HomeMy WebLinkAboutCanadian Sustainability Standards Board - Briefing Notes (1)The Canadian Sustainability Standards Board (CSSB) is rushing the development of
“sustainability- and climate-related disclosures” for Canadian businesses – also
known as the Canadian Sustainability Disclosure Standards (CSDSs)1. These proposed
standards will set a new benchmark for Canadian businesses to disclose their exposure to
climate related risks as well as their carbon dioxide (CO2), or carbon dioxide equivalent
(CO2-e), footprint in their financial statements. This will help financial institutions determine
which businesses to back and which to avoid in the pursuit of a net-zero future.
Why the rush? The CSSBs public consultation is only open for 90 days. They state they are
aiming to strike a balance between the urgency of global sustainability demands and the
needs of entities, to foster a more effective and manageable implementation of the CSDSs.
Who is behind “global sustainability demands”? The demand for sustainability- and
climate-related disclosures is driven largely by climate activist groups2 with ambitions to
limit humanity’s impact on nature3, and institutional investors4 who are responding to the
uncertainty of the climate transition risks purposefully created by the net-zero policies of
governments like Justin Trudeau’s Liberals.
What are shareholders demanding? Initiatives such as Climate Action 100+ are flagging
and tracking key shareholder proposals and management votes during proxy season 5.
Shareholder voting results typically defeat climate activist shareholder proposals that
would erode a company’s value6.
The CSDSs will be voluntary until they are made mandatory by Legislators and
Securities Regulators. Canada’s regulators and legislators would determine whether to
mandate the CSDSs, who would need to apply the standards, and when. The Canadian
Securities Administrators (CSA) said it would consider the final CSSB standards for
incorporation into a CSA rule, to become mandatory under Canadian securities legislation7.
The CSSB states that the proposed CSDS 1 and CSDS 2 are intended for use by publicly
accountable enterprises, do private companies have anything to worry about? Others
in supply chains may need to comply as they get caught with Scope 3 reporting requirements.
Call to Action. Submit a response letter to the CSSB public consultation by their June 10,
2024 deadline, cc your MLA and MP.
1 https://www.frascanada.ca/en/sustainability/projects/adoption-csds1-csds2/cssb-in-brief-csds-1-and-
csds-2
2 Glasgow Financial Alliance for Net Zero About Us | Glasgow Financial Alliance for Net Zero (gfanzero.com)
3 Mark Carney COP15 Speec, available at https://assets.bbhub.io/company/sites/63/2022/12/Mark-
Carney_COP15-Speech.pdf
4 2022 Global Investor Statement to Governments on the Climate Crisis, available at
https://theinvestoragenda.org/focus-areas/policy-advocacy/
5 https://www.climateaction100.org/approach/proxy-season/
6 2023 Proxy Season: More Proposals, Lower Support, available at
https://corpgov.law.harvard.edu/2023/06/01/2023-proxy-season-more-proposals-lower-support/
7 https://www.securities-administrators.ca/news/canadian-securities-regulators-issue-statements-on-
proposed-sustainability-disclosure-standards-and-ongoing-climate-consultation/
Want to Learn More?
On-demand Webinar – Proposed Canadian Sustainability Disclosure Standards and
Criteria for Modification Framework8
KPMG ESG Reporting Update – April 20249
The Greenhouse Gas Protocol: Corporate Value Chain (Scope 3) Accounting and
Reporting Standard10
8 https://www.frascanada.ca/en/sustainability/projects/adoption-csds1-csds2/webinar-proposed-
canadian-sustainability-disclosure-standards
9 https://kpmg.com/ca/en/home/events/2024/04/esg-reporting-update.html
10 https://ghgprotocol.org/corporate-value-chain-scope-3-standard