The state of play for Canada’s climate-related financial disclosures framework

“Any efficient market reaction to climate change risks as well as the technologies and policies to address them must be founded on transparency of information,” declared then-Bank of England Governor Mark Carney in his landmark “Tragedy of the Horizon” speech at Lloyd’s of London on September 29, 2015.

As the founder of the global Taskforce on Climate-Related Financial Disclosures (TCFD), the former UN Special Envoy on Climate Action and Finance, and former Co-Chair for the Glasgow Financial Alliance for Net Zero (GFANZ), Mark Carney has spent the past decade as the leading proponent of mandatory adoption of climate-related disclosure across financial sectors worldwide.

Canada has been slower in mandating these disclosures compared to other OECD countries, in part owing to our decentralised system of securities regulation. In December 2024, the Canadian Sustainability Standards Board (CSSB) launched the Canadian Sustainability Disclosure Standards (CSDS 1 and CSDS 2), voluntary standards based on the global model developed by the International Sustainability Standards Board (ISSB), with the intention that they would eventually be made mandatory through the joint implementation of a Canadian Securities Administrators (CSA) rule by the provincial regulatory authorities. Once in force, these rules would apply to all reporting issuers of securities in Canada.

However, on April 23, 2025, the CSA announced that it was indefinitely pausing further work on this rule and would instead encourage corporate Canada to refer to the CSSB standards as “a useful voluntary disclosure framework for sustainability and climate-related disclosure”. While not explicitly stated, the CSA’s decision is understood to be in response to the US Securities and Exchange Commission’s abrupt withdrawal of the defence of its own climate disclosure rule from several court challenges a few weeks earlier.

But while any mandatory climate disclosure requirements that would have applied across Canada’s capital markets remain on hold, the federal government is continuing to pursue new disclosure requirements under its own, narrower jurisdiction: In October 2024, then-Finance Minister Chrystia Freeland announced forthcoming amendments to the Canada Business Corporations Act (CBCA) “mandating climate-related financial disclosures for large, federally incorporated private companies”.

While significantly narrower in scope, this disclosure requirement would nonetheless capture some of the largest and most high-profile businesses in Canada, in sectors including marine transportation, pulp and paper, real estate, and agri-food.

It is also notable that the 2025 Liberal Party platform included, alongside other sustainable finance-oriented policies, a specific commitment to “Establish broad coverage of climate risk disclosure for companies across Canada, [. . .] working with provincial, territorial, and international partners to enhance transparency for investors, better assess climate risks and opportunities, enable the development of transition plans, and help align capital towards a sustainable economy.”

Over the coming months PAA will be watching closely for any sign that the federal government is moving towards new requirements under the CBCA, as well as climate disclosure policy more broadly. There may be announcements in the lead-up to the 2025 UN Climate Change Conference (COP30) taking place in Belém, Brazil in November, where climate finance is expected to be a major thematic focus.

Despite delays and hesitation from Canadian regulatory authorities, and the prospect of increasing divergence from their U.S. counterparts, it remains possible that corporate Canada will see further movement toward mandatory climate-related financial disclosures going forward.