The chief executive of the Ontario Securities Commission (OSC) says the Canadian securities regulators’ move to pause work on the development of mandatory climate disclosures is “not indefinite” and that he’d like to see certain developments before the work resumes.
“Some people have thought, ‘Well, this isn’t a pause. This is a final decision.’ That’s not true at all,” Grant Vingoe said at the Responsible Investment Association (RIA) conference in Toronto on Tuesday. He’s also a board member of the International Organization of Securities Commissions.
“My own personal view is, within the next couple years, we’re going to be in a position to revisit this.”
The Canadian Securities Administrators (CSA) announced in late April it would pause its efforts to finalize mandatory climate disclosures, citing global economic and geopolitical developments for the decision. It said it wanted to focus on making Canadian markets “more competitive, efficient and resilient.”
The move has been met with criticism from sustainable finance experts and environmental advocacy groups — just this week, the Women Leading on Climate advocacy group issued an open letter calling on the CSA to resume work on climate disclosures. The group said halting this work puts the Canadian economy at risk.
Michael Jantzi, who’s a member of the International Sustainability Standards Board (ISSB) and spoke with Vingoe during a fireside chat at the RIA conference, also expressed his disappointment with the CSA’s move, saying “investors have spoken long and consistently about the need for mandatory disclosures to get this comparable, verifiable data.”
Jantzi then asked Vingoe why the CSA made the move.
Vingoe shared that the CSA was hoping to first consult on disclosure standards set out by the Canadian Sustainability Standards Board (CSSB) and inspired by the ISSB, but there was reluctance to do so at a moment of “peak anxiety” and “peak conflict” between Canada and its trading partners, namely the U.S.
“The hope was that things would settle down and we’d be able to revisit the excellent work of the CSSB and the ISSB,” he said.
“The notion that we’ve abandoned climate disclosure, that disclosure is in the rear window, that we’re not focused on disclosure, is inaccurate.”
Vingoe also said there’s no guarantee how the CSA will move forward on climate disclosures but that he believes “there’s a need to go back, to go to the market at an appropriate time and get the input on moving forward.”
However, he said there are certain developments he wants to see before then.
For one, Vingoe said he’d like to see more progress on financing opportunities for the “core of our market,” referring to small and medium-sized enterprises in Canada.
He also said he wants to see larger public companies with a significant amount of resources successfully implement the standards set out by the CSSB, which remain voluntary without a CSA rule.
Another thing Vingoe said he’d like to see is “a demonstrated case that capital raising opportunities will be enhanced by following the CSSB standards,” meaning Canada would be able to raise capital from countries beyond the U.S., which is unlikely to adopt mandatory disclosures in the near term.
Jantzi also asked Vingoe about Bill C-59, which introduced a new section to the Competition Act that primarily focuses on combating greenwashing.
Vingoe said the impetus behind the bill was “well meaning, but it’s a prime example where if you don’t design the policy and legislative requirements appropriately, you can have profound unintended consequences.”
“The idea that an enforcement and liability regime for misleading statements on climate and competition law done at the federal level could actually impede disclosure and actually cause people to retract disclosure is remarkable,” he added.
Vingoe said he believes the path forward could be introducing “a safe harbour to protect and create more ambition for climate disclosure” without leading to “automatic liability.”
With files from The Canadian Press
IE was a media sponsor of the RIA Conference.