‘Companies may be further along the path to harmonisation than their wording suggests’
Canadian ESG reporting among major public companies remains fragmented, with most TSX 60 issuers combining multiple standards rather than converging on a single framework, according to new research from Concordia University’s John Molson School of Business.
Researchers from the Climate Measures and Reporting Impact Lab analysed sustainability disclosures and found companies “mixing and matching” standards in a largely voluntary environment.
Of the 60 companies in the index, 58 publish some form of sustainability reporting. Among those, 56 reference specific ESG standards, drawing from six different sets in total. Only nine companies refer to a single standard, while 18 use two, 19 use three and 10 rely on four in their most recent reports.
ESG reporting and standard use among TSX 60 companies:
|
Category |
Number |
Notes |
|
Total companies in TSX 60 index |
60 |
Full index size |
|
Companies publishing sustainability reporting |
58 |
Issue some form of sustainability report |
|
Companies referencing specific ESG standards |
56 |
Draw from six different standard sets in total |
|
Companies using 1 standard |
9 |
Refer to a single ESG standard |
|
Companies using 2 standards |
18 |
Mix two ESG standards |
|
Companies using 3 standards |
19 |
Mix three ESG standards |
|
Companies using 4 standards |
10 |
Mix four ESG standards |
“The most widely used standards among TSX 60 companies are the Sustainability Accounting Standards Board (SASB) standards, cited by 51 companies, and the Global Reporting Initiative (GRI), cited by 44,” the authors – Bianca Grohmann, Luo He, Rucsandra Moldovan and Matthäus Tekathen – write.
The Task Force on Climate-related Financial Disclosures (TCFD) is cited by 31 companies, while IFRS S1 and S2 from the International Sustainability Standards Board (ISSB) are referenced by 12. Only two companies mention the European Sustainability Reporting Standards, and two refer to Canadian Sustainability Standards Board (CSSB) standards.
More than half (59%) of Canadian professionals think sustainability should be a top workplace priority, according to a previous report.
Questions on alignment and intent
Concordia’s report says this pattern raises a central question: “Are companies thoughtfully combining complementary standards to give stakeholders a fuller picture, or are they selectively choosing the pieces that suit them best?” The authors conclude: “The answer is likely a bit of both” in Canada’s current regime.
The voluntary nature of ESG reporting in Canada gives issuers broad discretion in choosing which standards to adopt and how closely to follow them. The study notes that this flexibility allows disclosure to be tailored to sector needs and stakeholder expectations but “makes comparability harder for investors, customers and regulators” across the TSX 60.
Concordia’s researchers add that heavy use of SASB and TCFD may mean some firms are closer to global baselines than their wording implies.
“Many firms may already be closer to ISSB alignment than it appears, because SASB and TCFD have been incorporated into the ISSB architecture,” they write. “In other words, companies may be further along the path to harmonisation than their wording suggests.”
Level of adherence
The Concordia analysis finds that how companies describe their use of standards varies significantly. Few state that their ESG reports are prepared “in accordance with” a given framework. More often, issuers say their reporting is prepared “with reference to” a standard or use softer qualifiers such as “guidance”, “recommendations”, “informed by” or “in consideration”.
“In the sample, ‘with reference to’ appears more often than ‘in accordance with’ for both GRI and SASB,” the authors note, pointing out that GRI itself distinguishes adoption levels with these terms. Companies also “rely on looser qualifiers, especially when referring to SASB, TCFD and ISSB”, with “guidance” and “recommendations” among the most common alternatives.
“For business audiences, this distinction is more than semantic,” the Concordia team writes. “‘In accordance with’ suggests a much stronger degree of adherence. ‘With reference to’ signals selective alignment. Softer terms such as ‘guidance’ or ‘informed by’ suggest that a standard shaped the report but did not fully define it.”
Concordia’s researchers describe Canadian ESG reporting as “a work in progress”, with companies “experimenting” and “drawing on multiple sources” as they respond to a shifting regulatory context.
The authors say the main takeaway for issuers is greater clarity on how standards are applied. “For companies, the message is straightforward: be explicit. If your ESG report draws on several standards, explain why. If you are only partially aligned, say so clearly,” the report states.
“Being precise about which standards you use, and how closely you follow them, can strengthen credibility just as much as the choice of standard itself,” the Concordia team concludes. “In a crowded reporting landscape, clarity may be one of the most valuable qualities a report can offer.”
Mounting pressures around ESG requirement compliance could be increasing the risk of ESG fraud, according to a previous KPMG report.
ESG reporting in Canada is fragmented across federal statutes, financial regulator guidance, and securities rules — there isn't a single omnibus law. Here’s an overview of the major ESG reporting laws and frameworks in Canada:
|
Law / framework |
Regulator / government body |
Who It applies to |
Key reporting obligations |
Status & key dates |
Government source |
|
Fighting Against Forced Labour and Child Labour in Supply Chains Act (Bill S‑211 / “Modern Slavery Act”) |
Public Safety Canada (Minister of Public Safety) |
Government institutions and entities listed on a Canadian stock exchange, or with a place of business / doing business / having assets in Canada that meet 2 of 3 size thresholds (≥ CA$20M assets, ≥ CA$40M revenue, ≥ 250 employees), engaged in producing, selling, distributing or importing goods |
Annual public report on steps taken to prevent and reduce the risk of forced or child labour in supply chains; must cover structure, activities, policies, due diligence, training and remediation |
In force January 1, 2024; reports due annually by May 31; fines up to CA$250,000 for non‑compliance |
publicsafety.gc.ca; laws.justice.gc.ca/eng/acts/F-10.6; parl.ca (Bill S‑211) |
|
OSFI Guideline B‑15 – Climate Risk Management |
Office of the Superintendent of Financial Institutions (OSFI) |
All federally regulated financial institutions (FRFIs), including Domestic Systemically Important Banks (D‑SIBs) and Internationally Active Insurance Groups (IAIGs) headquartered in Canada |
Governance and risk management of climate risk; climate‑related financial disclosures aligned with TCFD/ISSB, covering governance, strategy, risk management, metrics, and Scope 1, 2 and 3 GHG emissions |
Effective fiscal year‑end 2024 for D‑SIBs and IAIGs headquartered in Canada, and fiscal year‑end 2025 for all other in‑scope FRFIs; Scope 3 disclosure deadline revised to fiscal year 2028 to align with Canadian Sustainability Standards Board (CSSB) standards |
osfi-bsif.gc.ca – Guideline B‑15 and related updates |
|
Canadian Sustainability Disclosure Standards (CSDS 1 & CSDS 2) |
Canadian Sustainability Standards Board (CSSB), under Financial Reporting & Assurance Standards Canada (FRAS Canada) |
Canadian entities (currently a voluntary baseline); referenced by OSFI and CSA in their rule‑making |
CSDS 1 – general sustainability‑related financial disclosures; CSDS 2 – disclosure of material information on critical climate‑related risks and opportunities; aligned with IFRS S1 / S2 with Canadian transition reliefs |
Released December 18, 2024; effective for annual reporting periods beginning on or after January 1, 2025; voluntary until mandated by a regulatory authority or incorporated into Canadian securities rules |
frascanada.ca/cssb |
|
Competition Act – “Greenwashing” provisions (Bill C‑59 amendments) |
Competition Bureau Canada (and Competition Tribunal) |
Any business making public environmental representations in Canada |
Requires environmental claims about a product to be supported by “adequate and proper testing”, and claims about a business or business activity to be substantiated using an “internationally recognized methodology”; reverse onus on the claim‑maker |
Bill C‑59 passed June 19, 2024 and received Royal Assent June 20, 2024; private right of action before the Competition Tribunal in force June 20, 2025; penalties up to CA$10M for a first offence or 3% of global revenue |
Competition Bureau – greenwashing guidance; Bill C‑59 (parl.ca) |
|
Extractive Sector Transparency Measures Act (ESTMA) |
Natural Resources Canada – Extractive Sector Transparency Office (ESTO) |
Entities engaged in commercial development of oil, gas or minerals in Canada or elsewhere, or controlling such an entity, that are listed in Canada or have a place of business / do business / have assets in Canada and meet 2 of 3 size thresholds |
Annual public report of payments of ≥ CA$100,000 to any government (domestic or foreign) by category (taxes, royalties, fees, production entitlements, bonuses, dividends, infrastructure payments, etc.); reports must remain public for at least 5 years |
In force June 1, 2015; reports due within 150 days of fiscal year‑end |
natural-resources.canada.ca – ESTMA; laws-lois.justice.gc.ca – ESTMA |
|
Standard on the Disclosure of GHG Emissions and the Setting of Reduction Targets (federal procurement) |
Public Services and Procurement Canada (PSPC) and Treasury Board of Canada Secretariat (TBS) |
Suppliers bidding on federal government procurements of goods or services valued at more than CA$25 million |
Disclose GHG emissions (Scope 1, Scope 2 and material Scope 3) and set science‑based reduction targets to participate in qualifying federal procurements |
In force April 1, 2023 |
canada.ca – federal sustainable procurement (program context); standard administered by PSPC/TBS |
|
Canada Business Corporations Act (CBCA) – Diversity Disclosure |
Corporations Canada (Innovation, Science and Economic Development Canada) |
Federally incorporated distributing (publicly traded) corporations under the CBCA |
Annual disclosure to shareholders on diversity of directors and senior management across four designated groups (women, Indigenous peoples, persons with disabilities, members of visible minorities), plus disclosure of any diversity policy |
In force January 1, 2020 |
ised-isde.canada.ca – Corporations Canada diversity disclosure |
|
National Instrument 51‑107 – Disclosure of Climate‑related Matters (PROPOSED, currently paused) |
Canadian Securities Administrators (CSA) |
Reporting issuers under provincial and territorial securities laws (excluding investment funds) |
Would have required TCFD‑aligned climate disclosure (governance, strategy, risk management, metrics and targets, GHG emissions) for issuers on Canadian stock exchanges |
Proposed October 18, 2021; paused as of CSA announcement April 23, 2025; CSA has signalled it will revisit using CSSB standards as a baseline |
securities-administrators.ca – NI 51‑107 consultation and updates |
