Overview
Due to the rapid change in the global economic market, the CSA has announced that they will be shifting their focus towards initiatives that make the Canadian markets and issuers more competitive, efficient and resilient as they face market uncertainty and competitiveness concerns. As a result, existing work on new mandatory climate-related disclosures and proposed amendments to the diversity-related disclosure requirements will be temporarily put on hold.
Background
Climate-related disclosures
On October 18, 2021, the CSA announced the development of National Instrument – Disclosure of Climate-Related Matters, which was set to introduce new mandatory disclosure requirements for climate-related matters that would provide consistent and comparable decision-making information for market participants, particularly institutional investors and other stakeholders. This proposed instrument would have been applicable to all reporting issuers and would have required them to disclose particular climate-related information that would align with the recommendations of the Task Force on Climate-related Financial Disclosure. However, the proposed instrument was never finalized and with the most recent update provided by the CSA, its development has now been formally paused.
Despite the current hold, the CSA notes that existing securities legislation remains in effect that requires certain disclosures related to material climate risks. Additionally, the CSA encourages issuers to refer to the finalized Canadian Sustainability Standards Board (“CSSB”) standards when preparing disclosure documents. The CSSB standards were issued in December of 2024 and provide for voluntary sustainability and climate-related disclosure frameworks that align with the standards issued by the International Sustainability Standards Board.
Diversity-related disclosure
On April 13, 2023, the CSA issued a notice and request for comments on proposed amendments to Form 58-101F1 – Corporate Governance Disclosure of National Instrument 58-101 – Disclosure of Corporate Governance Practices (“NI 58-101”) and changes to National Policy 58-201 – Corporate Governance Guidelines, related to board nominations, board renewal and diversity. The proposed changes would have required disclosure on aspects of diversity that go beyond the representation of women, with the objective of increasing transparency regarding diversity, providing investors with decision-useful information, and providing guidance on corporate governance practices as they relate to board nominations, board renewal and diversity.
Although these amendments have now been put on hold, the CSA notes that pre-existing requirements under NI 58-101 remain, and non-venture issuers will have to continue to adhere to previous disclosure requirements regarding representation of women on boards and in executive officer positions.
Future plans
While both projects have been put on hold, the CSA will continue to monitor domestic and international developments in both areas with plans to finalize both projects in future years. In the meantime, the CSA will continue to monitor existing disclosure requirements and will continue to address misleading disclosures, including greenwashing, as market trends continue to evolve.
This article was prepared with the assistance of summer articling student Rojan Askar-pour.
Note: This article is of a general nature only and is not exhaustive of all possible legal rights or remedies. In addition, laws may change over time and should be interpreted only in the context of particular circumstances such that these materials are not intended to be relied upon or taken as legal advice or opinion. Readers should consult a legal professional for specific advice in any particular situation.
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