Transforming sustainability

It’s 2026, and we’re still in the ‘messy middle’ when it comes to sustainability reporting in Canada.

There’s no question that sustainability reporting matters to stakeholders. In fact, 81% of Canadian respondents to our Global Investor Survey 2025 said sustainability reporting positively influences investor engagement, while 72% said it has a positive effect on access to—or the cost of— capital for businesses.

Yet regulatory momentum remains uneven. In 2025, the Office of the Superintendent of Financial Institutions’ (OSFI) Guideline B-15—which requires federally regulated pensions, insurers, and banks to report on their climate risks and opportunities—drove action among affected financial institutions. At the same time, the Canadian Securities Administrators (CSA) paused work on mandatory climate risk and diversity disclosure rules for public companies amid shifting economic dynamics with the US, including the implications of evolving US tariff policies.

In the 2025 federal budget, we also saw a notable pivot in the federal government’s regulatory approach towards addressing misleading environmental and sustainability claims. After businesses pulled back on voluntary sustainability reporting following the stricter greenwashing rules introduced in Bill C-59, the government announced plans to amend the Competition Act to recalibrate the rules while still protecting against false or misleading environmental benefit claims.

Other jurisdictions have also moved in different directions on mandatory sustainability reporting, with some advancing their efforts and others pausing or reconsidering them. For example, in 2025 the EU provided clarity on reporting related to its Corporate Sustainability Reporting Directive (CSRD), while the Securities and Exchange Commission (SEC) in the US voted to end its defence of its climate disclosure rules.

Overall, we continue to see convergence towards the adoption of the International Sustainability Standards Board’s (ISSB) guidance on sustainability and climate change disclosures. At the IFRS Sustainability Symposium 2025, the IFRS Foundation reported that nearly 40 jurisdictions, representing close to 60% of global GDP, are adopting or otherwise using the standards.

Sustainability that works

We embed sustainability into strategy so you can fuel gains, not just goals.

Make sense of sustainability

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Rules change. Keep your focus on value creation.

When there’s so much on your plate, it can be easy to overlook sustainability reporting, especially if it isn’t mandatory. But sustainability reporting is far more than a compliance exercise. When done well, it can help you make better, more strategic business decisions based on credible evidence and reliable data. In turn, this can help you create a competitive advantage, build trust with your stakeholders, and position your organization for future success.

By understanding what your stakeholders want, you can align your sustainability strategy and activities to create value—for them and for your business. As you consider your path forward, think about the needs of your key stakeholder groups, including:

Investors and lenders

In a global survey conducted by Business at OECD, 72% of respondents identified institutional investors, asset managers, and banks as the primary audience for their ESG reporting. This mirrors what we’re seeing in Canada, where investors and lenders are increasingly asking the businesses they work with to provide sustainability information.

For some, the need is driven by regulatory requirements. OSFI Guideline B-15 requires federally regulated pensions, insurers, and banks to report on their climate-related risks and opportunities, including Scope 3 emissions—which include the emissions of the companies they finance. As Scope 3 emissions are these institutions’ most material category of emissions, they will be asking the companies they finance to provide their Scope 1 and Scope 2 emissions so that they can calculate their own Scope 3 results for reporting purposes.

For others, it’s part of stronger risk management. Many investors and lenders are now assessing sustainability factors when determining creditworthiness or calculating risk-adjusted returns—often relying on estimates and proxies, including using data and research from ESG ratings providers when precise data isn’t available.

Providing accurate, decision-ready sustainability information can give you a competitive advantage when seeking financing—that’s because you know your business best and can provide narrative context for your sustainability data by providing it within your sustainability report. In fact, our Global Investor Survey 2025 found that 66% of Canadian respondents would moderately or significantly increase their investment in companies that use sustainability data to improve efficiency and performance.

Customers and suppliers in your value chain

While your company might not be directly affected by mandatory sustainability reporting regulations, customers downstream in your value chain might be. For instance, if you serve customers in the EU that are required to report on Scope 3 emissions (i.e. indirect greenhouse gas emissions occurring in a company’s value chain), they’ll turn to you for the data they need—and you’ll need to be ready to provide it. Even when reporting isn’t mandatory, we’re seeing more companies requesting sustainability information from their suppliers to meet their own stakeholder expectations or to support sustainable procurement initiatives.

Proactively identifying and responding to your customers’ changing expectations regarding sustainability—whether they consider it a basic requirement or a significant factor in their decision making—will help you safeguard your competitive position and capture new revenue opportunities.

At the same time, suppliers upstream in your value chain present an opportunity to prioritize working with businesses whose sustainability goals align with your own. By engaging them in your sustainability reporting efforts, you can advance your objectives (e.g. decarbonization goals, the elimination of child labour in your supply chains), while strengthening your due diligence and improving visibility into the material impacts and risks within your sector.

Employees

Employees—both current and prospective—want to work for companies that share their values. They’ve watched the shifts happening in the US around sustainability and diversity and inclusion, and they’re increasingly asking what Canadian companies are doing in these areas.

The data suggests the answer is: not enough. According to the 2025 Edelman Trust Barometer, 62% of Canadians believe businesses aren’t going far enough to address climate change. The same proportion say businesses aren’t doing enough to tackle misinformation, and 53% feel they aren’t doing enough to address discrimination.

This is an important signal to consider as you think about your recruitment and retention efforts—because it matters. In our Global Workforce ESG Preferences Study 2024, 75% of workers said a company’s overall societal impact was important when choosing an employer, while 68% cited environmental policies and practices were important. To stay with an employer, 70% and 65% respectively said these factors mattered.

If you want to attract and retain people with the future-ready skills your organization needs to thrive in a rapidly changing and uncertain business environment, you need to show that you’re listening, responding, and taking meaningful action on the issues that are important to them. Sustainability reporting gives you a transparent, credible way to demonstrate your commitment and the progress you’re making.

Regulators

Sustainability regulations are shifting quickly, as shown by the moves by OSFI and the CSA in 2025. And while staying on top of Canadian regulatory changes is essential, if you’re operating globally—or plan to—you also need to be aware of what’s happening across the jurisdictions where you do business.

In some cases, you may fall directly within scope of new or evolving rules. For example, the EU’s CSRD applies to Canadian companies with securities listed on an EU-regulated market (e.g. through a dual listing), if they have an EU branch or subsidiary of a certain size. But in its 2025 ‘Omnibus’ package, the European Commission moved to simplify European Sustainability Reporting Standards (ESRS). This was followed by technical advice on changes from the European Financial Reporting Advisory Group. By mid-2026, these changes are expected to be adopted. That means now’s the time to check whether your company is in scope and what that means from a reporting standpoint.

Drive more value from your sustainability efforts

Canada adopted global financial accounting and reporting standards in 2010—and businesses adapted. Many used the need to strengthen their financial systems and processes to improve decision making, uncover new opportunities for value creation, and build trust with stakeholders and investors.

Today, sustainability accounting and reporting is experiencing a similar evolution. Canadian companies are working to make their sustainability approach more sophisticated, embedding it into their operations and infrastructure so it becomes part of their DNA.

While this maturation is encouraging, some organizations still struggle with how to turn sustainability into tangible business outcomes. Three key activities we often see businesses struggle with include:

Integrating sustainability into corporate strategy to create value

Many Canadian companies recognize that they need to link their sustainability initiatives more meaningfully to their corporate strategy to create business value. Figuring out how to do so isn’t as easy.

We’ve seen significant progress in recent years, particularly with companies integrating sustainability risks into their enterprise risk management processes. But that’s just the start. Tying sustainability action fully to corporate strategy means assessing activities through a financial materiality lens—and then connecting activities back to strategic priorities and KPIs to understand how sustainability opportunities and risks could help or hinder achievement of those goals.

That’s why reporting aligned with the ISSB standards is a no regrets move for Canadian companies evaluating their approach to sustainability reporting in the current environment. The standards offer a proven framework for evaluating financial materiality in ways that resonate with investors and lenders and support clearer value creation.

To drive business value from sustainability, you need to be able to show how your initiatives are contributing to your corporate governance and strategy, goals and priorities, financial outcomes, and risk management—and you need to do it in ways that your stakeholders can trust.

Enhancing data quality, completeness, and timeliness

Many companies are finding it challenging to manage the time and resources needed to collect the data required for sustainability reporting—especially when they’re working with multiple frameworks designed for different stakeholder needs. And because most still rely on Excel-based tools to gather data, they face real risks: human input errors, inconsistent data, and—in some cases—gaps that leave reporting incomplete.

Recently, we’ve seen organizations looking at AI-enabled technology solutions to streamline data management, reduce resource requirements, and enhance the accuracy and timeliness of their reporting. Some are already moving to platforms that help track, measure, and report sustainability information in ways that are auditable and transparent—and that support internal controls that prove information is accurate.

These capabilities enhance reporting, strengthen stakeholder trust, and make it easier to integrate sustainability into corporate strategy, while also freeing resources to focus on strategic issues rather than on manual data collection. Trusted data collection also gives management teams more accurate and timely performance data, which they can use to make data-driven sustainability decisions and drive value creation.

To be able to use your sustainability data, you need to have confidence in it—and you need to be able to access it in a timely manner to drive better decision making.

Quantifying the financial effects of sustainability initiatives

Historically, the challenges associated with data collection have made it difficult for many Canadian companies to quantify the financial effects of risks and opportunities related to sustainability, such as the return on investment payback period for particular initiatives or the financial impacts of undertaking, or choosing not to undertake, specific sustainability actions and capital investments—whether required by regulation or not. As a result, many companies have struggled with communicating the full value of their sustainability initiatives.

Tying sustainability initiatives to financial materiality and corporate strategy—and using technology to gather complete, accurate, reliable, and timely data—can make assessing financial and strategic impacts less complicated. This can, in turn, help companies better understand the value of sustainability beyond regulatory compliance, build quantifiable business cases for future sustainability initiatives, and become more consistent in thinking about sustainability like any other material business issue.

As sustainability reporting matures, your organization needs to be able to quantify the financial impacts of your sustainability initiatives because that’s what your stakeholders—particularly your investors—care about.

Make sustainability reporting your advantage

As sustainability reporting in Canada enters a new era—one defined by the ability of sustainability activities to create value—you’re probably wondering how you can make that happen, especially given the uncertain economic and trade environment and the need to get the most out of every dollar that you spend.

Here are three things you can do to better communicate the value of your sustainability activities through your sustainability reporting.

Conducting a materiality assessment can help you narrow your sustainability focus to prioritize the sustainability issues that best align with your corporate strategy and the needs of your stakeholders while creating real, quantifiable value for your business.

How can you do this? Start by identifying the full range of sustainability topics that could matter to your stakeholders—whether they’re regulators, investors and lenders, customers and supply chain partners, corporate executives and board members, employees, or others. Then engage with those stakeholders to better understand which issues they see as most important. This will help you narrow your long list to the sustainability topics that truly matter to your business.

Once you’ve developed a short list, map the related risks and opportunities across your value chain to determine which topics are most material to your organization by evaluating the impacts, risks, and opportunities. These material topics can then be embedded into your strategic plans and KPIs and reflected in your sustainability reporting so that you can drive business value while also meeting the expectations of your stakeholders.

To clearly communicate the value and impact of your sustainability initiatives—and to give your management team and Board timely, accurate data they can use to make better strategic business decisions—your sustainability reporting needs to be grounded in trusted data that you and your stakeholders can rely on.

This starts with getting your data house in order. Identify where your sustainability data currently lives, how it’s being pulled or collected, and where gaps exist between the data you have and the data you need to report on your material sustainability topics. From there, focus on closing any gaps so that you can enhance the quality and usefulness of your sustainability reporting.

As a part of this effort, look for opportunities to use technology to strengthen your approach. For example, applying AI to help turn complex data into actional insights or to streamline and improve the efficiency and timeliness of your reporting processes.

In Canada—and globally—there is growing concern about corporate greenwashing and data quality. One way to combat this is to obtain third-party assurance of your sustainability activities and reporting processes.

Independent verification by trusted external auditors provides your stakeholders—particularly your investors and customers, but also relevant industry regulators and the public—with confidence that your disclosures are accurate, complete, and can be trusted. Companies have long sought assurance over selected sustainability metrics and disclosures. What’s changing now is the scale: more organizations are expanding the scope of assurance across a broader set of sustainability information. In some cases, we’re also seeing companies obtaining assurance over their entire report to align with emerging regulatory requirements such as the CSRD.

Beyond building trust, obtaining third-party assurance of your sustainability reports can help you identify gaps in your data collection and reporting processes and continuously improve your reporting practices. As a result, your organization will be well-positioned to drive value from your sustainability efforts in the years ahead.

Be prepared. Be ready. Be confident.

It’s an uncertain world out there. You need every action you take and every decision you make to create value for your organization or for your stakeholders—including all of your sustainability activities.

While you might not be required to report on your sustainability initiatives yet, now’s the time to start looking at how you can turn sustainability reporting into a competitive advantage by driving business value, building trust with your internal and external stakeholders, and making sure your organization is well-positioned for the future—whatever comes.

Transforming sustainability into business value

Sustainability that works

Make sense of sustainability