OTTAWA/TRADITIONAL, UNCEDED TERRITORY OF THE ALGONQUIN ANISHNAABEG PEOPLE — Environmental law charity Ecojustice is expressing significant disappointment and concern over Canada’s first-ever sustainability disclosure standards, released earlier today.
The Canadian Sustainability Standards Board (CSSB) was tasked with providing a clear framework for how to report key sustainability and climate metrics, including around carbon emissions. These standards are critical in providing guidance for transparent, consistent sustainability reporting, building investor confidence, and combating rampant greenwashing in the Canadian economy.
While these new regulations are welcomed as a step towards aligning Canada with international climate-related reporting frameworks, experts argue that they delay the adoption of necessary global standards and overlook pressing issues specific to Canada’s unique climate and environmental context.
Ecojustice’s Sustainable Finance Project Lead, Karine Peloffy shared:
“While introducing a rigorous standard to bring Canada up to par with the ISSB’s work would be a step in the right direction, the CSSB ultimately delays the adoption of the international standards, and fails to respond to crucial problems that are endemic to our specific context here in Canada.
First, the CSSB has failed to enshrine respect for the rights of Indigenous Peoples as a mandatory disclosure requirement. This omission is particularly troubling in a country that already cemented its commitment to incorporating the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) principles in our national laws.
Secondly, the CSSB has left a critical flaw in the global standard uncorrected: the optional disclosure of underreporting. The fossil fuel sector, Canada’s largest emitter of GHGs, is still allowed to opt out of disclosing the possibility or probability that its emissions are underreported – a matter of plain fact in Canada, where scientific report after scientific report indicate rampant underreporting. This is of grave importance: if we can’t even trust something as basic as the accuracy of current emissions data, how can we have any confidence that this new accounting infrastructure (that fails to mandate disclosure of information reliability) will be more credible (if at all)?”
Ecojustice urges the CSSB to update its accounting rules to include the following:
- Abandon the financial / single materiality standard when it comes to climate-related risks and uncertainties; it is simply unfit for purpose.
- Require the disclosure of GHG emissions along with their uncertainties within financial statements, starting with entities within the fossil fuel supply chain.
- Look to the Climate-Aligned Finance Act, a bill before the Canadian Senate, to help determine which issues should be de-facto considered material information for mandatory disclosure.
- Consult climate science experts when devising the change of rules.
For additional background, please see Ecojustice’s Submission to IFRS Climate-related and Other Uncertainties in the Financial Statements (with relevant content beginning on p.4)
About
Ecojustice uses the power of the law to defend nature, combat climate change and fight for a healthy environment. Its strategic, public interest lawsuits and advocacy lead to precedent-setting court decisions, law and policy that deliver lasting solutions to Canada’s most urgent environmental problems. As Canada’s largest environmental law charity, Ecojustice operates offices in Vancouver, Calgary, Toronto, Ottawa and Halifax.
