CANADA Law and Practice Contributed by: Sarah Gingrich, Sean Stevens, Marie-Josée Neveu and Tracy Hooey, Fasken
It remains unclear whether Canadian securities regulators will impose mandatory climate-related disclosure. Such requirements had been under development and were expect to be released toward the end of 2025. However, in April 2025 the CSA announced it was pausing this matter to (i) support Canadian markets and issuers as they adapt to recent developments in the global and geopolitical landscape (ie, trade and tariff uncertainty), and (ii) focus on initiatives to make Canadian capital markets more competitive, effi - cient and resilient. However, the CSA also stat - ed it expects to revisit the matter in the future. The CSA also reminded reporting issuers that climate-related risks are “mainstream business issue and securities legislation already requires issuers to disclose material climate-related risks affecting their business in the same way that issuers are required to disclose other types of material information” . A related notable development is the passage of significant changes to Canada’s Competi - tion Act requiring companies to substantiate representations regarding the environmental or climate benefits of their products, services or business activities. This includes the introduc - tion (beginning in June 2025) of a private right of action regarding greenwashing claims. Since the passage of the legislation, some Canadian companies have responded by reducing or with - drawing related voluntary ESG disclosure. 3. Management of the Company 3.1 Bodies or Functions Involved in Governance and Management The management of Canadian companies is principally conducted by the CEO, CFO and the other members of the executive management team. The authority of management is as del -
egated to management by the board of direc - tors. Best practice in Canada is for the board to devise a formal mandate for itself together with an associated delegation of authority to man - agement. 3.2 Decisions Made by Particular Bodies Best practice in Canadian corporate govern - ance is for shorter term and general operational decision-making to be delegated by the board to management and for the board to retain author - ity over longer term and “bigger picture” issues. Matters over which the board retains authority are often allocated to board committees. Audit committees are required at Canadian pub - lic companies. The committee must be com - posed of a minimum of three members and, sub - ject to limited exceptions, each member must be independent. Other common committees include a compen - sation committee, a corporate governance com - mittee, an environmental or ESG committee, a nominating committee, a disclosure commit - tee, a pension committee, a risk committee, a safety committee and/or a finance committee. The number and nature of committees formed by the board is generally a function of the size of the company and the nature of its business. Best practice is for a committee to be comprised of board members who have expertise in the par - ticular area of the committee’s mandate. Special board committees are typically formed in certain circumstances, such as in connection with a possible change of control transaction (eg, an unsolicited takeover bid), in relation to an internal investigation (eg, regulatory non- compliance), or in response to an emergency or crisis situation (eg, a data breach).
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