Sep 30, 2020
While providing disclosure on the environmental issues they face is becoming a necessary exercise for Canadian companies hoping to attract investment, the level and extent of disclosure has yet to be standardized, rendering that exercise complex and often frustrating – for companies and investors alike. Though companies are certainly producing the required reports, the lack of consistency is casting doubt on the usefulness of the information provided. In a recent feature article in The Globe and Mail, journalists Jeffrey Jones, David Milstead, Mark Rendell and Kathryn Blaze Baum take a deep dive into the topic of climate risk disclosure, including the broader subject of Environmental, Social and Governance (ESG) reporting which is becoming increasingly relevant. As the authors point out, good disclosure is critical to corporations convincing investors that they are acting responsibly and mitigating their exposure to future risks.
One of the many experts the authors consulted in developing the content for this lengthy article is Osler partner, Andrew MacDougall. An expert in corporate climate-risk reporting, Andrew explains that one of the biggest difficulties that companies are facing is what to provide disclosure about.
“When we have conversation[s] with our clients,” Andrew says, “that’s the hardest challenge because you do have a variety of reporting standards that are out there that look for quite a bit of information. And they don’t all take the same approach in terms of reporting.”
The authors go on to explore the various disclosure standards that companies are currently using as well as institutional investors’ assessment of the quality of the disclosure they’re receiving. Ultimately, the article suggests, government regulation may put an end to the inconsistencies.
If you have a subscription to The Globe and Mail, you can learn more by reading the full article “Despite avalanche of corporate reports on climate change, investors still can’t tell who’s helping and who isn’t” published on September 26, 2020.