Recently, the Canadian Securities Administrators (the umbrella organization of Canada's provincial securities regulators) announced that it would pause the development of certain sustainability reporting initiatives, including a proposed mandatory climate-related disclosure rule.
This development is emblematic of an overall retreat from mandatory climate disclosures and similar rules that has occurred over the past several months, stemming in large part from recent political developments in the United States, which have discouraged a climate focus in the financial context. As further evidence of this trend, the EU has begun to retreat from its sustainability reporting through the “Omnibus” process, which is delaying and reducing the scope of CSRD disclosures, and, in perhaps the paradigmatic example, the SEC has abandoned entirely the mandatory climate disclosure rule that it had promulgated under the Biden Administration.
Nonetheless, this trend should not be overstated. Certain key regulators from economically-important jurisdictions--including the State of California--are proceeding vigorously in promulgating mandatory climate disclosure rules and similar regulations. And the “pause” recently announced by the Canadian regulators is not an abandonment of this area of regulation, as this process could easily restart when circumstances change.
Canada’s securities regulators announced that they are pausing their work on the development on key sustainability reporting initiatives, including a new mandatory climate-related disclosure rule and amendments to diversity-related disclosure requirements. According to the Canadian Securities Administrators (CSA), the umbrella organization of Canada’s provincial and territorial securities regulators, the move to pause the development of new sustainability reporting requirements is being made “to support Canadian markets and issuers as they adapt to the recent developments in the U.S. and globally.” The announcement follows a series significant changes in the sustainability reporting landscape in major markets, with the EU in the midst of its “Omnibus” process to delay, reduce the scope and simplify disclosure requirements under its CSRD legislation, and the U.S. Securities Exchange Commission in the process of entirely abandoning its climate-related reporting rules.
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