February 6, 2024

The Canada Climate Law Initiative calls on the Canadian Securities Administrators to finalize National Instrument 51-107 Disclosure of Climate-related Matters

Vancouver, 6 February 2024 – There is an urgent need for the nation’s securities regulators to act. Without clear guidance from the Canadian Securities Administrators (CSA) on disclosure of climate-related issues, the risk of litigation against Canadian publicly-traded corporations increases, meanwhile Canada lags behind other countries enacting similar policies.

The Canada Climate Law Initiative (CCLI) is calling on the CSA to finalize NI 51-107 and bring it into force as swiftly as possible, given the urgent financial risks that climate change poses.

The purposes of Canadian securities laws are to provide protection to investors from unfair, improper or fraudulent practices; to foster fair, efficient, and competitive capital markets and confidence in capital markets; to foster capital formation; and to contribute to the stability of the financial system and the reduction of systemic risk. These objectives are best met by aligning climate-related disclosure requirements with developments globally.

The CCLI, after extensive consultation across Canada with climate governance experts, makes seven key recommendations to align NI 51-107 with the International Financial Reporting Standards (IFRS) Foundation International Sustainability Standards Board (ISSB) IFRS S2 Climate-related Disclosures, the most universally-accepted provisions for climate-related financial disclosure globally.

“We offer a roadmap to align Canadian securities law disclosure with international standards, providing investors with information on issuers’ climate-related financial risks and opportunities and their plan to manage the transition to net-zero emissions,” states Dr. Janis Sarra, Professor of Law Emerita, UBC and Principal Co-Investigator, CCLI.

The CCLI makes clear in its recommendations that the securities administrators should expedite the release of a revised NI 51-107 by working in tandem with the Canadian Sustainability Standards Board (CSSB), which has announced it will release its proposed Canadian Sustainability Disclosure Standards (CSDS) next month, adopting IFRS S2 entirely with some accommodation, especially for venture issuers.

“Investors need clear climate disclosure standards so that they can make effective investment and engagement decisions, and the CCLI’s submission offers detailed insights into how the CSA can move forward to ensure Canada keeps pace with global developments,” notes Catherine McCall, CEO of the Canadian Coalition for Good Governance, representing investors with $5.5 trillion in assets under management.

The CCLI emphasizes the importance of not further delaying disclosure standards for Canadian issuers, given the need to protect Canadian capital markets in the transition to a net-zero economy.

Download the submission here: https://ccli.ubc.ca/resource/submission-to-the-canadian-securities-administrators-csa-on-proposed-national-instrument-51-107-disclosure-of-climate-related-matters-ni-51-107/

About the Canada Climate Law Initiative
The Canada Climate Law Initiative (CCLI) provides businesses and regulators with climate governance guidance so they can make informed decisions in the transition toward a net-zero economy. Powered by the nation’s top expertise, we engage with boards of directors and trustees to ensure businesses understand their legal duties with respect to climate change. Our legal research allows us to stay one step ahead in a rapidly transforming policy landscape.

CCLI is supported financially by family foundations, and is led by its Principal Co-Investigators who include professors at the University of British Columbia Peter A. Allard School of Law and Osgoode Hall Law School, York University.

Media contact: ccli-info@allard.ubc.ca