Overview

On October 18, 2021, the Canadian Securities Administrators (CSA) published for comment proposed National Instrument NI 51-107, Climate-related Disclosure Requirements. The proposed requirements address the need for more consistent and comparable information to help inform investment decisions. They also demonstrate the CSA’s commitment in favor of the growing international movement toward mandatory climate-related disclosure standards.

The requirements are aimed at improving 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.

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.

On March 13, 2024, the CSA issued a statement where it welcomes the launch of the Canadian Sustainability Standards Board’s (CSSB) consultation on Canadian Sustainability Disclosure Standards 1 and 2 and encourage interested parties to share their views on these proposals.

It also reminds readers that to become mandatory under Canadian securities legislation, the CSSB standards must first be incorporated into a CSA rule. Once the CSSB consultation is complete and its standards are finalized, the CSA indicated that it anticipates seeking comment on a revised rule setting out climate-related disclosure requirements. The CSA proposal will consider the final CSSB standards and may include modifications appropriate for the Canadian capital markets. The CSA anticipates adopting only those provisions of the sustainability standards that are necessary to support climate-related disclosures.

The CSA continues to monitor and assess international developments in this area, including the United States Securities and Exchange Commission (SEC)’s climate-related disclosures rule approved on March 6, 2024.

Other de­vel­op­ments

March 2024

On March 13, 2024, the CSA issued a statement on proposed sustainability disclosure standards and ongoing climate consultation

January 2022

On January 20, 2022, the CSA extended the comment period by 30 days to February 16, 2022.

October 2021

On October 18, 2021, the Canadian Securities Administrators (CSA) published for comment proposed National Instrument NI 51-107, Climate-related Disclosure Requirements. The proposed requirements address the need for more consistent and comparable information to help inform investment decisions. Comments are requested by January 17, 2022.