their objectives without the need for a public threat of a contest. Some boards and management teams are even finding it fruitful to bring activists into the tent (with appropriate confidentiality agreements in place) so that shareholders can play a consultative role regarding the board as it develops its strategy, evaluates its governance structure or negotiates a transaction. CLIMATE CHANGE CONSIDERATIONS The Canadian Securities Administrators (CSA) released National Instrument 51-107 – Disclosure of Climate- related Matters (CSA Proposal) in October 2021 for public comment. Although climate-related disclosure is not specifically mandated under Canadian securities law, issuers are required to disclose all material information, which in many cases includes climate- related information. The CSA Proposal imposes a more stringent disclosure requirement, which is mostly aligned with the recommendations of the Task Force on Climate-related Financial Disclosure (TCFD), calling for the disclosure to be made under four key categories – namely, governance, strategy, risk management, and metrics and targets – even if such information may not be material. The CSA Proposal departs from the TCFD framework in two key respects. First, the CSA Proposal does not require issuers to undertake scenario analysis, a modelling tool used to analyze how specific climate- related risks, both physical and transition, may affect an issuer’s business, strategy and financial performance. Second, the CSA Proposal takes a comply-or- explain approach to disclosure of greenhouse gas (GHG) emissions. The two options currently under consideration by the CSA would require issuers to (i) disclose Scope 1, Scope 2 and Scope 3 emissions, or explain why no such disclosure was made; or
Shareholder activism continues in Canada, although the number of formal proxy contests has declined dramatically since its record high in 2015. Boards are becoming more receptive to engaging with both significant shareholders and activist investors. Activists are increasingly achieving their objectives without the need for a public threat of a contest.
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Doing Business in Canada
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