What do sustainability disclosure standards cover exactly?
In general, sustainability disclosures standards look beyond financial statement performance alone to consider the broader environmental and societal issues that affect the entity’s governance, strategy, risk management and performance.
This means the answer depends on the nature of the entity (e.g., its size, organizational structure, industry, and region). What’s critical to measure and disclose for one industry may not be critical for another.
Why do we need a Canadian Sustainability Standards Board?
A common set of standards will help conscientious companies achieve sustainability goals in a way that instills investor confidence.
The decision to establish the Canadian Sustainability Standards Board (CSSB) included strong support from the market. Voices from across the country and across industry sectors told us this was the right move. In fact, Canada has taken a lead in establishing a national sustainability standards board. Other countries that have established national sustainability standards boards include Japan and Korea.
We hope to be a model for how other countries can interact with the International Sustainability Standards Board (ISSB).
Read more about the decision to establish the CSSB and watch our video on the CSSB’s role.
How will the CSSB reconcile all the other sustainability reporting frameworks out there?
There’s been considerable consolidation of sustainability-related standards and frameworks at the global level. Of course, businesses still face choices when it comes to choosing which standards to apply depending on the focus and objectives of their sustainability disclosures. They might also be subject to specific jurisdictional requirements.
The CSSB’s role is not to reconcile other reporting frameworks, but instead to work in coordination with the ISSB to support the adoption of global baseline sustainability standards.
Are sustainability disclosure standards mandatory in Canada?
Currently, IFRS Sustainability Disclosure Standards – including IFRS S1 and IFRS S2 – are not mandatory in Canada.
However, they may be in future. Canada’s regulators and legislators will consider whether – and over what time frame – CSDSs should be mandated.
Until further decisions are made, the standards would apply to whomever chooses to use them on a voluntary basis.
Who will need to apply CSDSs if they become mandatory?
Canada’s regulators and legislators will determine who will need to apply CSDSs.
Entities that aren’t subject to the standards might have their own reasons to apply them. These could include, for example, ensuring the information needs of their supply chain partners are met.
What about Canadian-specific industries – how will CSDSs support these?
CSDS 1 and CSDS 2 are meant to be applied by publicly listed enterprises, but they also have an industry-based approach embedded in them. They leverage the Sustainability Accounting Standards Board’s subset of sustainability issues that are relevant to the performance of 77 industries.
Has the CSSB defined the term “Canadian public interest”?
The CSSB received significant interest in how it defines and considers Canadian public interest during its consultation on the Criteria for Modification Framework. We acknowledge these concerns and refer to the Independent Review Committee on Standard Setting in Canada’s (IRCSS) final recommendation that “[w]hile the public interest is a foundational issue, defining it with precision is difficult because it is a dynamic concept and highly contextual to particular circumstances.”
The CSSB strives to uphold the IRCSS’s recommendations, which reflect the IRCSS’s underlying position that public interest is best served when:
a) standards are developed by independent and publicly accountable boards that operate transparently;
b) boards are subject to oversight by independent oversight bodies; and
c) the standards-development process makes clear how the public interest has been considered. In its work, the CSSB seeks to determine what is in the Canadian public interest, including by listening to, analyzing, and deliberating on the feedback received from interested and affected parties.
The CSSB seeks to serve the Canadian public interest by setting and maintaining high-quality sustainability disclosure standards.