1. Mandatory climate disclosure is coming to Canada. The Canadian federal government recently announced plans to amend the Canada Business Corporations Act (CBCA) to introduce mandatory climate-related financial disclosures for large, federally incorporated private companies. This initiative, part of the government’s commitment to sustainable finance outlined in the 2023 Fall Economic Statement and Budget 2024, aims to create a sustainable finance taxonomy that defines “green” and “transition” investments. The amendments will mandate climate-related disclosures, while small- and medium-sized businesses will be encouraged to disclose voluntarily. The government also seeks to align these requirements with existing securities regulations.
In addition, the federal government is developing “Made-in-Canada sustainable investment guidelines,” which will help investors assess which activities and investments contribute to a net-zero economy. These guidelines will apply broadly to various sectors, including electricity, transportation, and manufacturing. The Ontario Securities Commission has also issued a report on its sustainable finance priorities, emphasizing climate-related disclosures, diversity, and governance improvements. The interplay between these initiatives and recent “greenwashing” amendments to the Competition Act remains to be seen.
2. New ISSB standards guide for the non-regulated. Companies can voluntarily apply International Sustainability Standards Board (ISSB) Standards to provide globally comparable sustainability-related disclosures, addressing increasing investor demand for this information. As more jurisdictions adopt sustainability disclosure requirements, ISSB Standards offer a passport, of sorts, for global compliance. To help companies, the IFRS Foundation published the Voluntarily Applying ISSB Standards—A Guide for Preparers, which supports companies in implementing ISSB Standards and communicating progress to investors. The guide highlights transition reliefs, allowing phased implementation, and proportionality mechanisms that account for companies’ varied capabilities. It also notes that companies already using frameworks like TCFD, SASB, and Integrated Reporting are well-positioned to comply with ISSB Standards.
3. Insurers embrace low-carbon transition. A recent BlackRock survey reveals that 99% of insurers have set climate transition objectives for their investment portfolios, with over half aiming for net-zero targets. The survey, which involved 410 senior insurance executives overseeing $27 trillion in assets, highlights the industry’s growing commitment to low-carbon investments. Key objectives include year-on-year emissions reduction targets (52%), minimum allocations to low-carbon strategies (49%), and temperature alignment (22%).
Climate risk management is the top driver for these goals (57%), followed by stakeholder interest (54%), regulatory compliance (47%), and real-world impact (42%). Additionally, 66% of insurers have increased confidence in climate-related investments compared to last year. Top investment areas include transition technologies like batteries and carbon capture (63%), clean energy infrastructure (59%), and natural capital (41%). Insurers plan to boost allocations in impact strategies, emerging markets, and green bonds, positioning themselves as key players in climate transition financing.
4. Volvo first global car maker to measure nature impact. Volvo has developed a nature strategy that focuses on reducing biodiversity impacts across its supply chain, offering insights for other automakers and manufacturers. While it has scaled back its EV sales targets, Volvo remains committed to biodiversity through conservation and restoration efforts. The company uses a lifecycle impact assessment model to measure biodiversity loss, prioritizing areas like fuel production and vehicle use, which account for 64% of its biodiversity impacts. Volvo is also addressing challenges such as the environmental trade-offs of battery production for EVs and has called for a moratorium on deep-sea mining. 34% of biodiversity impacts come from Volvo’s upstream value chain, where the company is working on responsible sourcing, water management, and reducing pollution. Acknowledging that not all impacts can be avoided, Volvo plans to invest in restoration activities directly related to its operations, emphasizing true mitigation rather than philanthropic efforts.
5. The impact of global elections on boardrooms. In 2024, a remarkable 73 countries either will be or have already held federal elections. As the elections unfold, the resulting global political changes are expected to impact the dynamics within boardrooms. We want to hear your thoughts on how these shifts impact board governance globally. Competent Boards invites you to take part in a quick survey aimed at gathering insights from senior business leaders on how these elections affect board governance priorities, board accountability, and regulatory preparedness.
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