Corporate Sustainable Disclosure Rules
The Canadian Securities Administrators (CSA) announces the suspension of the development of sustainable disclosure rules for companies to support Canadian listed companies in adapting to the global ESG industry.
The Canadian Securities Administrators believes that changes in the global ESG industry in recent months have led to increased uncertainty for Canadian listed companies. To improve market competitiveness and efficiency, and reduce corporate burden, the Commission has made this decision.
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Development of Canadian Sustainable Disclosure Rules
In March 2024, the Canadian Securities Administrators updated its ESG fund disclosure guidelines, dividing ESG funds into three categories: ESG Objective Funds, ESG Strategy Funds, and ESG Limited Consideration Funds. Regulatory requirements were made for their investment objectives, fund names, investment strategies, risk disclosure, and other aspects to reduce the risk of fund greenwashing.
In November 2024, Canada plans to introduce the Sustainable Investment Taxonomy, which defines green economy activities and transition economy activities, and prioritizes high carbon emission industries such as electricity, transportation, construction, agriculture, and heavy industry to provide reference for stakeholders in sustainable investment. Canada also plans to revise the Canada Business Corporations Act to include large private enterprises in climate disclosure requirements.
In December 2024, the Canadian Sustainability Standards Board (CSSB) released its first sustainability disclosure standard, which is aligned with the International Sustainability Standards Board (ISSB) standards and provides a voluntary sustainability disclosure framework for businesses.
In addition to suspending the development of sustainable disclosure rules for businesses, the Canadian Securities Administrators has also suspended requirements for diversified disclosure by businesses. The Canadian Securities Administrators plans to closely monitor domestic and international regulatory policy developments and re-examine whether to establish sustainable and diversified disclosure rules for listed companies in the coming years.
Listed companies can still voluntarily disclose information based on sustainable disclosure standards, and the Canadian Securities Administrators will consider providing additional guidance and addressing issues of misleading disclosure.
Reference:
CSA Updates Market on Approach to Climate-related and Diversity-related Disclosure Projects
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