Responding to CSSB’s consultation on its sustainability disclosure standards

Forvis Mazars responded to CSSB’s consultation for comments on the following:

1. CSDS 1 – General requirements for disclosure of sustainability-related financial information
2. CSDS 2 - Climate-related disclosures
3. Proposed criteria for modification framework

Below is a summary of some key messages we highlighted to the CSSB to consider:

Alignment with ISSB standards

We support the CSSB’s approach to align the International Sustainability Standards Board (ISSB) S1 and S2 standards without having carve-outs from the standards. This will help to:

• Ensure international consistency of application of the standards for the benefit of all stakeholders.
• Maximise interoperability with other international standards, most notably those issued under the European Commissions’ CSRD / ESRS requirements and the Securities and Exchange Commission (SEC) rule on climate-related financial disclosures.
• Mitigate the impact on multi-national entities reporting in different jurisdictions

Transition relief provided

The CSSB specifically requested comments on adequacy of the following transition reliefs proposed in CSDS 1 and CSDS 2

• Disclosures beyond climate-related risks and opportunities – adequacy to provide a 2-year relief period compared to the 1-year relief in IFRS S1.
• Relief in the first annual reporting period for entities to report sustainability-related financial disclosures after it publishes related financial statement.
• Scope 3 Green House Gas (GHG) emissions – adequacy to provide a 2-year relief period compared to the 1-year relief in IFRS S2.

We welcome CSSB’s proposed transition reliefs as these would give companies time to develop their expertise, processes, systems and controls to gather and report credible sustainability information.

It is important that sustainability disclosure requirements are introduced as soon as practicable, given the pace of adoption in other jurisdictions. As CSSB engages with regulators and legislators

to influence the widespread adoption of its standards, consideration should be given to an appropriate timeline for implementation based on the size and nature of entities.

Additional guidance

We recommend CSSB produce guidance to support Canadian entities during the transition period and adequately communicates guidance materials, particularly Small and Medium sized Entities (SMEs). Providing useful resources will help entities make the most of the transition period and ensure they are better positioned to meet the standards. CSSB can look to collaborate with international partners such as the Global Reporting Initiative (GRI) whose sustainability standards cover broader sustainability topics.

Areas of additional guidance can cover:

• Climate resilience – practical examples of climate related scenario analysis methodology, results and incorporation into decision making, sector-specific guidance (particularly for sectors critical to Canada’s economy and carbon emissions plan), learning and guidance from climate scenario analysis practices from other jurisdictions.
• Sustainability disclosures beyond climate – identifying, assessing and managing sustainability topics; implementing processes and systems to report relevant metrics
• Scope 3 emissions – guidance around emissions calculation to support greater availability of high-quality primary emissions data to input into Scope 3 calculations

Timing of reporting

We support CSSB’s approach of not deleting the requirement to report sustainability-related financial disclosures at the same time as its related financial statements. Reporting both information at the same time would provide investors and other users of general-purpose financial reports with a holistic view of current and potential risks and opportunities entities face. It would also be useful for decision making as it would better bring out the interrelationship, connectivity and interplay between sustainability information and financial performance of entities.