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Canadian securities regulators have finished reviewing how large publicly traded companies disclose their climate change-related risks to investors and have found that the level of information provided varies widely.

Climate-related disclosure has become a hot topic recently, as institutional investors press companies for more information on how they plan to manage the transition to a low-carbon economy. Companies in carbon-heavy sectors such as mining and energy face the highest pressure from investors who fear being stuck holding stranded assets.

In a staff notice published Thursday, the Canadian Securities Administrators – an organization composed of provincial securities regulators – says it plans to develop new guidance to help companies comply with existing disclosure rules.

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The CSA says it is also considering putting in place new rules that would require companies to provide more information in areas such as their governance processes relating to material risks and opportunities, as well as how they oversee the identification, assessment and management of material risk.

The CSA’s review looked at the mandatory and voluntary climate change-related disclosures of 78 large companies from the S&P/TSX composite Index. The regulators also consulted with companies and investors and reviewed disclosure requirements in jurisdictions outside of Canada.

Huston Loke, the director of the Ontario Securities Commission’s corporate finance branch, said the review found that the content and scope of the disclosure varies considerably between companies.

“That’s exactly why this kind of work is important, because investors need to make decisions, they need to compare one issuer to another and they need to consider how that issuer fits into their portfolio and their risk appetite,” Mr. Loke said in an interview.

Edward Waitzer, a partner at Stikeman Elliott LLP and the head of the firm’s corporate governance group, said the CSA notice - albeit a useful overview - falls short on an issue where Canada should be leading.

France mandates disclosure of climate risks by public companies, lenders, asset managers and institutional investors, and in the U.K., requiring public companies to disclose their scope 1 and 2 greenhouse gas emissions on a comply or explain basis has boosted disclosure levels from less than 50 per cent to over 90 per cent, Mr. Waitzer said.

“It’s difficult to explain why a country with an economy so deeply rooted in energy has fallen behind on best practices to better enable investors, issuers, lenders, policy makers and citizens to evaluate climate-related risks,” Mr. Waitzer said in an e-mail.

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“Given the dynamics of the CSA, we may need to look for leadership at the political level.”

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