Is Canadian securities policy starting to mirror a global rollback of ESG and DEI-related disclosure policies?
A recent announcement ("Announcement") by the Canadian Securities Administrators (CSA) suggests the answer may be 'yes'.1 On April 23, 2025, the CSA announced it would pause development of its proposed mandatory climate-related disclosure rule and amendments to diversity disclosure requirements. The announcement also includes a pause in proposed diversity-related disclosure amendments to National Instrument 58-101.
Background
Originally introduced in 2021, the CSA's proposed climate rule—National Instrument 51-107—sought to align Canadian reporting with international norms and address investor demand for consistent, comparable disclosures. However, with the U.S. Securities and Exchange Commission's climate rule now on hold following legal challenges and the election of President Donald Trump, and the EU delaying implementation of its own corporate sustainability directives, the CSA appears to be realigning its pace with global developments.
Despite the pause, issuers remain subject to existing continuous disclosure obligations. Material climate-related risks must still be reported under Canadian securities law, and guidance is available via CSA Staff Notices 51-333 and 51-358. The Canadian Sustainability Standards Board (CSSB) has also introduced voluntary benchmarks for climate-related reporting.
Not a Retreat, a Realignment
The CSA emphasized that the Announcement is not an abandonment of sustainability or diversity goals. Rather, it reflects a strategic pause to maintain regulatory harmony, reduce compliance friction and asymmetry, and ensure competitiveness. Non-venture issuers must still comply with existing gender diversity reporting under National Instrument 58-101.
Environmental and Diversity Considerations Still Significant
It is important to note that proxy advisors and institutional investors continue to shape expectations around ESG disclosure. Greenwashing enforcement has also intensified, with both securities regulators and the Competition Bureau equipped to act. New provisions under the Competition Act allow private claims for misleading environmental statements starting June 2025.
Take-aways
While the Announcement reflects a pause of advancements in the area of environmental and diversity related disclosure, both environmental and diversity related risks and considerations remain relevant to public issuers. Should you have any questions regarding your ongoing disclosure obligations, a member of our business law group would be happy to assist. Feel free to reach out.
Footnote
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
