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Regulators are asking stakeholders to comment on pending sustainability disclosure standards, even if simply to express support.

“It’s completely important for investors to weigh in,” said Katie Schmitz Eulitt, director outreach, global investors, with the IFRS Foundation. She spoke Tuesday on a panel at the 2024 Responsible Investment Association conference in Vancouver.

Comments are due June 10 for the two exposure drafts of the Canadian Sustainability Disclosure Standards, known as CSDS 1 and 2. CSDS 1 covers general disclosure requirements for sustainability-related financial information, and CSDS 2 covers climate-related disclosures. The CSDS are based on the IFRS Sustainability Disclosure Standards.

“A lot of Canadian investors have been very supportive of … the development of the standards,” said panel moderator Milla Craig, president and CEO of Millani Inc., an ESG and impact advisory firm. Millani also supports the standards, and didn’t initially plan to respond to the consultation.

“But what I’m hearing you say is, in fact, we really need the investor community [to respond],” Craig said. “I know everyone is tired of consultations — we’ve had way too many — but it’s part of the evolution and development of a market.” (Millani now plans to respond to the consultation.)

Schmitz Eulitt said CSDS 1 and 2, in their current forms, are the most closely aligned with the IFRS standards in the world. However, “investors need to continue to express their support for that,” because that alignment could change if the comments suggest it should.

“It’s super important” to respond, agreed panellist Denise Weeres, director, corporate finance, with the Alberta Securities Commission.

Once CSDS 1 and 2 are finalized, companies may begin voluntary compliance. However, the standards will not legally be required unless adopted by the government or regulators, Weeres said.

The Canadian Securities Administrators (CSA) “are contemplating that we would potentially refer to and require disclosure against [CSDS 1 and 2],” Weeres said. “But we’ll be considering whether there should be any accommodations and exemptions, who those rules should apply to, and whether there should be any variations.”

Weeres acknowledged that Canada has many small public companies that may not have the capacity or ability to comply with certain disclosure requirements.

“We will be using [stakeholder] feedback to assess whether there’s different treatment for them,” she said.

Weeres said the earliest the CSA could finalize its own rule is two years from when a rule is introduced, due to consultation, translation and other requirements.

Adelaide Chiu, vice-president and head of responsible investing with NEI Investments, said during the panel that the Canadian Sustainability Standards Board intends to publish the final versions of CSDS 1 and 2 by the end of 2024. (Chiu is a member of the board.)

Schmitz Eulitt said 50 jurisdictions representing 55% of global GDP, 40% of market capitalization and 50% of greenhouse gas emissions plan to adopt the IFRS standards as a global baseline, as Canada plans to.

Disclosure: Investment Executive was a media sponsor of the RIA Conference.