AMF of Canada published a notice (51-358) by the Canadian Securities Administrators (CSA) on reporting of climate change-related risks. This notice is intended to help issuers, particularly smaller issuers, by providing guidance on preparing the disclosure of material climate change-related risks. Climate change-related risks are a mainstream business issue. Issuers should consider these risks as part of their ongoing risk management and disclosure processes and they must disclose any such risks that are material to their business.
The guidance is intended to assist issuers, including their boards and management, to identify material climate change-related risks and to improve their disclosure of such risks. Disclosure of climate change-related risks provides an opportunity for issuers to explain to existing and potential investors how they are adapting their business model to any material risks that they are facing and to address questions regarding the sustainability of the business model. This notice:
- Provides an overview of the responsibilities of boards and management relating to risk identification and disclosure
- Outlines relevant factors to consider in assessing the materiality of climate change-related risks
- Provides examples of some of the types of climate change-related risks to which issuers may be exposed
- Includes questions for boards and management to consider in the climate change context
- Provides an overview of the disclosure requirements if an issuer chooses to disclose forward-looking climate change-related information
The notice clarifies existing legal requirements and does not create any new ones. It reinforces and expands on the guidance provided in CSA Staff Notice 51-333 on environmental reporting guidance and should be read in conjunction with that notice. The guidance in the notice is based on the CSA research, review, and consultations on issuers’ disclosure of risks and financial impact associated with climate change.
Keywords: Americas, Canada, Banking, Insurance, Securities, Climate Change Risks, Reporting, Disclosure, Guidance, Canadian Securities Administrators, AMF
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