Canada issues climate disclosure guidance

The Canadian Securities Administrators (CSA) has become the latest securities regulator to step forward with guidance for quoted companies on climate change risk disclosures.

CSA Staff Notice 51-358 Reporting of Climate Change-related Risks is intended to assist companies in identifying and improving their disclosure of material climate change risks. The notice does not create any new requirements but clarifies existing legal requirements. It also reinforces and expands upon the guidance provided in CSA Staff Notice 51-333 Environmental Reporting Guidance. CSA Staff Notice 51-333 continues to provide guidance to issuers on existing continuous disclosure requirements relating to a broad range of environmental matters, including climate change.

The guidance was based on the CSA’s research, review and consultations on issuers’ disclosure of risks and financial impacts associated with climate change (the Disclosure Project).  As reported in CSA Staff Notice 51-354 Climate change-related Disclosure Project, the Disclosure Project found that institutional investors have become increasingly focused on climate change-related risks and are concerned that they they are receiving insufficient risk disclosure.

Helping investors and issuers

Commenting on the launch, Louis Morisset, CSA Chair and President and CEO of the Autorité des marchés financiers said: “We encourage directors and senior management of issuers to consider our guidance with respect to climate change-related risks. Many investors are seeking improved disclosure on the material risks, opportunities, financial impacts and governance processes related to climate change. The guidance provided by both of these notices will enable issuers to improve their disclosure of material climate change-related risks affecting their business.”

While the CSA recognises that climate-related disclosures are important for investors to make informed decisions, smaller issuers might find the reporting challenging. The CSA's notice is therefore intended to help issuers, particularly smaller issuers, by providing guidance on preparing the disclosure of material climate change-related risks.

The notice can be found on the websites of the participating jurisdictions.