The Government of Canada has pledged $10m over five years to support continued operations of the International Sustainability Standards Board (ISSB) in Montréal.
This funding, to be delivered by Canada Economic Development for Quebec Regions and supplemented by contributions from a coalition of several dozen Canadian public and private institutions, was announced by Parliamentary Secretary to the Minister of Finance and National Revenue Ryan Turnbull at the end of the Montreal sustainable finance summit.
After spending most of his 11-minute speech praising climate disclosures as a "critical building block of a sustainable finance ecosystem" that is "often underrecognised" but nevertheless "crucial", Turnbull didn't mince his words: "If you remember nothing else from what I said today, let it be that: you can't have a developed domestic or global sustainable finance market without defined climate disclosures standards - one is a prerequisite for the other, we recognise this."
But when it comes to adoption of such standards in Canada, Turnbull was rather vague: "The federal government will have more to say [on this] soon."
Long gone are the days when Canada had the stated ambition to be the first jurisdiction to adopt ISSB standards.
Earlier in the day, Canadian Sustainability Standard Board (CSSB) chair Wendy Berman reminded the audience that Canada securities regulators had come up with climate disclosures rules before its US counterpart - the SEC - said it would start work on its own requirements.
In 2019, Canadian Securities Administator (CSA) published Staff Notice 51-358 - Reporting of Climate Change-related Risks. It was a guidance on how issuers should think about and disclose material climate-related risks under existing securities-law disclosure obligations. It did not create a new mandatory climate-disclosure regime. In 2021, it published Proposed National Instrument 51-107 for comment, which proposed obligatory disclosures, but that work was paused and never resumed.
"We were ahead," Berman said. "And we are now behind."
Why the delay?
Canada's delays in adopting ISSB standards only came up once in the on-stage debate at the four-day conference.
Asked about the issue, Barbara Zvan, president and CEO of the University Pension Plan, opined that it was a complicated matter given the number of regulators the country has at provincial and federal level.
Away from the stage's spotlight, stakeholders painted a different picture to Corporate Disclosures.
Of course, there is the question of the share of the extractive industry in Canada's GDP, a sector which allegedly doesn't want such disclosures. Yet, the CSSB granted them some leeway in the 'translation' of the ISSB standards to the "Canadian context". And Australia, whose economy also faces a dependency to poluting sectors, managed to push the rules through, so that might not be the main explanation.
Perhaps the CSA aborted climate rule carries some learnings, as it was ditched "because of changing global economic and geopolitical conditions". With its economy so intertwined to that of the US, the Northern neighbour decided to wait and see what the superpower South of its border would do with the SEC's proposed climate disclosure rule – the rest is history and neither country has regulatory requirements in place..
With that in mind, it is no surprise that many stakeholders told Corporate Disclosures that after President Trump's second election, the CSSB was told not to go public, beat the drum or make noise about the standards.
There is no pretending that Canada's funding will be welcome news for the ISSB and the IFRS Foundation, given their financial difficulties, revealed by Corporate Disclosures last year.
Yet in the same week that Brazil - the ISSB's poster child: the first country to adopt the IFRS S1 and S2 and to do so with no amendments - reversed course and returned sustainability reporting to the voluntary realm. The international standard setter would therefore have no doubt welcomed the adoption of its standards by a North American G20 jurisdiction.
Indeed, asked about his ideal development for the next 24 months, ISSB chair Emmanuel Faber, also at the Montreal summit, said it would be for the top 50 securities and exchanges on the five continents in the world to adopt ISSB standards.
In Mark Carney's shadow
Canada's lack of adoption of climate disclosure rules is even more puzzling under its current government. Prime Minister Mark Carney was the driving force behind the TCFD and has been on the record countless times on climate risk, as well as the role of disclosures for sustainable finance.
But since he assumed office, his government has given little indication on making such rules mandatory in Canada. A dichotomy that Canadian stakeholders laugh off nervously, all with the same response: "I bought his book."
In Value(s), Carney argues for the need of a foundational change to build an economy and society based not on market values but on human values.
One stakeholder disenchanted with the state of affairs, not only in Canada but globally, left Corporate Disclosures pondering a delicate question: What does it say if the man behind the TCFD - one of the most intelligent thinkers of his generation, a leader who has spent the past 15 years arguing that climate risk is a financial issue and helped put that idea on the map of mainstream finance - comes into a position of power and still does not, cannot or will not act?