CEO of the Ontario Securities Commission Grant Vingoe, pictured, said the regulatory body has not determined what would trigger a resumption of efforts to formalize standards.Christopher Katsarov/The Globe and Mail
Canada’s securities commissions are not ready to restart work on making climate-related disclosures mandatory for public companies, saying the heightened geopolitical and market risks that prompted the halt remain.
Many of the country’s large companies have exposure to the United States, where the federal and many state governments have become hostile to the use of environmental, social and governance factors in business.
Meanwhile, disruption in trade flows driven by U.S. President Donald Trump’s tariff war has created new problems for businesses across the country. The situation makes imposing new reporting requirements too burdensome, regulators said Tuesday at a Toronto seminar hosted by the UN Principles for Responsible Investment to discuss the state of sustainability disclosure in Canada.
Canadian Securities Administrators, the umbrella group for the country’s securities commissions, announced in April that it was shelving long-awaited rules to mandate such disclosures, saying doing so would jeopardize competitiveness amid the cross-border friction.
Supporters of required standardized disclosures decried the pause as a setback in the push to put Canadian business in line with most of its other trading partners in the competition for capital.
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Grant Vingoe, chief executive officer of the Ontario Securities Commission, said the regulatory body has not determined precisely what would trigger it to resume efforts to formalize standards that are being adopted in large measures globally. But it is watching some factors.
For one, regulators are gauging the level of voluntary adoption of standards published last year by the Canadian Sustainability Standards Board (CSSB), Mr. Vingoe told reporters after the discussion in Toronto. That seminar also included top officials with the Office of the Superintendent of Financial Institutions, Autorité des marchés financiers and the CSSB.
“The additional factor is integration with the markets, in the U.S. in particular, where companies are raising so much capital that we have to ensure that, at the time that we implement a mandatory standard, it’s not putting companies in Canada at a substantial disadvantage,” he said.
Regulators also want to test the assertion that mandating climate-centred reporting will help companies get access to additional pools of capital outside North America, where such reporting is increasingly required, Mr. Vingoe said.
Almost 40 countries representing 60 per cent of global gross domestic product have adopted or are preparing to adopt the international standards upon which the Canadian ones are based, said Wendy Berman, the CSSB’s chair.
Nearly a year ago, the CSSB issued its first set of standards, sticking closely to those international guidelines but giving companies extra time to adopt some provisions for emissions reporting, scenario analysis and timing of disclosures.
When Ms. Berman was appointed to her position earlier this year, she expected “headwinds” as Corporate Canada acquainted itself with the disclosure standards, but not to the extent that has occurred since, she said.
Canada’s financial markets remain intertwined with the U.S., but seeking capital in jurisdictions elsewhere in the world fits with the federal government’s push to diversify industry and trade, she said.
“I think the securities regulators and every financial regulator and standard setter has to watch what’s happening globally to ensure that Canadian companies remain competitive,” Ms. Berman said.
“The other factor that has to be considered is, as time goes on, the runway gets shorter and shorter with respect to the immediate impacts of climate change and the transition. The financial, operational and strategic impact of sustainability issues are becoming increasingly material to Canadian companies.”