The Canadian Securities Administrators (CSA), Canada's security regulator, have announced that they are putting their work on the development of key reporting initiatives on hold. This includes pausing their work on implementing a new mandatory climate-related disclosure rule and amending diversity-related disclosure requirements.
For private market firms, asset managers, and impact investors, the pause in developing new climate-related disclosure rules may reduce immediate compliance burdens but it can increase uncertainty about assessing climate risks and opportunities in Canadian investments.
Let’s explore the halt on the development of climate disclosures in detail.
CSA holds the development for now
The CSA has held back the development of mandatory standards to support Canadian markets and issuers as they adapt to the new ESG developments happening around the U.S. and the world.
Addressing this pause, the Chair of CSA said, “In recent months, the global economic and geopolitical landscape has rapidly and significantly changed, resulting in increased uncertainty and rising competitiveness concerns for Canadian issuers,”
The CSA mentioned that while mandatory rules may be on hold, climate-related risks are a mainstream business issue for the country. In addition, Canadian securities laws already require disclosure of any material climate-related risks under existing regulations.
Diversity disclosures are still in affect
The new diversity-related amendments are on hold. However, the existing requirements under the National Instrument 58-101 remain in place. These requirements require non-venture issuers to continue to disclose the representation of women on their boards and executive positions.
The CSA added that it will continue to monitor domestic and international regulatory developments regarding climate-related and diversity-related disclosures. The regulatory body will revisit both projects in future years to finalize issuer requirements and provide issuers with appropriate notice before restarting rulemaking efforts.
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