The Canadian Sustainability Standards Board (CSSB) is set to approve its draft sustainability standards on Friday and launch a consultation in March, Responsible Investor has been told.
This will be the first consultation on the planned Canadian Sustainability Disclosure Standards (CSDS). They will “align with the global baseline standards set by the International Sustainability Standards Board (ISSB) but with modifications to align with the needs of the Canadian market”, its chair Charles-Antoine St-Jean told RI.
Three documents will be put out for consultation on 13 March: drafts of the proposed CSDS 1 and CSDS 2, and a paper setting out CSSB’s proposed Canada-specific changes to the international sustainability standards.
After the three-month consultation, the board will review the feedback and “presuming there are no major surprises in responses” aim to issue the CSDS 1 and 2 at the end of Q3 2024, St-Jean said.
After that, Canada’s regulators will consider whether the standards should be mandated, but the CSSB is aiming for them to be available for voluntary use from January 2025.
“It’s 99 percent there. We’ve been working on the final tweaks in wording this week and the board is set to approve the final version [of the proposals] on Friday,” St-Jean said.
The CSSB will propose giving reporting companies an additional year to meet the Scope 3 requirements of the ISSB climate standard, meaning these would be in place from January 2026, he added.
“This is appreciating the maturity and capacity of the market at the moment. We get there is anxiety right now about doing it. So, we think by providing another year it will give sufficient time for capacity to be at a reasonable level so that firms can confidently report,” he said.
“Of course, no one will be looking for perfection in the first few years,” he added.
Chaired by St-Jean – former regional director of the Americas for the IFRS Foundation – the CSSB is comprised of 12 representatives from key institutions, including Manulife Investment Management, PSP Investments, CIBC and Nutrien.
Looking ahead, St-Jean said that later this year or early next year, the CSSB is going to look at how it would propose for CSDS 1 and CSDS 2 to deal with indigenous rights as an issue “as it’s so important in Canada”.
He also said that the board is going to spend time discussing guidance to support implementing the CSDS 1 and CSDS 2.
A potential plan to add further members to the CSSB will also be discussed with its oversight council later this year.
“It depends on what our future remit is decided as. We’re currently very focused on capital markets, but we could want to look more at the standards in relation to SMEs or the public sector, and if so we’d want to add representatives to the CSSB,” St-Jean said.
Last year, the ISSB conducted a consultation on its priorities for the coming two years. As part of this, it sought feedback on whether it should research projects on topics including biodiversity, ecosystems and ecosystem services; human rights; and human capital management.
As part of its response, the CSSB said if the ISSB were to prioritise a single project it should be biodiversity.
“For Canada – like most other countries – biodiversity is integral to our economy. If you want to access metals and minerals you have to deal with nature. It is also very closely related to climate and has a lot of momentum behind it, so could be considered a natural next step for the ISSB,” St-Jean told RI.
“As the ISSB evolves… it has to be careful about the issues it chooses to develop, and when it comes to consensus, I think it is more there on nature by comparison to human rights.”