This is part 8 of a series of educational posts from the IFoA’s Climate Change Disclosures Working Party about climate reporting topics. Here we focus on Canada: current practices and a brief overview of things to come.
Canada accounted for about 1.5% of global emissions in 2019. See: Global greenhouse gas emissions - Canadian Government (canada.ca)
From an environmental perspective, however, the Canadian government in 2022 approved a 12 billion Canadian dollar offshore oil project as well as continued support to the Trans Mountain pipeline.
Canada is committed to have net zero emissions by 2050 via legislation in 2021 and published its 2030 Emissions Reduction Plan in March 2022, to reduce emissions by 40% to 45% by 2030.
In 2021, the Canadian Securities Administrators (CSA), the umbrella securities regulator organisation in Canada, proposed new regulation (National Instrument 51-107 Disclosure of Climate-related Matters). This would require public companies to disclose climate-related information and risks from 2024. The initial draft disclosures are largely aligned with Task Force on Climate-related Financial Disclosures (TCFD) recommendations. This is still under consultation and CSA are receiving comments, with final regulations due later in 2023.
In 2022, large government organisations (who have more than one billion Canadian dollars in assets) shared climate-related disclosures. All other governmental corporations are expected to report, in line with TCFD requirements, by 2024. See: How Canadian companies can prepare for TCFD reporting requirements - S. Marsh, S. Morrison (pwc.com)
In the 2022 budget, the government in Canada introduced mandatory climate-related disclosures for banks, insurers, and pension funds.
The new ‘B-15’ guidelines issued by the financial regulator, Office of the Superintendent of Financial Institutions (OSFI), will require federally regulated financial institutions to publicly disclose climate-related information.
The requirements will be phased in dependent on the size of the company from 2024.
OSFI will also expect financial institutions to collect and assess information on climate risks and emissions from their clients. Hence, we expect a wider impact.
Non-compliance for example will result in fines.
The Canadian Sustainability Standards Board is working with the International Sustainability Standards Board (ISSB), to support the update of accounting standards in Canada and potentially align with ISSB. Given this, there may be climate-related disclosure within accounting requirements filtering through locally.
We expect finalisation of CSA requirements later this year.
Below is a list of websites we hope you find useful:
Government of Canada: climate change
Government of Canada: Sustainable Finance Action Council
Canadian Sustainability Standards Board
What are your thoughts on the points raised in this article?
We would love to hear your views in the comments on the IFoA's Sustainability Finance Community LinkedIn page.
To find out more, visit: Sustainability: research working parties
The views expressed in this post are those of the individual authors, and not necessarily those of the Institute and Faculty of Actuaries or those of their employers. Information within this post is correct as at the date of writing (i.e. end of July 2023). Hence, there may be subsequent updates which are not reflected. Any reader should still reference the underlying legislation and standard, and should there be any conflict, the underlying information in the relevant standard or legislation supersedes any information presented in this post.