In an earlier
Securities Law Update
reported that against the backdrop of investors' concerns
regarding climate change considerations and increasing regulation
to combat greenhouse gas (GHG) emissions, the Ontario Securities
Commission (OSC) released Staff Notice 51-716 - Environmental
Reporting in February 2008, outlining the results of a
targeted review to determine the degree to which reporting issuers
were adequately disclosing "environmental matters".
Similarly, in our September
2009 Emissions Trading & Climate Change Update
reviewed the escalating significance of such considerations in
light of numerous mandatory GHG reporting regimes that have
recently been announced across North America.
The OSC embarked on a corporate sustainability reporting
initiative earlier this year and on December 18, 2009, it
publicized its escalating efforts on this front by issuing Staff Notice 51-717 - Corporate Governance
and Environmental Disclosure
Specifically, Staff Notice 51-717 details the OSC's plans to
enhance the environmental and corporate governance disclosure
requirements of reporting issuers (other than investment funds). As
part of this initiative, the OSC agreed that it would make
recommendations to the Minister of Finance by January 1, 2010
regarding potential next steps to enhance disclosure of
Meanwhile, in the US, the Securities and Exchange Commission
(SEC) recently noted that it is taking a serious look at these
matters. The SEC's actions follow requests by leading US and
Canadian institutional investors responsible for trillions of
dollars worth of assets for interpretive guidance on climate risk
disclosure,1 including physical and regulatory as well
as litigation-related risks. Generally, investors are expressing
concern that significant gaps exist between GHG and climate change
disclosure among reporting issuers and insist that "reporting
on climate risks is no longer a mere virtue, but a legal obligation
and a necessity for investors." Investors have made it clear
that valuable information reported in a clear and consistent manner
is required in order to be able to make informed decisions about
both climate risks and opportunities in their portfolios.
Similarly, in Ontario, the OSC is consulting with investors,
climate change experts and other stakeholders as part of its
corporate sustainability reporting initiative. Recently, James
Turner, Vice-Chair of the OSC, stated that the OSC has heard
support for more guidance to issuers on disclosure of climate
change risk in order to improve the information disclosed to
investors and the marketplace. Thus, the OSC intends to issue a
notice by December 2010 that offers guidance on compliance with
existing environmental disclosure requirements under National
Instrument 51-102 Continuous Disclosure Obligations.
Publication is planned for no later than December 2010 so that
reporting issuers will have sufficient time to consider the
guidance when preparing their 2010 annual continuous disclosure
Companies in Canada and across North America are poised to
prosper in an emerging clean energy economy, and investors want to
know which companies are preparing to capitalize on this
opportunity and which are trailing behind. Accordingly, regardless
of whether or not they are subject to GHG or other environmental
reporting requirements, issuers must seriously consider the effect
of environmental matters and climate change on their business and
ensure that such matters are adequately disclosed to investors.
We will continue to follow the progress of the OSC in
establishing more detailed guidance for climate change disclosure.
Look for further analysis and observation in future bulletins.
The Imperial Oil refinery pled guilty to one offence for discharging a contaminant, coker stabilizer, thermocracked gas, into the natural environment causing an adverse effect and was fined $650,000...
Ontario's Ministry of the Environment and Climate Change continues to roll out its Climate Change Action Plan with its proposed GHG guide for projects that are subject to the province's Environmental Assessment Act.
In June, 2016, Justice Faieta of the Ontario Superior Court of Justice awarded damages of $57,712.31 plus interest against legal counsel who failed to file a claim within the required limitation period.
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