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Posted December 16, 2021
Prime Minister Signals Mandates for Climate Disclosure Objectives in 2022
On December 16, 2021, the Office of the Prime Minister of Canada (the “PMO”) provided the sessional mandate letters for each federal minister. In particular, mandate letters were sent to Deputy Prime Minister and Minister of Finance Chrystia Freeland and Minister of Environment and Climate Change Steven Guilbeaut.
The mandate letters outline two objectives. The first objective requires the creation of mandatory climate-related financial disclosures based on the Task Force on Climate-related Financial Disclosure (TCFD) framework. The second objective requires certain federally regulated institutions (financial institutions, pension funds and government agencies) issue climate-related financial disclosures and net-zero plans.
TCFD
The TCFD framework is being used as the “go to” framework to assist in the development of disclosure requirements. The proposed National Instrument 51-107 - Disclosure of Climate-related Matters (in a period of public consultation at the present time) aligns with the TCFD framework. The International Sustainability Standards Board (“ISSB”), launched in November of 2021 by the International Financial Reporting Standards Foundation, also aligns with the TCFD framework.
Net-Zero
An organization’s net zero plan outlines the plan to balance (or more than offset) the greenhouse gas emissions that an organization produces across its business and supply chain.
Right now, net zero plans are voluntary but certain federal agencies already began their sustainability initiatives. The Office of the Superintendent of Financial Institutions announced membership into the International Network for Greening the Financial System (“NGFS”). The NGFS is an international group of central banks that share and promote best practices to develop climate and climate related management measures for the financial industry.
Global System with Comparable Climate-related Financial Disclosures
The TCFD is the framework adopted by the UK and is being recommended by the Security Exchange Commission (SEC) Chairman Gensler for the US to use going forward. The Canadian regulators will likely align with the UK and US to promote a globally comparable climate-related financial disclosure system.
Suggested Actions
Tasks to help you prepare
DISCLOSURE AND NET-ZERO PLANS BASED ON TCFD
It is recommended that federally regulated institutions (including financial institutions, pension funds and government agencies) develop climate-related financial disclosures and net-zero plans based on the TCFD framework. It is likely to become mandatory soon.
Suggested Resources
Curated items from our library to help you out.
Mandate Letter to Minister of Environment and Climate Change - Minister Guilbeault