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Sustainability

Climate Week NYC: What CPAs need to know

CPA Canada was representing the profession and taking part in the sustainability discussion with the world-community at the recent Climate in New York.

Sustainability will be core to a CPA’s role in the future, from the implementation of sustainability disclosure standards to the performance of assurance engagements over these disclosures.  

Pamela Steer, president and CEO of CPA Canada, took centre-stage at one of the top eight events among hundreds at Climate Week NYC, sharing the unique factors that distinguish Canada’s capital markets and could influence how sustainability standards are adopted and implemented here.  

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Climate Week NYC brought together leaders in business, politics, and civil society from across the world to drive climate action. The conference was hosted by Climate Group in partnership with the United Nations General Assembly.  

CPA Canada at Climate Week 

CPA Canada’s Steer shared her views as a panelist for an engaging session on reporting perspectives at the “Accelerating Climate & Sustainability-related Disclosures: A Global Perspective” event presented by the International Federation of Accountants (IFAC), the IFRS Foundation, and the International Organization of Securities Commissions (IOSCO).   

With the recent exposure of the Canadian Sustainability Standards Boards first two standards (CSDS 1 and CSDS 2), factors distinguishing the Canadian market that could influence how sustainability standards are adopted and implemented in Canada include: 

  • The need for proportionality and reducing reporting burden – this is especially important given that small and medium sized companies comprise a significant portion of the Canadian economy.  
  • The importance of balancing sustainability objectives with economic realities, given Canada’s diverse, resource-rich ecosystems and a large natural resource sector.  
  • Integration of Indigenous knowledge and participation in the standard setting process to shape how the CSSB tailors the Canadian Sustainability Disclosure Standards.  
  • Acknowledgment of our country’s proximity and close ties to the U.S. There is a need to ensure that the Canadian standards are flexible enough to accommodate the needs of Canadian industries while remaining comparable with global counterparts.  
  • Working with the decentralized regulatory framework we have with provinces and territories holding authority over securities regulation, which means bodies like the Canadian Securities Administrators (CSA) have a vital role to play in coordinating harmonized regulations for sustainability discourses. 

“I commend the CSSB for its leadership and ambition in advancing the sustainability reporting landscape here in Canada,” says Steer. “It has laid a solid foundation with its first two standards expected be issued by the end of this year. We are eagerly awaiting the consultation from the securities regulators in the new year on their climate-related disclosure rule, which will establish the scope and timing of regulation for reporting issuers in Canada.” 

With hundreds of dialogues taking place amongst thought-leaders and decision-makers on important climate-focused topics across the New York City over the week-long conference, here are four key takeaways CPAs should know about:  

Guidance released on voluntary adoption of the ISSB standards 

With efforts underway by regulators in many jurisdictions to require companies to use the ISSB standards, or locally developed standards that are based on this global baseline, the IFRS Foundation has noted that investors across the world are calling on companies to voluntarily apply the ISSB standards to delivery comparable, decision-useful information. To help answer these calls the IFRS Foundation released a guide for preparers on voluntarily applying the ISSB standards which aims to support companies as they begin to apply the standards, and highlights transition reliefs and proportionality mechanisms that are built into the standards. 

CPA Canada is a proud capacity building partner in the IFRS Foundation’s Partnership Framework which is designed to support preparers, investors and other capital market stakeholders as they get ready to use the standards. Visit CPA Canada’s ISSB: Resource and guidance webpage for our latest publications.  

New task force on social disclosures launched  

The Taskforce on Inequality and Social-related Financial Disclosures (TISFD), the newest taskforce on the scene, is a global initiative to develop recommendations and guidance for businesses and financial institutions to understand and report on impacts, dependencies, risks, and opportunities related to people. The aim of the TISFD is to incentivize business and financial practices that create fairer, stronger societies and economies.  

If you are new to the topic of social disclosures, CPA Canada’s The Rise of the Social Pillar: An Introduction to the ‘S’ in ESG is a practical resource for CPAs and other business professionals to develop their foundational knowledge in this area.  

A whole day committed to voluntary carbon markets (VCMs) 

The inaugural VCM day held on September 25th included leading organizations in this space – the Integrity Council for the Voluntary Carbon Market (ICVCM), the Global Carbon Market Utility (GCMU), and the Voluntary Carbon Markets Integrity Initiative (VCMI). The event brought together corporate executives, government ministers and senior officials, investors, Indigenous Peoples and local communities, civil society, project developers, and specialists to discuss the critical role of VCMs in delivering on the goals of the Paris Agreement.  

While VCMs have the potential to advance climate action by providing an avenue for organizations to offset their hard-to-abate greenhouse gas emissions, concerns about quality and integrity remain, and more work needs to be done to effectively leverage these markets. CPA Canada’s series on VCMs, developed in collaboration with IFAC and the Institute for Sustainable Finance, takes a deep dive into these markets and their challenges. The series provide guidance in applying due diligence to decisions regarding VCMs and enhancing understanding of the potential for carbon markets as part of the infrastructure needed to support a sustainable transition.  

Looking ahead to COP 29

The dialogues and developments at Climate Week NYC have undoubtably laid a strong foundation for those that will follow at COP 29, the UN Climate Change Conference being held November 11-22, 2024 in Baku, Azerbaijan. COP 29 President-Designate has named the two mutually reinforcing pillars of the presidency’s vision to be enhancing ambition and enabling action.   

With close to a decade having past since the signing of the Paris Agreement at COP 21 in 2015, COP 29 is being called the “finance COP” expecting a focus on scaling up all country’s climate ambitions and finding the funds to pay for them. Countries will also discuss how to regulate carbon credits. Stay tuned for further updates.