9 | Change Is in the Air: Climate-Related Disclosure
– Metrics and targets. Where the information is material, an issuer would have to disclose the metrics and targets that it uses to assess and manage climate- related risks and opportunities. The CSA is also considering whether to mandate disclosure of Scope 1, Scope 2 and Scope 3 greenhouse gas emissions. Importantly, the CSA is not proposing to require disclosure of scenario analysis. If adopted prior to December 31, 2022, these disclosure requirements will apply to non-venture issuers’ annual filings for the financial year ending December 31, 2023 (i.e., the filings due in March 2024), and to venture issuers’ annual filings for the financial year ending December 31, 2025 (i.e., the filings due in April 2026). For our recommendations on how the CSA can improve upon its proposed rules, see our comment letter. If adopted prior to December 31, 2022, these disclosure requirements will apply to non-venture issuers’ annual filings for the financial year ending December 31, 2023, and to venture issuers’ annual filings for the financial year ending December 31, 2025.
In October 2021, the CSA published proposed National Instrument 51-107 – Disclosure of Climate-related Matters (NI 51-107) for stakeholder consultation, which builds upon climate-related guidance published by CSA staff dating back to 2010. Despite the CSA’s conclusion that issuers are generally providing more and better climate-related information than they did five years ago, that progress was not enough to allay the CSA’s concerns that, in the absence of hard-and-fast rules, issuers’ disclosure may not be complete, consistent and comparable. As discussed in more detail in Chapter 5, NI 51-107 would require all reporting issuers to disclose climate-related information as it pertains to the four core elements of the Task Force on Climate-related Financial Disclosures (TCFD) recommendations: – Governance. An issuer would have to describe the board’s oversight of, and management’s role in assessing and managing, climate-related risks and opportunities. – Strategy. Where the information is material, an issuer would have to describe the climate-related risks and opportunities it has identified in the short, medium and long terms, as well as their impact on the issuer’s businesses, strategy and financial planning. – Risk management. An issuer would have to describe its processes for identifying, assessing and managing climate-related risks, and how those processes are integrated into the issuer’s overall risk management.
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Governance Insights 2022
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