TORONTO – Regulators around the world are forcing companies to disclose their carbon emissions, along with their other key climate change considerations such as how much financial risk they face.
Momentum is building as the rising dangers from wildfires, droughts and floods become harder to ignore, and as the alphabet soup of disclosure regimes get boiled down to clear international standards on the key questions companies most need to answer.
But while both the need and the path forward are getting increasingly clear, experts say Canada is falling behind.
At this year’s UN climate discussion in Dubai, Mark Carney, the former Bank of Canada governor and a vital player in global climate finance, was speaking enthusiastically about the broadcasting framework established — in record time — by the International Sustainability Standards Board.
Now countries are opening to implement. It’s been permitted by the securities regulator IOSCO, the European Union, the U.K., Singapore, Switzerland, Canada, he informed, before pausing.
Well, Canada’s lagging a bit. But most of the others are initiating implementation.
Whether a slip or a dig, his observations echo what others have been saying about Canada’s step of rolling out rules that will make it much informal to see who the laggards are on action, and where investments are most at jeopardy.
We’re weakening, said Janis Sarra, a primary co-investigator of the Canada Climate Law Enterprise, who distinguished that even developing economies like Brazil have already accepted the new standards.
Clear Canadian disclosure guidelines are required, said Sarra, to make certain the country is achieving its decarbonizing pledges, to appeal foreign investment, to make sure businesses aren’t greenwashing and to guarantee the general constancy of the financial system.
Corporations ranging from banks to grocers have already started to report some climate procedures. But with it all voluntary, they’re utilizing different standards, or altering their procedure to look better, all of which makes it difficult to compare companies to each other, or even to their own prior reporting, she said.
And of course, many corporations select not to divulge anything at all.
There’s no controlling stick, if I can call it that, that makes certain that there’s truthfulness, said Sarra.
Voluntary was fine 10 years ago, but this is crucial now.
The Canadian Securities Commissioners did announce a set of projected rules in 2021 that would make public corporations report emissions and other key metrics in yearly filings. The guidelines seem stuck in limbo.
In early July this year, the CSA greeted the new global values, saying an apprise on their own path would shadow in the “coming months.”
Approximately six months later, there have not been any updates. The information from CSA spokeswoman Ilana Kelemen was still that an update was approaching, and Kelemen said she was not able to set up a meeting so someone could clarify the delay.
One possible motive is the ongoing work to adjust the international standards for Canada, which the accounting industry-funded Canadian Sustainability Standards Board is undertaking.
The board awaits draft rules out by March, and to have them set by the third quarter next year, said Charles-Antoine St-Jean, board chair.
He said Canada is not so far overdue, and is still moving fast to implement the vital rules.
The big push is actually to reduce the noise … to see some correction, quality and integrity in the reporting arrangement.
Perhaps the main snag, though, is that the U.S. securities regulator has also had a lengthy delay in rolling out instructions.
Corporate groups in that country have outspokenly pushed back against the agency’s suggestions as onerous, particularly the possible need to report not only a company’s direct carbon releases, but also those carbon connected to their products and services.
In making the suggestion, Securities and Exchange Commission chairman Gary Gensler informed the emission disclosures rest on the substance of modern securities law.
Our core bargain from the 1930s is that stockholders get to choose which risks to take, as long as public companies deliver full and fair disclosure, and are honesty in those disclosures.
Canada’s securities controllers like to align standards with the U.S., so Canadian controllers are behind in part by waiting for an SEC conclusion. Even so, other jurisdictions are moving ahead.
Some rules are also moving forward in Canada, including by the banking controllers that delivered final guidance on climate disclosures in March.
The federal government also assured in its fall economic declaration that it would work to progress ways to make climate disclosures compulsory for private companies.
Companies are opening to voluntarily set out climate strategies, but those too are falling short.
