The Canadian Sustainability Standards Board (CSSB) Unveils Inaugural Sustainability Reporting Standards in Canada

TORONTO, Canada, December 19, 2024 – The Canadian Sustainability Standards Board (CESB) officially released the first national sustainability ​reporting standards: CSDS 1, General Requirements for Disclosure of Financial Information Related to Sustainable Development and CSDS 2, Climate-Related ​Disclosures. These standards are ​a crucial moment in Canada’s approach to ​sustainability, which promotes consistency and comparability in financial reporting on sustainability.

CSDS 1 and CSDS 2, which are now part of ​the IFRS S1 ​and IFRS S2 General Standards of the CPA Canada ​Handbook on Sustainability, closely aligned ​with IFRS S1 and IFRS S2 of the International Council on Sustainability Standards (CISB). These adjustments are aimed at meeting unique national priorities and maintaining strong alignment with ​international frameworks. ​It should be noted that ​the CSSB ​has introduced new transitional relief measures to facilitate the adoption of Canadian ​entities.

Transition relief measures tailored to Canada’s needs

In response to stakeholder ​comments, the CSSB provided significant relief to the transition in CSDS 1 and CSDS 2. Institutions receive an additional year to prepare for reporting on sustainability issues beyond ​climate and on greenhouse gas (GHG) emissions. The standards also provide ​an additional two years to harmonize financial reporting and sustainability timelines and three years to adopt an analysis of quantitative climate scenarios. These measures reflect the CSSB’s commitment to balance ambition ​and ​practical ​readiness so ​that Canadian companies can adapt effectively.

According ​to the CSSB, these transition periods allow companies to focus on the development of ​reliable and compatible data without undue cost or effort. This approach aims to maintain alignment with ISSB standards while taking into account Canada’s particular business and operational dynamics. Detailed changes ​and rationality are documented ​in ​the accompanying conclusions, available in the CPA Canada Sustainability Manual.

Supporting Major Canadian Investors

Funds ​for ​the new rules come from Canada’s major pension investors and investment managers, who monitor ​more than $2.25 trillion in assets. ​These stakeholders emphasized the importance of standardized ​sustainability reporting for informed investment ​decisions and effective capital allocation. By supporting CSDS 1 and CSDS 2, these investors stress the need for reliable, comparable and comprehensive sustainability data to assess ​risks and opportunities.

Investors also highlighted the alignment of these standards ​with their mandate to provide long-term and risk-adjusted returns. ​Transparent and ​standardized sustainability statements improve ​governance, increase market competitiveness and ​enhance public confidence. They ​urged entrepreneurs to proactively adopt these standards, stating that ​their rapid implementation ​would contribute to a more sustainable future.

Integration with global standards

SDSS 1 and CSDS 2 are closely aligned with the ISSB IFRS S1 and IFRS S2, which are based on the framework of the Working Group on Climate-Related Financial Divisions. This alignment ensures that Canadian businesses ​operating in different ​jurisdictions are affected by reducing the reporting burden ​and ​can maintain global competitiveness. The changes ​reflect Canada’s unique priorities, ensuring local relevance while respecting a globally recognized baseline.

These ​standards are part of a broader sustainability reporting campaign, which began in 2021 ​with Prime Minister Justin Trudeau’s directive to ​adopt a FTC-based reporting system. ​Recent government announcements emphasized the importance of reporting climate change to large companies, and small entities were encouraged to provide voluntary information.

Multi-year effort within global standards

The CSSB was created in ​2022 to work in collaboration with the ISSB, adapting its global standards for Canadian use. Since the release of the first drafts of CSDS ​1 and CSDS ​2 in March ​2024, the CSSB has actively sought input from stakeholders. This process has added transitional relief ​measures and other amendments that ​address public interest concerns and market readiness.

Bruce Marchand, ​Acting President ​of the CSSB, stressed the importance of ​the new rules:

“Today’s announcement ​means our commitment to advancing sustainability reporting in accordance with international standards, while reflecting the ​Canadian context. These standards set the stage for the dissemination of high quality and consistent sustainability, which is ​essential to informed ​decision-making and public confidence.”

The new rules aim to improve the quality of sustainability information available to investors, regulators and stakeholders, contributing to better informed decision-making and building long-term ​confidence in the market.

Looking ​ahead, the CSSB will continue ​to ​work with ​the ISSB to improve these standards, ensuring that they remain relevant and ​effective ​in ​addressing new sustainability challenges. This collaborative approach highlights the CSSB’s mission to strengthen Canada’s sustainable outreach infrastructure and maintain alignment with global best practices.