Canada to set mandatory climate disclosures for large companies
October 18th, 2024
Canada will set mandatory climate-related disclosures for large federally incorporated private companies, as part of two sustainable finance initiatives aimed at achieving net zero by 2050.
Deputy prime minister and minister of finance Chrystia Freeland confirmed the government will amend the Canada Business Corporations Act to mandate this disclosure, with specific regulations under development to define their scope.
While small- and medium- sized businesses are exempt, they have been encouraged to voluntarily adopt similar climate disclosures.
The disclosures aim to attract more private capital into Canada’s largest corporations by helping investors understand how businesses are managing climate-related risks to ensure that capital allocation aligns with the demands of a net-zero economy.
The disclosures also form part of the Canada’s broader target to reach net-zero by 2050. To further strengthen efforts towards this goal, the country will also introduce the Made-in-Canada sustainable investment guidelines.
These voluntary guidelines establish a credible classification system for “green” and “transition” investments, offering the clarity needed to accelerate the flow of private capital into sustainable activities across the country’s economy.
They will also help investors identify job-creating activities, from building electric vehicle batteries, to generating clean energy and decarbonising emissions-intensive heavy industries, all while aligning with the Paris Agreement to limit global temperature rise to 1.5°C.
The two sustainable finance initiatives aim to mobilise further private sector capital towards activities essential to building a net-zero economy.
Increased private sector capital will enable businesses to grow the economy, create more well-paying jobs for Canadians, and strengthen their resilience against the climate-related risk.
Freeland said: “In the 21st century, a competitive economy is a net-zero economy. We are seizing Canada’s economic advantages to attract investment and ensure Canadian workers benefit their fair share in the global race to net-zero.”
Last Updated: 18 October 2024