Canada introduces new sustainability standards

Posted on January 19, 2025 by Editor

The Canadian Sustainability Standards Board (CSSB) has released its first-ever sustainability disclosure standards, CSDS 1 and CSDS 2, providing frameworks for general sustainability disclosures and climate-related financial reporting. These standards, included in the CPA Canada Handbook - Sustainability, are available free of charge until 31 March 2025 and align closely with the International Sustainability Standards Board (ISSB) frameworks, IFRS S1 and IFRS S2. However, the adoption of these standards remains voluntary unless mandated by regulators.

Notably, the CSSB has introduced several transition relief measures, including delayed effective dates and phased requirements for disclosures beyond climate and Scope 3 greenhouse gas emissions. These modifications aim to accommodate Canadian market readiness while maintaining alignment with ISSB's global baseline.

However, one key element is missing from the conversation: a mandated digital taxonomy. While the ISSB has emphasised the critical role of digital reporting to ensure accessibility, comparability, and usability, the CSSB's standards currently lack a digital twin. Digital taxonomies, powered by XBRL, are essential to transform high-quality disclosures into discoverable and actionable data, unlocking the full potential of sustainability reporting.

As regular readers of this newsletter will know, it is absolutely clear that jurisdictions like Canada that publish their own versions of the ISSB standards that are substantially identical to the ISSB standards should use the ISSB's own digital twin: the ISSB taxonomy. Creating a copy of the ISSB taxonomy, rather than the official one, would be like opening a new grocery story, and printing your own bar codes and sticking them onto the packaging, over the top of the ones that are already printed on the products for sale.

Canada now has an opportunity to embrace global best practices by implementing digital reporting. As sustainability reporting evolves, regulators and businesses alike should prioritise structured, digital disclosures to support transparency and accountability in the capital markets.

For more information, see the CSSB's announcement.