ENVIRONMENTAL DEFENCE, ECOJUSTICE, SHIFT: ACTION FOR PENSION WEALTH & PLANET HEALTH
Toronto, ON | Traditional territories of the Wendat, Anishnaabeg, Haudenosaunee, Chippewa and Mississaugas of the Credit First Nation – The Canadian Securities Administrators (CSA), the umbrella group representing Canada’s 13 provincial and territorial securities regulators, announced a ‘pause’ today on its work in developing new mandatory climate-related disclosure rules.
This is a shocking abdication of responsibility from Canada’s financial regulators.
Mandatory climate-related disclosure rules are essential for financial regulators to meet their mandates to ensure the stability of the financial system and reduce systemic risk. They are also critical for investors and companies to prepare for climate disruption. Governments, financial experts and regulators (including the Bank of Canada and the Office of the Superintendent of Financial Institutions) have long warned about the existential nature of climate risks for companies and Canada’s financial system.
Basic climate risk disclosure rules are becoming widespread globally. Canadian standards were finalized last year, aligning with the International Sustainability Standards Board (ISSB), for which Canada is a key participant. Canada was selected to host one of two ISSB American regional offices in Montreal.
Rather than ‘supporting Canadian markets and issuers’, today’s pause exposes them to significant uncertainty and risk, while limiting the flow of international capital into Canada’s economy.
Quotes:
Adam Scott, Executive Director of Shift: Action for Pension Wealth & Planet Health said:
“The CSA and its members have dragged their feet in establishing even basic climate disclosure rules for years. Now, along with Canadian fossil fuel CEOs, they’ve cynically used political instability and threats of tariffs as an excuse to back out of climate obligations. This bad-faith move undermines their credibility in protecting investors, ensuring fair, efficient and transparent markets, and reducing systemic risks. Delaying these rules will hurt Canadians and damage Canada’s financial markets.”
Julie Segal, Senior Manager of Climate Finance at Environmental Defence Canada said:
“As the U.S. picks a fight with Canada, other global trading partners with strong climate finance rules are becoming more important to our economy. Over 1,300 Canadian companies are covered by European sustainability reporting rules. The CSA is being regressive. Postponing requirements for businesses to get prepared for climate change and align with positive climate action will only leave businesses less prepared, investors less informed, and Canada’s economy less competitive. Protecting Canada means requiring full climate risk disclosures and credible transition plans.”
Karine Peloffy, Lawyer and Sustainable Finance Lead at Ecojustice said:
“There is no comfort to be taken by the fact that climate related risks already need to be disclosed if they are material under existing law. Even back in 1972, the Journal of Accountancy was lamenting that “[t]he abuse of the concept of [materiality] is pervasive as it all too often cloaks nondisclosure of material financial transactions…there are literally hundreds of public corporate audits taking place each year that contain important accounting transactions that aren’t revealed, due to the ‘Alice in Wonderland’ judgment of materiality exercised by a large portion of the accounting fraternity.’ More recently, Ms. Herren Lee, the former Chair of the Securities and Exchange Commission who first proposed climate specific disclosure rules in the U.S., stated ‘lawyers, auditors, and managers can and do get the determination of materiality wrong.’ A recent survey of approximately 2,000 Chartered Financial Analysts from around the world found that two-thirds believed that climate change-related risks are not sufficiently reflected in current financial market prices. New rules are needed.” All sources quoted are referenced here.
About:
Shift: Action for Pension Wealth and Planet Health (a project of Makeway) is a charitable initiative that works to protect pensions and the climate by bringing together beneficiaries and their pension funds to engage on the climate crisis.
Environmental Defence is a leading Canadian advocacy organization that works with government, industry and individuals to defend clean water, a safe climate and healthy communities.
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.
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For interview requests:
Adam Scott, Executive Director, Shift: Action for Pension Wealth & Planet Health, adamscott@shiftaction.ca
Alex Ross, Environmental Defence Canada, media@environmentaldefence.ca
