2024 Canadian ESG Reporting Insights

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  • Report
  • 6 minute read
  • November 20, 2023

Our analysis of the sustainability reports from Canada’s top companies found few organizations ready for mandatory ESG reporting standards.

The sustainability reporting pressures on Canadian companies are becoming even more demanding and complex. Rising stakeholder expectations have led to prescriptive regulations replacing voluntary guidelines. What’s more, many organizations that operate in multiple jurisdictions are now finding themselves subject to numerous environmental, social and governance (ESG) reporting frameworks.

Here in Canada, corporate sustainability reporting is becoming more sophisticated. But companies’ ESG reports are still falling short of what’s required to meet these new regulatory requirements, including the evolving climate change risk disclosure expectations of stakeholders.

To better understand the readiness of Canadian companies, we undertook an extensive analysis of the public disclosures of more than 250 of Canada’s largest businesses, based on market capitalization and revenue. Our exclusive benchmarking exercise explores how companies incorporate strategy, materiality, metrics, targets and other factors into their ESG reporting.

The gaps we identified go beyond compliance risks. Businesses that can’t answer questions from customers and investors about how they manage their material ESG risks and opportunities in a satisfactory manner—and are unable to produce trusted data to support their narrative—may lose market share and access to financing.

ESG reporting is an output of a company’s integrated corporate and sustainability strategy. Done right, it’s also a powerful input.

It can inform internal decisions and give companies a strategic advantage by helping them improve their operational performance and increase their long-term enterprise value.

Close the gaps in your sustainability disclosures

Read our framework for building trusted ESG reporting

While “ESG” as a term has gained traction in recent years, “sustainability” is more familiar for some readers. We respect that the terms have different meanings. “ESG” is technically a subset of sustainability referring to factors relevant for enterprise value. “Sustainability” tends to encompass information relevant to all stakeholders. We’ve used both terms in our report to reflect how the wider business community speaks about the subject.

ESG compliance Are Canadian companies ready for new ESG standards and reporting regulations?


don’t mention TCFD or only include a limited narrative


don’t discuss their material issues


don’t financially quantify their climate-related risks

Many Canadian companies must soon file ESG disclosures under multiple ESG standards. These include the Corporate Sustainability Reporting Directive (CSRD) in Europe, which requires businesses to publish their first report in their 2025 fiscal year, and California’s climate disclosure rules, which mandate reporting beginning in 2026 on 2025 information. Additionally, the Canadian Sustainability Standards Board (CSSB) is reviewing the International Sustainability Standards Board (ISSB) global baseline for use in Canada,1 while the Canadian Securities Administrators (CSA) is considering whether—and over what time frame—these standards should be mandated.

These standards align with the four pillars of the Task Force on Climate-related Financial Disclosures (TCFD)—governance, strategy, risk management, and metrics and targets. But 38% of the companies in our analysis don’t mention TCFD or only include a limited narrative around its four pillars.

A similar number of companies (31%) don’t include a discussion of their material issues.

A comprehensive materiality assessment is a fundamental part of ESG reporting that helps companies prioritize sustainability issues, increase transparency and build stakeholder trust.

Investors in particular want to understand a company’s unique material topics, which will vary across industries (and even between companies within the same industry). Regulators and standard-setters have taken notice: ISSB, CSRD and other ESG reporting frameworks all require companies to consider materiality in various ways.

Elsewhere in our analysis, we found other gaps that Canadian companies must close to meet new ESG reporting standards. For example, the ISSB requires companies to disclose quantitative information on how sustainability-related risks and opportunities affect their current and future financial position and performance. Yet in our analysis, 81% of companies don’t financially quantify climate-related risks in their reporting.

Climate and nature reporting Do Canadian disclosures meet stakeholder expectations?


disclose scope three emissions


undertake a quantitative climate scenario analysis


disclose the business impact of their nature-related dependencies, risks and opportunities

New requirements for climate-related disclosures stem from rising stakeholder expectations. Our research shows investors care about companies’ exposure to climate risks. But many say they want more quantitative climate information companies.

Our analysis uncovered encouraging signs. More than three-quarters (78%) of companies disclose information about emissions from their own operations (scope one and scope two emissions). But only 47% also disclose the emissions from their supply chain (scope three emissions)—an ISSB requirement.

We saw similar trends when we looked at the use of climate-scenario analyses, which is also required under ISSB and helps organizations consider a broader range of assumptions, uncertainties and potential future states. Nearly half of companies (49%) undertake this analysis in at least qualitative terms. But only 19% completed a quantitative analysis—a critical step to tell your stakeholders about the financial implications of climate change on your business.

Elsewhere, the need to take action on nature and biodiversity is moving up the business agenda.

Stakeholders recognize that most companies depend on nature and want information on how they protect the water, land and biodiversity of the regions in which they operate. New reporting standards emerged in September 2023 with the release of the Taskforce on Nature-related Financial Disclosures (TNFD) recommendations for nature-related risk management and disclosures. But this remains a nascent area of ESG reporting for many Canadian organizations: just 6% of companies in our analysis mentioned TNFD in their disclosures. And only 7% disclosed the business impact of their nature-related dependencies, risks, opportunities and impacts.

Trusted, investor-grade ESG reporting Benchmarking Canadian companies’ sustainability disclosures

Producing trusted ESG reporting that meets stakeholders’ climate expectations and new regulatory standards involves assessing your material topics. It also requires pinpointing the related risks and opportunities, and producing metrics and targets that show how you manage those risks and opportunities.

Below, we highlight several findings from our analysis to benchmark Canadian companies’ reporting against specific characteristics of trusted, investor-grade ESG reporting.

73% of companies don’t fully disclose how they’ve analyzed and incorporated ESG issues into their long-term strategy

Why it matters: ESG reports should show your performance against specific ESG initiatives and commitments that connect to your enterprise strategy and management of sustainability-related risks and opportunities. Establishing this connection lets you create business and stakeholder value from your integrated strategy and then communicate it through your sustainability reporting.

79% of companies only give a limited explanation (or none at all) of their process to identify material ESG issues

Why it matters: ESG encompasses a broad range of issues. A proper materiality assessment that prioritizes and engages stakeholders is essential to pinpoint the sustainability areas that matter most to your business. It helps you meet your stakeholders’ expectations and zero in on your organization’s most significant sustainability risks and opportunities. Without it, companies can dilute the value of their ESG initiatives and reporting through unnecessarily long and unfocused disclosures.

48% of companies don’t disclose a strategy for any of their key ESG opportunities

Why it matters: Investors want more information on how companies manage their sustainability-related risks and opportunities. It’s important to focus on the big picture and consider sustainability in light of all the risks and opportunities facing a company, including financial. In our 2023 global investor survey, 75% of respondents said it’s important for companies to report the relevant effects of sustainability risks and opportunities on the company’s financial statements. A similar number (76%) said companies should disclose the costs of meeting their sustainability commitments.

52% of companies either lack targets or disclose targets with little to no narrative about their connection to the company’s ESG strategy

Why it matters: Metrics and targets illustrate progress against your plans to manage sustainability-related risks and opportunities, and overall sustainability performance. It can be tempting to choose metrics and targets based solely on reporting standards and your peers’ disclosures. But to be meaningful to your stakeholders, they need to connect to your sustainability strategy and be based on your organization’s specific goals.

62% of companies don’t obtain assurance over any of their ESG metrics

Why it matters: Many investors say they don’t trust the sustainability disclosures they read. And demand is growing for high-quality assurance to enhance the reliability of corporate sustainability reporting, according to investors engaged by the International Organization of Securities Commissions.2 Regulators and standard-setters have adopted different degrees of assurance requirements. For example, the European Union’s CSRD requires assurance over a company’s entire ESG report—not just its metrics. That requirement starts with limited assurance beginning in 2026 and will later move to reasonable assurance.

How does your company compare? Where do you have gaps?

Read our framework for building trusted ESG reporting to understand the steps your company can take to create high-quality disclosures.

  • Develop an ESG reporting strategy
  • Select standards and metrics for reporting strategy
  • Determine processes, controls and governance
  • Publish investor-grade ESG reporting

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1 “About the CSSB,” Financial Reporting & Assurance Standards Canada, accessed Oct. 23, 2023.

2 “Report on International Work to Develop a Global Assurance Framework for Sustainability-related Corporate Reporting,” The Board of the International Organization of Securities Commissions, March 2023.

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