For Immediate ReleaseMarch 21, 2017
Toronto and Calgary – The Canadian Securities Administrators (CSA) today announced a project to review the disclosure of risks and financial impacts associated with climate change. The project will gather information on the current state of climate change disclosure in Canada and internationally, and will include consultation with investors and reporting issuers.
The disclosure practices of public companies in relation to climate-related risks and financial impacts have attracted significant international attention in recent years. Several voluntary disclosure frameworks have been proposed, culminating in the publication in December 2016 of a set of recommendations by the Financial Stability Board’s Task Force on Climate-related Financial Disclosures.
“In light of the increased scrutiny being placed upon reporting issuers’ climate-related disclosure, we believe it is appropriate to review the state of such disclosure in Canada,” said Louis Morisset, CSA Chair and President and CEO of the Autorité des marchés financiers. “As securities regulators, it is important to assess whether issuers provide appropriate disclosure regarding risks and financial impacts associated with climate change, which in turn assists investors in making informed investment decisions.”
Reporting issuers in Canada are currently required to disclose material risks, which may include risks associated with climate change, among other environmental matters, in their periodic disclosure. The CSA has provided guidance with respect to these disclosure requirements in CSA Staff Notice 51-333 Environmental Reporting Guidance.
CSA Staff intend to review disclosure prepared by large TSX-listed reporting issuers on the material risks and financial impacts associated with climate change as well as related governance processes; gather feedback from reporting issuers about current disclosure practices through an anonymous online survey; and conduct focus groups with reporting issuers and investors. CSA Staff will also examine risk disclosure requirements related to climate change in other jurisdictions, as well as recently proposed voluntary disclosure frameworks.
The CSA expects to conduct its information gathering in spring and summer 2017 and publish a progress report outlining its findings upon completing its review.
A backgrounder with additional details regarding the climate change disclosure project can be found on CSA members’ websites.
The CSA, the council of the securities regulators of Canada’s provinces and territories, co-ordinates and harmonizes regulation for the Canadian capital markets.
Kristen Rose Ontario Securities Commission 416-593-2336
Nicole Tuncay Alberta Securities Commission 403-297-4008
Alison Walker British Columbia Securities Commission 604-899-6713
Jason (Jay) Booth Manitoba Securities Commission 204-945-1660
Shannon McMillan Financial and Consumer Affairs Authority of Saskatchewan 306-798-4160
Sylvain Théberge Autorité des marchés financiers 514-940-2176
Andrew Nicholson Financial and Consumer Services Commission, New Brunswick 506-658-3021
David Harrison Nova Scotia Securities Commission 902-424-8586
Janice Callbeck Office of the Superintendent of Securities, Prince Edward Island 902-368-6288
John O’Brien Office of the Superintendent of Securities, Newfoundland and Labrador 709-729-4909
Rhonda Horte Office of the Yukon Superintendent of Securities 867-667-5466
Tom Hall Office of the Superintendent of Securities, Northwest Territories 867-767-9305
Jeff Mason Nunavut Securities Office 867-975-6587
Many investors who are concerned about business risks and financial impacts associated with climate change are requesting improved disclosure by businesses in respect of such risks and impacts, and the actions being taken to address them. The demand for improved disclosure has resulted in the proposal of a number of voluntary frameworks for disclosure in respect of climate-related risks and impacts, along with other sustainability matters. In addition, a number of jurisdictions outside of Canada have adopted specific climate-related disclosure requirements for public companies.
With these considerations in mind, the CSA intends to review various matters in relation to the disclosure of risks and financial impacts associated with climate change. The review will be conducted with a view to ensuring that issuers provide high quality disclosure of material information, which in turn assists investors in making informed investment and voting decisions.
The project includes three key components:
1) Review of international disclosure requirements and voluntary frameworks
CSA Staff will review climate-related disclosure requirements in the securities laws of certain international jurisdictions, such as Australia, the United Kingdom and the United States, as well as recommendations contained in recently proposed voluntary disclosure frameworks with respect to climate-related disclosure, including:
2) Review of continuous disclosure by reporting issuers
CSA Staff will review public disclosure by Canadian reporting issuers in both their mandatory continuous disclosure filings and voluntary sustainability reports, to assess the extent to which these filings currently include disclosure concerning material climate-related risks and financial impacts, and the governance processes related to them. The review is expected to focus on disclosure prepared by large TSX-listed reporting issuers for the 2016 financial year.
CSA Staff will gather feedback from reporting issuers on climate-related disclosure and the associated costs. CSA Staff will also consult with investors to better understand the climate-related information they require to make an informed investment decision. These consultations will occur through an anonymous online survey of reporting issuers as well as focus groups with investors and reporting issuers.
In Canada, reporting issuers are required to disclose material risks in their periodic disclosure, including climate-related risks. In 2010, the CSA published CSA Staff Notice 51-333 Environmental Reporting Guidance, which provided guidance to reporting issuers (other than investment funds) on existing continuous disclosure requirements relating to environmental matters under securities legislation in Canada.
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