March 18, 2024

A Just Transition: A Guide for NGO and Civil Society Members to Provincial Regulation of Directors’ Duties Concerning Climate-related Risks

Non-governmental organizations (NGO) and members of civil society continue to press for effective legislation to meaningfully address the causes and impacts of climate change, including environmental protections, mitigation and adaptation measures, climate accountability, and net-zero carbon emissions strategies. More recently, they have recognized that the transition to net-zero emissions requires a whole-economy approach, which means that companies, financial institutions, and pension funds must make a meaningful contribution to the transition if we are to avoid the catastrophic consequences of climate change. However, the myriad statutes and regulators that govern the behaviour of corporations, pension funds, banks, insurers, and other financial institutions can be confusing. Yet it is critically important that the voices of civil society members are heard in the active policy discussions that are currently occurring. The Canada Climate Law Initiative (CCLI) has produced this guide with the aim of aiding stakeholders in exploring policy changes in corporate and financial services law that will support the transition to a net-zero carbon emissions economy.

The guide commences with a brief description of key governance elements under corporate law, securities law, financial services law, and pension law that create fiduciary duties for directors and other fiduciaries. This introduction includes reference to some of CCLI’s policy work on a just transition to a net- zero and circular economy that NGO and other stakeholders may consider as they formulate their own policy positions.

The guide then provides a summary of the key provincial statutory provisions governing the conduct of these entities in Ontario, Québec, British Columbia, and Alberta. It provides this information in the form of questions that CCLI frequently receives from NGO, with explicit answers. It also lists the key statutes and regulatory authorities in the other six provinces, current to March 2024. The guide is not intended to be legal advice of any kind. Rather, its goal is to offer some insights and tools to allow civil society members to formulate their own views of policies that are needed to transition Canada economically, with a focus on the corporate and financial services sectors.