As regulators abandon ‘bare minimum’ corporate climate reporting, a backstop lurks

A flare stack lights the sky along refinery row in Edmonton Alta, on Friday December 28, 2018. THE CANADIAN PRESS/Jason Franson

TORONTO — In the future, seeing the carbon emissions of a company may not be much harder than finding out how many calories are in a chocolate bar, but that day looks further out than it did just a few months ago.

Last year saw big steps toward better corporate climate transparency: a U.S. regulator required it, the Trudeau government committed to follow through on more, and a Canadian task force released guidelines on what those disclosures should look like.

But the election of U.S. President Donald Trump has changed all that.

Since Trump’s return to the White House, the U.S. Securities and Exchange Commission effectively dropped its requirement on disclosures in late March, which led the Canadian Securities Administrators (CSA) to ditch its own plans a few weeks later.

The moves come despite the rising impacts of climate change, making it all the more important that companies are mandated to release emissions data, as well as to say what risks they face from the crisis and how they plan to deal with them, said Pamela Steer, head of CPA Canada.

“The world is burning up in many cases,” she said. “It’s become more acute, more urgent than ever.”

The CSA’s decision not to require disclosures is “incredibly disappointing,” she said, especially as dozens of other countries including Australia, the European Union, and even fellow United States-neighbour Mexico move forward with the requirement.

Growing expectations for the information will make it harder for companies to raise money internationally without the rules, especially as Canada looks to diversify away from the U.S., said Steer.

As it stands, companies have been reporting a hodgepodge of data and analysis, and some not at all, making it hard for investors to make informed decisions, she said.

“There are many risks and opportunities that need to be disclosed, and investors are demanding the information, and I think companies are demanding a level playing field.”

Many companies are, however, also being less public about climate generally given the Trump administration’s hostility to efforts, such as Canada’s big banks all leaving the Net-Zero Banking Alliance. Rising economic concerns have also put pressure on companies to cut back where they can.

Recent anti-greenwashing rules from the Competition Bureau have added to the pressure, making it all the more important to have clear standards in place, said Steer.

The rules, which require companies to be able to back up environmental claims or face potentially severe penalties, has led many to say even less about climate change. Steer said it is important to hold companies to account on what they say, but that companies need a bit of grace as whole new reporting standards are established.

“Having safe harbour, having a more pragmatic commentary and guidelines is actually what is needed.”

The Canadian Sustainability Standards Board was created specifically to adapt international standards to the Canadian context, and it put out guidance in December that included several years of added time for companies to report on some measures.

Ten of Canada’s biggest public pension funds, representing more than $2.2 trillion in assets under management, voiced their support for the proposed guidance.

“Alignment with a global baseline is important for the competitiveness of Canadian companies in global capital markets,” the public pension group said, though Alberta’s pension fund was notably absent despite endorsing the premise less than two years earlier.

Provincial securities regulators were expected to take those guidelines and make them mandatory, but instead, the CSA announced on April 23 that it had indefinitely paused the work.

CSA chair Stan Magidson, who is also CEO of the Alberta Securities Commission, said in a release that the regulator was focusing on making Canadian markets more competitive, efficient, and resilient.

Work on climate disclosure would be revisited in “future years,” the CSA said.

But as the pension funds noted, disclosure efforts are part of staying competitive, said Wendy Berman, chair of the CSSB.

“There is going to be a lot of capital movement over the next 10 years as we transition to a low-carbon economy, and we certainly don’t want Canada to miss that opportunity,” she said.

“What we’re starting to see is a huge global shift,” said Berman. “Would it be better if the U.S. was lockstep with the rest of the world? Of course. But that should not hold back Canadian companies.”

Both Canada and the U.S. have moved backwards on disclosure, even though the rules were the “bare minimum” to help investors, said Gary Gensler, then chair of the U.S. SEC when he passed them last year.

In ending the requirements, current acting chair Mark Uyeda called them “costly and unnecessarily intrusive climate change disclosure rules.”

With both the U.S. and Canadian regulators abandoning efforts, it’s unclear how well Prime Minister Mark Carney can make good on his campaign promise to establish “broad climate risk disclosure for companies across Canada,” or to follow through on Trudeau’s promise to mandate disclosures for large, federally incorporated private companies.

The Finance Department said that with Cabinet only sworn in last week, the government will have more to say in due course.

But even as high-profile debates rage on about broader disclosures, rules established in 2023 by Canada’s banking regulator help provide a backstop.

The rules that kicked in this year from the Office of the Superintendent of Financial Institutions broadly align with what the Canadian Sustainability Standards Board had called for -- requiring banks to report how their finances might be affected by climate change, as well as their own emissions contributions.

Given their scale, and involvement in so many other companies, the reporting requirements should help put pressure and clear the way for others to follow, said Berman.

“When OSFI endorses it, and the banks must now comply with it going forward, that starts to create momentum,” she said.

That momentum could help make climate disclosures an established part of assessing the health of a company, just as food labelling rules a few decades ago have since made it hard to imagine a chocolate bar not listing the calories, fat and other key details to know to stay healthy.

This report by The Canadian Press was first published May 20, 2025.

Ian Bickis, The Canadian Press