Skip to main content
The Globe and Mail
Support Quality Journalism.
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); } //

Roger Beauchemin is president and chief executive officer of Addenda Capital

Canadian investors want consistent and comparable company reporting of climate-related risks and opportunities to inform their allocation of investment capital. Yet disclosure continues to be uneven across the country, creating the risk of capital moving to other jurisdictions with more transparent reporting.

It is now well-established from science-based evidence that climate change is a risk to Canada’s economy. Businesses need to identify and manage those risks and to align their strategies with Canada’s new A Healthy Environment and a Healthy Economy plan to reduce greenhouse gas emissions.

Story continues below advertisement

Canada and the other Group of 20 countries share the common objective of enhancing climate-related disclosure, and the Financial Stability Board’s Task Force on Climate-related Financial Disclosures, or TCFD, has helpfully proposed a framework that captures governance, strategy, risk management and targets and metrics for tracking successes.

The TCFD has rapidly gained support globally. Its 2020 status report states that more than 1,340 companies with a market capitalization of US$12.6-trillion and financial institutions responsible for assets of US$150-trillion have endorsed the TCFD framework, but reports that many companies globally, including in Canada, continue to have poor disclosure. More than 110 governments and regulators have expressed support for the TCFD. The British and New Zealand governments have introduced mandatory TCFD-aligned disclosure for companies in their jurisdiction.

Canadian law already requires publicly traded companies to disclose material climate-related risks. Last year, the Canadian Securities Administrations issued guidance that climate change is a mainstream business issue and that securities laws require disclosure of material climate-related risks and the management of those risks. But it’s not working.

And as Canada attempts to rebuild from the economic blow dealt by the COVID-19 pandemic, we cannot afford to risk losing access to investment capital as we fall behind on climate risk disclosure.

As one of Canada’s largest multiasset investment firms, with more than $35-billion under management, Addenda Capital supports enhanced disclosure of climate-related financial risks across asset classes and plays an active role in promoting sustainable financial markets.

It is time for Canada to act. The federal government should require federally regulated companies and financial institutions to disclose management of climate-related risks and opportunities in alignment with the TCFD framework or to explain why they have concluded, after carrying out duly diligent assessment, that climate change does not pose a material risk to their business.

Provincial governments should also require this disclosure and adopt the TCFD framework as a means to bring consistency, transparency and comparability to securities law disclosure in Canada. In the meantime, Canadian securities regulators should direct resources toward ensuring compliance with existing laws on disclosure of material climate-related risks.

Story continues below advertisement

There are extensive resources available to support companies in addressing climate-related risk.

  • The TCFD Knowledge Hub offers guidance on implementation and scenario testing.
  • The Bank of Canada and Office of the Superintendent of Financial Institutions are piloting a program with financial institutions to develop scenarios to assess climate-related risks to the financial system.
  • Members of the Canadian Sustainable Finance Network, established by the Institute for Sustainable Finance at Queen’s University in Kingston, have already been publishing research on climate risk and implications for companies and investors.
  • The Canada Climate Law Initiative, based at the University of British Columbia, offers guidance for boards to get started. Its resources include the Audit Committees and Effective Climate Governance guide. Also, its climate governance experts from across the country offer their time free to meet with corporate boards to discuss effective climate governance.

It is time for Canada to demonstrate leadership in climate-related disclosure. Our financial system and our economy depend on it.

Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

If you do not see your comment posted immediately, it is being reviewed by the moderation team and may appear shortly, generally within an hour.

We aim to have all comments reviewed in a timely manner.

Comments that violate our community guidelines will not be posted.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies