The Canadian Sustainability Standards Board (CSSB) has published its final climate disclosure standards, which push out compliance deadlines — and securities regulators aren’t mandating their use just yet — meaning investors must wait for more useful disclosure of climate-related financial risks.
Following the release of the CSSB’s final standards on Wednesday, the Canadian Securities Administrators (CSA) said that it’s still working on its own rules for climate-related disclosures — which will factor in the CSSB’s work, but may not adopt it fully.
“The CSA continues to work towards a revised climate-related disclosure rule that will consider the CSSB standards and may include modifications considered appropriate for the Canadian capital markets,” the regulator said in a release.
In the meantime, the CSSB’s standards remain voluntary.
The CSA’s work in this area is potentially complicated by developments in the U.S., where the climate disclosure rules initially proposed by the U.S. Securities and Exchange Commission (SEC) faced strong pushback — including a legal challenge that led to its rules being stayed by a U.S. court while that process plays out.
And, the future direction of the SEC on climate disclosure has become increasingly uncertain, given the upcoming change in government, and the resulting turnover at the top level of the SEC.
The presumptive future head of the SEC, Paul Atkins, has spoken out against the agency’s latest climate disclosure rule — submitting a joint comment letter with other former SEC officials that criticized various aspects of the rule, including its focus on “decision useful” information for investors, rather than disclosing financially material information.
While the fate of the SEC’s rule remains to be seen, any shift in U.S. policy impacts the CSA too.
“Given the interconnectedness of our markets, we will be carefully considering developments in the United States,” the CSA noted in its statement today.
In the meantime, the Canadian regulator said that it “will continue to work towards a balanced approach that supports the assessment of material climate-related risks, responds to requests for consistent, comparable and decision-useful climate-related disclosures, and contributes to efficient capital markets, including considering the needs and capabilities of issuers of different sizes.”
The CSA said that it will be publishing a revised rule for public consultation, and expects to seek comment on specific issues, including the scope of application and whether there’s a need among reporting issuers for more time or guidance to comply with certain disclosure requirements.
In its final standards, the CSSB added extra time for users to transition to its new requirements, pushing out the compliance deadlines for the various aspects of the standards, including reporting scope 3 emissions, providing scenario analysis, and reporting on sustainability issues beyond climate, to 2028.
In addition to consulting on the scope and timing of its requirements, the CSA said that it will also be consulting on liability concerns over new requirements for climate-related disclosure.