Last updated: May 27, 2026. Sustainability reporting in Canada is moving through a standards-and-regulation transition. Canada now has Canadian Sustainability Disclosure Standards, or CSDS 1 and CSDS 2, based on the ISSB standards. But those standards are voluntary unless a regulator, lender, investor, customer, or other requirement makes them part of a company's reporting obligation.
Short answer: Canada does not currently have one mandatory sustainability report rule for every company. CSDS 1 and CSDS 2 are available for voluntary use for annual reporting periods beginning on or after January 1, 2025. The Canadian Securities Administrators paused work on a new mandatory climate-related disclosure rule on April 23, 2025, so there is not yet a new CSA climate disclosure rule requiring all reporting issuers to report under CSDS. However, Canadian issuers still need to disclose material climate-related risks under existing securities disclosure obligations. Separately, federally regulated financial institutions are subject to OSFI Guideline B-15, certain entities must report under Canada's forced labour and child labour supply-chain law, and businesses making environmental claims need proper evidence under the Competition Act.
Who needs to report sustainability information in Canada?
The answer depends on the type of entity and the trigger for reporting. In practice, Canadian sustainability reporting can come from several routes:
- public-company securities disclosure, including disclosure of material climate-related risks where material to investors;
- voluntary CSDS 1 and CSDS 2 reporting, especially for companies preparing for future investor, lender, or regulator expectations;
- OSFI Guideline B-15 for federally regulated financial institutions such as banks and insurers;
- the Fighting Against Forced Labour and Child Labour in Supply Chains Act for covered entities and government institutions;
- corporate diversity disclosure requirements for certain federally incorporated distributing corporations and reporting issuers;
- environmental-claim substantiation under the Competition Act when sustainability or climate claims are used in marketing or business communications;
- customer, supplier, lender, investor, parent-company, or tender requirements; and
- non-Canadian requirements, such as CSRD, California climate rules, or customer-specific supplier reporting, where a Canadian company has relevant exposure.
For many Canadian companies, the practical question is not simply "Is CSDS mandatory?" It is whether a customer, bank, investor, public procurement process, parent company, or foreign-market requirement is asking for credible emissions data, climate-risk information, supply-chain evidence, or sustainability disclosures.
Canadian Sustainability Disclosure Standards
The Canadian Sustainability Standards Board finalized CSDS 1 and CSDS 2 on December 18, 2024. CSDS 1 is the general standard for sustainability-related financial disclosures. CSDS 2 is the climate-related disclosure standard. They are based on IFRS S1 and IFRS S2, with Canadian modifications and transition reliefs.
CSDS 1 asks companies to disclose material information about sustainability-related risks and opportunities that could reasonably be expected to affect the company's prospects. The structure follows the same broad architecture as ISSB reporting: governance, strategy, risk management, and metrics and targets.
CSDS 2 focuses on climate-related risks and opportunities. It asks for climate disclosures across governance, strategy, risk management, metrics and targets, greenhouse gas emissions, climate resilience, transition planning where relevant, and industry-based metrics where applicable.
The standards are effective for annual reporting periods beginning on or after January 1, 2025 for entities that choose to apply them. That effective date does not by itself make CSDS mandatory. Mandatory reporting depends on whether a regulator incorporates the standards into law or rule, or whether a company chooses or is contractually required to use them.
What happened to the CSA climate disclosure rule?
The Canadian Securities Administrators had been developing a mandatory climate-related disclosure rule for Canadian reporting issuers. That project was expected to take account of the finalized CSDS standards. On April 23, 2025, the CSA announced that it was pausing work on the development of a new mandatory climate-related disclosure rule and related diversity-disclosure amendments.
This means companies should not describe CSDS reporting as generally mandatory for Canadian public companies today. At the same time, the CSA emphasized that climate-related risks remain a mainstream business issue and that securities legislation already requires issuers to disclose material climate-related risks in the same way they disclose other material information.
For reporting issuers, the practical implication is that climate disclosure has not disappeared. The new dedicated CSA rule is paused, but existing continuous disclosure obligations, investor expectations, lender requirements, and voluntary CSDS readiness still matter.
OSFI Guideline B-15 for financial institutions
Federally regulated financial institutions, or FRFIs, have a separate climate-risk management and disclosure path under OSFI Guideline B-15. The guideline sets expectations for governance, risk management, scenario analysis, capital and liquidity considerations, and climate-related financial disclosures.
OSFI's B-15 timing is already operative for in-scope institutions. The guideline is effective at fiscal year-end 2024 for domestic systemically important banks and internationally active insurance groups headquartered in Canada, and at fiscal year-end 2025 for other in-scope FRFIs. OSFI updated B-15 in March 2025 to align more closely with the final CSSB standards.
OSFI also adjusted Scope 3 timing. Its February 2025 letter and updated B-15 materials explain that the implementation date to disclose Scope 3 GHG emissions is fiscal year-end 2028, with the off-balance-sheet component of assets under management moving to fiscal year 2029. Banks, insurers, trust and loan companies, and other in-scope FRFIs should treat B-15 as a live regulatory workstream rather than a voluntary reporting choice.
Supply-chain reporting under S-211
Canada's Fighting Against Forced Labour and Child Labour in Supply Chains Act came into force on January 1, 2024. It is not a climate disclosure rule, but it is an important sustainability-related reporting obligation for companies with goods-related activities.
The Act requires covered government institutions and entities to report on the steps taken during the previous financial year to prevent and reduce the risk that forced labour or child labour is used in their activities and supply chains. Reports are due on or before May 31 each year.
For entities, the reporting obligation can apply to companies producing, selling, or distributing goods in Canada or elsewhere, importing goods into Canada, or controlling another entity that does those activities, where the entity is listed on a Canadian stock exchange or meets the Act's business-presence and size-threshold tests. Companies should confirm applicability carefully because the reporting trigger is tied to goods and supply-chain activity, not simply to whether the business thinks of itself as a sustainability reporter.
Environmental claims and greenwashing risk
Canada's Competition Act also matters for sustainability reporting because public reports, website claims, product claims, and investor or customer materials can create environmental claims. The Competition Bureau released final environmental-claims guidance on June 5, 2025. The guidance explains that environmental claims must not be false or misleading and must be properly substantiated where required.
As of March 26, 2026, federal amendments removed the requirement that certain business or business-activity environmental claims be supported by an internationally recognized methodology. That does not remove the need for evidence. Companies should still keep support for claims such as net zero, carbon neutral, low carbon, sustainable, recyclable, renewable, emissions reduced, or climate aligned. A sustainability report should be written with the same evidence discipline as external marketing and sales materials.
What companies should prepare
Canadian companies should build a reporting process around the actual trigger. A public issuer preparing investor disclosure, a bank preparing OSFI B-15 disclosures, a manufacturer filing an S-211 report, and a supplier responding to a customer questionnaire do not need the same project. They do, however, often need similar data foundations.
A practical readiness plan usually includes:
- confirming whether the trigger is CSDS voluntary reporting, securities disclosure, OSFI B-15, S-211, environmental claims, customer requests, lender requests, or foreign-market exposure;
- mapping the reporting boundary, legal entities, Canadian operations, subsidiaries, products, services, and supply-chain activities;
- assigning owners across finance, legal, risk, operations, facilities, procurement, HR, sustainability, investor relations, and company secretarial teams;
- collecting Scope 1 and Scope 2 data, including fuel, refrigerants, electricity, steam, heating, cooling, renewable-energy instruments, and landlord or site data where relevant;
- screening Scope 3 categories, including purchased goods and services, capital goods, logistics, business travel, employee commuting, waste, investments, financed emissions, leased assets, and use of sold products;
- documenting emission factors, calculation methods, organisational boundaries, operational boundaries, exclusions, assumptions, data limitations, controls, and evidence files;
- building climate-risk and opportunity registers across physical risk, transition risk, policy risk, market risk, technology risk, legal risk, and reputational risk;
- tracking supply-chain due diligence evidence for forced labour and child labour reporting where relevant;
- reviewing environmental claims before publication to ensure they are supported by evidence; and
- preparing board, management, and review processes that can support future assurance or regulator scrutiny.
What if you are a supplier or private company?
A Canadian supplier may not be directly required to report under CSDS or an OSFI rule, but it may still be asked for sustainability data. Enterprise customers, listed companies, banks, private equity firms, public-sector buyers, and multinational parent companies increasingly need supplier information for Scope 3 emissions, climate-risk analysis, procurement due diligence, modern-slavery reporting, ESG ratings, and tender requirements.
The first step is to interpret the actual request. A buyer may be asking for a GHG inventory, energy-use data, supplier emissions factors, renewable electricity evidence, S-211-style supply-chain information, an EcoVadis or CDP response, environmental-claims evidence, or a short customer-ready statement. Keslio's supplier request support helps turn that request into a focused response rather than a broad ESG project.
Common mistakes to avoid
- Calling CSDS mandatory for all Canadian companies. CSDS is available for voluntary use unless a regulator or other requirement makes it mandatory for a specific entity.
- Assuming the CSA pause means climate disclosure no longer matters. Existing securities law still requires material climate-risk disclosure where material, and investors may expect CSDS-style information.
- Mixing up public issuer rules and OSFI B-15. FRFIs have a separate live OSFI pathway with its own timing and expectations.
- Ignoring S-211 because it is not climate-related. Forced labour and child labour reporting is a current sustainability-related reporting obligation for covered goods-related entities.
- Publishing environmental claims without evidence. Sustainability reports, websites, proposals, and customer responses should all be backed by supportable data and methodology notes.
- Leaving Scope 3 until a rule becomes mandatory. Scope 3 data often takes the longest because it depends on supplier, customer, finance, logistics, procurement, and investment data.
How Keslio can help
Keslio helps companies turn Canadian sustainability reporting requirements into practical workstreams, data requests, calculations, and report content. For Canada, this can include:
- applicability checks across CSDS voluntary reporting, securities disclosure, OSFI B-15, S-211, environmental claims, and supplier requests;
- GHG emissions calculations for Scope 1, Scope 2, and relevant Scope 3 categories;
- data request templates and evidence trackers for finance, operations, facilities, procurement, HR, logistics, investment, and legal teams;
- CSDS-style gap reviews covering governance, strategy, risk management, metrics, and targets;
- methodology notes for boundaries, emission factors, exclusions, assumptions, and data limitations;
- supplier, customer, lender, or investor response packs;
- sustainability reporting and communications for voluntary sustainability reports, board packs, customer-ready disclosures, and evidence-backed claims; and
- supplier request support where the reporting trigger comes from a customer, buyer, lender, investor, or parent company.
This guide is not legal advice. If your company is determining formal securities-law obligations, OSFI applicability, S-211 reporting status, Competition Act risk, exemption eligibility, or interpretation of Canadian law, legal counsel, auditors, company secretarial advisers, or the relevant regulator should confirm the obligation while Keslio supports the ESG data, calculations, reporting, and evidence workstream.
Sources and further reading
- CPA Ontario overview of Canadian Sustainability Disclosure Standards
- FRAS Canada consultation background on CSDS 1 and CSDS 2
- CSA announcement pausing climate-related and diversity-related disclosure projects
- OSFI Guideline B-15: Climate Risk Management
- OSFI letter updating B-15 for final CSSB standards
- Fighting Against Forced Labour and Child Labour in Supply Chains Act
- Public Safety Canada 2025 Supply Chains Act annual report
- Competition Bureau guidance on environmental claims and the Competition Act
- Government of Canada announcement on sustainable investment guidelines and private-company climate disclosures
