On April 23, 2025, the Canadian Securities Administrators (CSA) announced a pause in their work on (1) new mandatory climate-related disclosure rules, and (2) amendments to the existing diversity-related disclosure rules.
The CSA’s Reason: Focusing on the Competitiveness of Canada’s Capital Markets
The CSA explained that this pause is intended to “support Canadian markets and issuers as they adapt to the recent developments in the U.S. and globally.” The CSA highlights that the “global economic and geopolitical landscape has rapidly and significantly changed” in recent months, resulting in “increased uncertainty and rising competitiveness concerns for Canadian issuers.” In response, the CSA is “focusing on initiatives to make Canadian markets more competitive, efficient and resilient.”
Additional Context and Related Information
Climate Disclosure
In October 2021, the CSA released draft mandatory climate-related disclosure rules for Canadian issuers, known as National Instrument 51-107 Disclosure of Climate-related Matters. In July 2023, the CSA advised it would conduct further consultations to model its draft rules on the newly issued sustainability disclosure standards of the ISSB (International Sustainability Standards Board). In December 2024, the Canadian Sustainability Standards Board (CSSB) issued its inaugural sustainability standards. The CSSB standards are generally aligned with the ISSB standards, except for certain relief such as providing more time for implementation. Immediately afterwards, the CSA advised it would publish revised climate-related disclosure rules for public comment, essentially incorporating the CSSB standards with any modifications it deemed appropriate for Canada’s capital markets.
With the CSA’s announcement on April 23, 2025, this initiative is now paused. However, the CSA reminds issuers that climate-related risks are a “mainstream business issue and securities legislation already requires issuers to disclose material climate-related risks affecting their business in the same way that issuers are required to disclose other types of material information.” The CSA therefore advises that the CSSB standards “provide a useful voluntary disclosure framework for sustainability and climate-related disclosure that issuers are encouraged to refer to when preparing their disclosures.”
DEI Disclosure
In early 2023, the CSA published for comment a proposed rule that would require enhanced disclosure from non-venture issuers regarding how they identify and evaluate new candidates for nomination to their boards and how diversity is incorporated into those considerations. In particular, the CSA sought input on (1) whether the enhanced regime should require specific disclosure with respect to Indigenous peoples, LGBTQ2SI+ persons, racialised persons, persons with disabilities, or women, or (2) whether the specific disclosure should be limited to women on a company’s board, allowing for voluntary disclosure with respect to other under-represented groups. The comment period for the proposed rule ended in September 2023.
The CSA’s pause on its proposed amendments to the existing diversity-related disclosure rules is the first significant update on this matter since the end of the comment period. However, the CSA also reminds issuers that “non-venture issuers will continue to be required to provide disclosure regarding the representation of women on their boards and in executive officer positions based on the existing requirements under National Instrument 58-101 Disclosure of Corporate Governance Practices.”
Going Forward
The CSA advises Canadian issuers that:
- It will continue to “monitor domestic and international regulatory developments with respect to climate-related and diversity-related disclosures and expects to revisit both projects in future years to finalize requirements for issuers.”
- Issuers will be “provided with appropriate notice ahead of any changes to the status of these projects.”
- It will continue to “monitor disclosure practices of issuers and work to address any misleading disclosure, which can include greenwashing, and will provide information and additional guidance as appropriate.”
Additional Resources
The CSA’s news release can be found here.
Capital markets are interconnected and developments elsewhere affect Canadian capital markets from a pure market perspective as well as on the regulatory front. This is a fluid situation, which we will continue to monitor. In that regard, for Fasken’s capital markets thought leadership, visit our Capital Markets and M&A Knowledge Centre and subscribe.
