Canadian Sustainability Standards Council (CSSB) has just announced the set Canadian Sustainability Reporting Standards (CSDSs), largely compatible with global standards set by the International Sustainability Standards Council (ISSB) issued by the IFRS Foundation. However, the CSSB provides more time for businesses to prepare for some important elements of reporting, such as greenhouse gas (GHG) emissions across the value chain, than the ISSB standards.
The release of this new standard marks a major step forward in the multi-year process of building a new sustainability reporting system in Canada, which will begin in 2021 at the direction of the Prime Minister. Justin Trudeau on establishing a reporting system based on TCFD (Task Force on Climate-related Financial Disclosures)Most recently, in October, the Canadian government announced plans to require Major companies make climate change reporting mandatory, while encouraging small businesses to voluntarily provide relevant information.
The CSSB, established in 2022 to coordinate with the ISSB and support the adoption of ISSB standards in Canada, has just released two new standards:
- CSDS 1: General requirements for reporting financial information related to sustainability.
- CSDS 2:Climate related disclosure.
These standards correspond to IFRS S1 (regarding sustainability) and IFRS S2 (climate-related) of the ISSB, with modifications to suit the Canadian context.
The initial draft standards, published in March 3, included several adjustments from the ISSB standards, most notably a one-year delay in the effective date and an extension from one year to two years for reporting on non-climate sustainability issues and value chain emissions (Scope 2024). In the final version, the CSSB continued to add incentives, such as extending the time before Scope 1 and non-climate reporting requirements to three years, and two years to align sustainability and financial reporting. In addition, companies will have three years to begin quantitative climate-related scenario analysis to assess their resilience to climate change.
Bruce Marchand, Interim President of CSSB, said:
“Today’s announcement demonstrates our commitment to promoting sustainability reporting that aligns with international standards – while also reflecting the Canadian context. These standards lay the foundation for consistent, high-quality sustainability reporting, which is essential for informed decision-making and public trust.”