Canadian ESG Regulations

Overview

Canada has been active in developing ESG regulations, with climate disclosure requirements for both companies and financial institutions. The Canadian approach often mirrors EU regulations while adapting to the North American context.

Federal Climate Disclosure

Canadian Sustainability Standards Board (CSSB)

• Developing Canadian sustainability standards
• Aligned with ISSB standards
• Adoption expected 2024-2025

ISSB Adoption

• Canada among early adopters
• ISSB standards as baseline
• Canadian-specific requirements possible

Existing Requirements

National Instrument 51-102

• MD&A disclosure of material risks
• Risk factors in annual filings
• Similar to US SEC rules

National Instrument 81-102

• ESG fund disclosure requirements
• Naming and marketing rules
• Avoid misleading "green" names

Climate-Related Disclosure

Enhanced Requirements (Proposed)

• GHG emissions (Scope 1, 2, 3)
• Climate risks and opportunities
• Governance and strategy
• Metrics and targets

Scope

• Public companies
• Listed issuers
• Large private companies

Financial Sector Requirements

Office of the Superintendent of Financial Institutions (OSFI)

• Climate risk management expectations
• Disclosure requirements
• Supervisory expectations

Bank Act Amendments

• Climate risk considerations
• Due diligence requirements
• Consumer protection

Provincial Developments

British Columbia

• Climate change accountability
• Public sector reporting

Quebec

• Carbon market
• Energy efficiency standards

Ontario

• Cap and trade (previously)
• Climate disclosure (proposed)

Carbon Pricing

Federal Carbon Levy

• $65/tonne (2024)
• Rising to $170/tonne (2030)
• Applies where no provincial system

Provincial Systems

• British Columbia carbon tax
• Quebec cap-and-trade
• Alberta carbon levy

Practical Guidance

For Companies

1. Monitor CSSB standards: Canadian ISSB adoption
2. Prepare data: GHG emissions inventory
3. Assess governance: Board oversight
4. Engage advisors: Legal and audit

Timeline

• 2024-2025: CSSB standards adoption
• 2025-2026: Initial disclosures
• 2027+: Full implementation

Key Takeaways

• Canada adopting ISSB standards
• Federal and provincial requirements
• Financial sector increasingly regulated
• Carbon pricing in place nationally
• Climate disclosure expanding
• International alignment priority