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Since its inception in 2002, the Canadian Coalition for Good Governance has had its sights trained on governance practices at Canadian public companies. Now, the advocacy group – whose members include pension funds, mutual funds and institutional investors – is turning its attention to Corporate Canada’s environmental and social practices, as well.

The organization published a new guidebook on Tuesday aimed at helping boards develop strategies for the oversight of environmental and social factors, based on interviews with companies that are considered industry leaders in these areas. The document includes 29 recommendations covering topics such as risk management, disclosure to shareholders and board composition.

Barbara Zvan, who headed the committee that drafted the document, said the issue is gaining momentum as investors are becoming increasingly aware of how a company’s environmental and social practices can affect its stock price.

“People are starting to understand that there’s value to this,” said Ms. Zvan, chief investment risk officer at Ontario Teachers’ Pension Plan.

“You’re starting to see research coming out. I think this is just an area where more and more people are really beginning to understand that there’s an impact.”

Institutional investors have been pressing companies lately for more fulsome disclosure on their environmental and social practices. Climate risk has become particularly top of mind, as companies in carbon-heavy industries such as mining and energy begin the transition to a low-carbon economy.

Last month, the Canadian Securities Administrators – an umbrella organization of provincial securities regulators – published a review that found the disclosure of climate-change-related risks varies widely between large publicly-traded companies.

In its staff notice, the CSA said it plans to develop new guidance to help companies meet existing disclosure rules.

Ms. Zvan agrees that current disclosure practices are “very inconsistent,” making it difficult for investors to compare companies.

The CCGG report recommends that companies use clear, forward-looking and comparable metrics when disclosing environmental and social factors to shareholders. The report also suggests, among other things, that board members ensure those factors are a regular topic of discussion at meetings, and are incorporated into the company’s long-term strategic goals.

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