Like many other jurisdictions, Canada was on track to adopt climate-related financial risk reporting standards aligned with the ISSB. However, those plans are paused indefinitely following an announcement from the Canadian Securities Administrators (CSA). The CSA cites global economic and geopolitical uncertainty as drivers behind the decision to delay reporting standards.
“The CSA will monitor domestic and international regulatory developments with respect to climate-related and diversity-related disclosures and expects to revisit both projects in future years to finalize requirements for issuers. Issuers will be provided with appropriate notice ahead of any changes to the status of these projects. The CSA will continue to monitor disclosure practices of issuers and work to address any misleading disclosure, which can include greenwashing, and will provide information and additional guidance as appropriate.”
It appears that the CSA wants to avoid overburdening companies during a time of global economic uncertainty. Canada joins the US and EU in the list of countries walking back ESG disclosure rules. It’s unclear at this time whether Canada’s pause will be an isolated incident or if other countries, like the UK, will reconsider ISSB alignment. For the time being, the standards promulgated by the Canadian Sustainability Standards Board (CSSB) remain voluntary for Canadian issuers.
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