A offers businesses and investors strategies to navigate new commercial and operational challenges Projections for 2021 indicate a buoyant M&A market as the global economy returns to a growth trajectory.

Mark Carney on a values-led economy

Jul 13, 2021

In an article posted by Strategy+Business on July 13, 2021, the former governor of the Bank of England argues for a fundamental rewiring of the financial system to confront global challenges.

Carney, has recently written a wide-ranging new book, “"Value(s): Building a Better World for All”. The 500-plus-page book lays out a framework for business leaders, investors, and policymakers as they embark on a green recovery. It’s also the latest rebuke of unfettered capitalism and free-market fundamentalism offered up by a high-profile figure from the world of finance.

In a recent interview with Strategy+Business from his home office in Ottawa, Carney spoke about the shape of the recovery and how businesses can contribute to a purposeful future.

For further details, see the article.

OSC announces temporary changes to service commitments

Dec 20, 2021

The Ontario Securities Commission (OSC) announced temporary changes to its service commitments in response to a significant and persistent increase in the volume and complexity of certain applications and filings. The changes extend timelines related to reviews of certain offering documents, compliance reviews, applications and other registration materials for which the OSC is principal regulator. The extended timelines will remain in effect from December 7, 2021 to June 30, 2022.

While the temporary changes to its service commitments are in place, OSC staff will not review pre-files for draft preliminary base shelf prospectuses or non-offering prospectuses under its confidential pre-file program. The temporary changes do not impact urgent and time-sensitive prospectus pre-filings, such as those involving bought deals and overnight marketed offerings.

As part of its annual review, the OSC will conduct a comprehensive evaluation of all its service commitments, including the applications and filings included in the temporary changes. The OSC will publish any further changes to its service commitments as a result of this evaluation at the end of Q1 2022 (June 30, 2022). All preliminary prospectuses and exemptive relief applications filed after December 7, 2021 will be processed under the temporary service commitments.

Review the press release and temporary changes on the OSC's website.

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