On climate, will the real Mark Carney please stand up? requested the title of a recent Globe and Mail article.

Written by Jeffrey Jones, it surveys the record and current stance of Canada’s new Prime Minister in a number of climate- and sustainability-related areas. The following passage relates to corporate reporting:

• Mr. Carney has often spoke of the “plumbing” that must be in place before the world’s financial systems can be directed to supporting to push to net zero – corporate disclosure, target-setting, standardization of reporting, planning for stranded assets and a host of other things.
• He was involved in the development of the International Sustainability Standards Board, whose reporting rules are now being adopted in countries that represent more than half of global gross domestic product, including Canada.
• “As opposed to saying you can’t invest in fossil fuels, he was saying, basically, if you’re invested in fossil fuels, then disclose the risk as well as understand the risk,” Mr. Leech said.
• At the Senate committee hearing last year, Mr. Carney lamented Canada’s slow pace implementing climate-related financial rules, calling the efforts “patchwork, delivered late and falling short of international standards.”
• But making climate-related financial standards mandatory and formalizing a taxonomy certifying investments as green or transitionary have not figured prominently in Mr. Carney’s election campaign.
• They should be – especially after he lamented Canada’s foot-dragging on the file, said Julie Segal, senior program manager of climate finance at Environmental Defence.

Note the reference in the second paragraph to how ISSB standards “are now being adopted in countries…including Canada.” This present-tense was consistent with the ISSB’s Progress on Corporate Climate-related Disclosures—2024 Report, which summed up the state of Canadian activity as follows:

• In March 2024 the Canadian Sustainability Standards Board proposed sustainability-related disclosure standards for public consultation, which are based on ISSB Standards.
• To become mandatory under Canadian securities legislation, the Canadian Sustainability Disclosure Standards are required to be integrated into a rule of the Canadian Securities Administrators, which anticipates consulting on a revised rule setting out climate-related disclosures once the Canadian Sustainability Disclosure Standards are finalized.

Jones, it must be said, had been consistently over-optimistic on this front, stating in the Globe’s coverage of ISSB rule finalization in June 2023 that “Canadian businesses will have several months to prepare as a domestic standards body and financial regulators work out the details of how they will be adopted in this country.” Well, the domestic standards body did complete its piece of the work (hardly within several months though), but the financial regulators (that is, the Canadian Securities Administrators) announced within a week or so of the article that work in this area is officially paused, and it’s clear that if the CSA ever does issue something, it will fall far short of a substantive proposal to adopt ISSB standards. In other words, it’s time for the prevailing conversation to move from how/when will the ISSB/CSSB standards be adopted in Canada to an acknowledgement, however morose, that they won’t be.

For one thing, the CSA already signaled in late 2024 that: “Given the interconnectedness of our markets, we will be carefully considering developments in the United States.” Well, since then of course, the SEC abandoned the climate-related disclosure rule it had previously proposed, the new acting Chair calling it “costly and unnecessarily intrusive” – the SEC now emphasizes instead how the “existing disclosure regime already requires companies to inform investors about material risks and trends—including those related to climate—by empowering companies to tell their unique story to investors.”  Moving predictably in line, a recent CSA release noted: “Climate-related risks are a mainstream business issue and securities legislation already requires issuers to disclose material climate-related risks affecting their business in the same way that issuers are required to disclose other types of material information.” The release pointed to the CSSB standards as “a useful voluntary disclosure framework for sustainability and climate-related disclosure that issuers are encouraged to refer to when preparing their disclosures,” and a reasonable prediction is that this as far as the CSA will ever go on that topic. And as indicated above, it seems unlikely that Prime Minister Carney would have much to say about that, given the uncertain benefits of wading into provincial matters, or of anything that might possibly be spun as a competitive disadvantage.

But where will Canada be then, given its strenuous attempts to position itself as a leader in this area, to the extent of fighting to win a secondary ISSB location in Montreal for “key functions supporting the new board and deeper co-operation with regional stakeholders.” That now looks like deeper co-operation in stalling, gutting and resisting, which isn’t much to brag about. Particularly given that, as the Globe and Mail article points out, Carney’s early moves in office include abandoning Canada’s carbon tax regime, throwing some bones toward the country’s toxic oil sands, and slipping backwards in leading financial industry “greening.” One completely understands the electoral calculations behind these moves, especially given the Trumpian reordering of priorities, but still, it’s going to be awfully hard to take any future Canadian rhetoric seriously…

The opinions expressed are solely those of the author.