Securities regulators clarify climate change-related disclosures

Notice reinforces previous guidelines, in response to investors’ interest in climate change risks

Securities regulators clarify climate change-related disclosures
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The Canadian Securities Administrators (CSA) has published CSA Staff Notice 51-358 Reporting of Climate Change-related Risks, which aims to assist companies in identifying and improving their disclosure of material risks posed by climate change.

The notice clarifies existing legal requirements and does not create any new ones, according to a statement by the CSA. It reinforces and expands upon the guidance provided in CSA Staff Notice 51-333 Environmental Reporting Guidance and should be read in conjunction with that notice.

CSA added that Staff Notice 51-333 remains as a reference to issuers on existing continuous disclosure requirements relating to a broad range of environmental matters, including climate change.

The guidance in the notice is a result of the CSA’s research, review and consultations on issuers’ disclosure of risks and financial impacts associated with climate change, also known as the Disclosure Project. As reported in CSA Staff Notice 51-354 Climate change-related Disclosure Project, the Disclosure Project found that many investors, particularly institutional investors, have become increasingly focused on climate change-related risks and have expressed concern that they are receiving insufficient disclosure of these risks from issuers.

“We encourage directors and senior management of issuers to consider our guidance with respect to climate change-related risks,” said Louis Morisset, CSA chairman and president and CEO of the Autorité des marchés financiers. “Many investors are seeking improved disclosure on the material risks, opportunities, financial impacts and governance processes related to climate change. The guidance provided by both of these notices will enable issuers to improve their disclosure of material climate change-related risks affecting their business.”

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