CSA Hits Pause on Climate and Diversity Disclosure Rules Amid Global Shifts
As of last week, the Canadian Securities Administrators (CSA) has put a hold on its efforts to create a new obligatory climate-related disclosure rule. It has also ceased work on revisions to the current diversity-related disclosure needs. The move is a result of the recent changes in the US and across the world, and is intended to help Canadian markets and issuers cope with them.
The Chair of the CSA and CEO of the Alberta Securities Commission, Stan Magidson, has stated that as a result of the unprecedented changes in the worldwide economic and geopolitical terrain, the level of uncertainty and issues concerning competitiveness have arisen among Canadian issuers. The changes have compelled the CSA to take measures to ensure that Canadian markets have a greater ability to bounce back from global imbalances while becoming more competitive and more proficient.
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Needless to say, risks related to climate change comprise a common concern. So, securities law necessitates that issuers reveal material climate-related risks impacting their core business, just like revealing a host of other material data. In December 2024, the Canadian Sustainability Standards Board (CSSB) shared its introductory sustainability standards that are in sync with those issued by the International Sustainability Standards Board (ISSB). The standards issued by CSSB provide a voluntary disclosure structure for sustainability and climate-related disclosure, and are a helpful source of reference, especially for issuers who are getting their disclosures ready.
As far as diversity-related disclosure is concerned, it is compulsory for non-venture issuers to consistently share disclosure information concerning women’s representation on their boards and in executive officer positions. These disclosures must be based on the current requirements found under National Instrument 58-101 Disclosure of Corporate Governance Practices.
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On their part, the CSA will keep track of advancements in laws, both domestic and international, concerning climate-related and diversity-related disclosures. It will also reexamine both aspects shortly to make a note of relevant requirements for issuers to follow. Last but not least, the CSA will also continue to keep an eye on the disclosure practices followed by issuers to ensure that there are no discrepancies in disclosures, including greenwashing. Should the need arise, the CSA will offer advice and information as it sees fit.
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Source: CSAACVM
