The Canadian government plans to explore options for mandating climate disclosure in the private sector. The newly released fall economic statement announces that the Ministries of Finance; Innovation, Science and Economic Development; and Environment and Climate Change are taking on that task, following advice from the government’s Sustainable Finance Advisory Council (SFAC).
In a submission earlier this year, the SFAC endorsed climate disclosure for “near-complete coverage of the Canadian economy” in alignment with International Sustainability Standards Board (ISSB) criteria. This is expected to be broadly in step with recommendations the Office of Superintendent of Financial Institutions (OSFI) and Canadian Securities Administrators (CSA) have developed for federally regulated financial institutions and publicly listed companies.
“Climate-related disclosures should be viewed the same way as Canadian businesses being required to disclose nutritional information on food and beverage products, or to disclose safety information on home electronics. Those requirements, which at one time did not exist are now seen as a standard business practice,” the SFAC stated.
The SFAC also recommended a “phased-in and proportional” process with the most carbon-intensive sectors and largest businesses targeted for the first rounds of compliance. Meanwhile, the government is urged to particularly focus on “improving the availability, reliability and comparability of climate data” to ensure that businesses have free access to physical risk data and better access to emissions data related to their energy consumption.
From the perspective of prominent players in Canada’s commercial real estate sector, Darryl Neate, vice president, ESG, with REALPAC says the association looks forward to the government’s promised consultation with stakeholders, including the financial sector, industry, provincial/territorial regulators and independent experts.
“REALPAC is supportive of broad based action across our member companies to combat climate change, including reporting on climate risks and KPIs,” he maintains. “REALPAC is committed to working with the Departments of Finance, Environment and Climate Change Canada and NRCAN on the design and implementation of a green and transition finance taxonomy for Canada.”
