In a notable shift, the Canadian Securities Administrators (CSA) has paused efforts to implement mandatory climate-related disclosure requirements, citing economic volatility and global uncertainty. The move puts on hold sweeping reforms aimed at enhancing transparency around climate risks, which had been closely aligned with Canada’s broader ESG and carbon neutral strategy. 

Announced by CSA Chair Stan Magidson, the decision also delays proposed amendments to diversity disclosure requirements. “We are focusing on initiatives that improve the competitiveness, efficiency, and resilience of Canadian markets,” Magidson explained, referencing rising geopolitical pressures and economic headwinds. 

Despite this regulatory pause, the CSA reaffirmed that material climate-related risks must still be disclosed under existing Canadian securities laws. Meanwhile, the Canadian Sustainability Standards Board (CSSB) will continue promoting its voluntary climate disclosure frameworks—CSDS 1 and CSDS 2—launched in December 2024. These standards align with international norms, including the IFRS Foundation’s ISSB guidelines. 

Wendy Berman, the CSSB’s incoming chair, emphasized that transparency in ESG reporting remains vital. “Regulatory approaches may shift, but investor demand for credible, comparable climate data is only growing,” she said.  The CSA also reiterated that diversity disclosure obligations under National Instrument 58-101 remain in force. Public issuers must continue to report the representation of women in board and executive positions. Enforcement against misleading ESG disclosures, including greenwashing, remains a priority. 

While the pause may offer short-term regulatory relief to Canadian businesses, it introduces uncertainty for investors seeking clear climate performance benchmarks. Still, by supporting voluntary ESG alignment and pledging future rulemaking reviews, the CSA aims to balance market competitiveness with long-term sustainability goals. As global pressure builds for more robust ESG compliance and carbon neutral strategies, stakeholders will be watching closely for Canada’s next regulatory steps. 

Sources: 

https://esgnews.com/canadian-regulator-csa-halts-mandatory-climate-reporting-requirements/  

https://www.esgtoday.com/canadian-regulators-hit-pause-on-mandatory-climate-reporting-requirements/