Canada: A New Scope For Material Environmental Social And Governance Disclosure?

On April 9, 2009, a private member's resolution was passed unanimously by the Ontario Legislature calling on the Ontario Securities Commission ("OSC") to conduct a consultation on corporate social responsibility and environmental, social and governance reporting standards, and adopt an enhanced standardized reporting framework for environmental, social and governance matters. 

In response to this request, roundtable consultation meetings were held on September 18, 2009 and December 7, 2009 to inform the recommendations that would be provided to the Ministry of Finance.  Following the consultations, on December 18, 2009, the OSC issued Notice 51-717 Corporate Governance and Environmental Disclosure.  The Notice communicates the OSC's intention to conduct a review of corporate governance disclosure in information circulars, annual information forms, or annual management's discussion and analysis forms filed by issuers in the of spring of 2010.

The OSC will also, in consultation with its advisory committees and other experts in the area, issue a staff notice by December 2010, providing guidance on compliance with existing environmental disclosure requirements.

In February of 2010, a second report to the Minister of Finance is expected to be issued on the topic of corporate "social" performance reporting. While not yet finalized, it is expected that this report will similarly recommend enhanced material disclosure of corporate social performance information be encouraged by the Ministry and the OSC.  Such recommendations would be consistent with the approach to material environmental disclosure taken by the OSC already (as indicated in Staff Notice 51-716, Environmental Reporting). Corporate social performance information would include such things as employment and labour relations, human rights practices, health and safety, consumer relations, and aboriginal and community relations.

While these developments suggest a renewed emphasis on sustainability reporting by the Ontario government, they do not indicate that regulatory or legislative reform is on the horizon.  Instead, the recommendations flowing from the April 9, 2009 resolution emphasize the need for complete disclosure of "material" social, environmental and governance practices in order to comply with existing Ontario securities law.

The question becomes what is "material" and what must be disclosed by Ontario issuers.  Canadian Securities Administrators (CSA) National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102) requires public companies to prepare, file with regulators and make available to the public continuous disclosure documents such as annual information forms, annual and interim financial statements and accompanying management's discussion and analysis, and material change reports. The objective of continuous disclosure requirements is to provide investors with all the relevant information they need to make informed decisions on whether to buy or sell securities and at what price. 

Several environmental, social and governance reporting obligations already arise under NI 51-102. Public companies are required to disclose in their MD&A any known trends, demands, commitments, events or uncertainties that are reasonably likely to affect the company's business or that management reasonably believes will materially affect the company's future performance. Annual information forms are required to discuss: material information regarding the financial and operational effects of social and environmental protection requirements on the capital expenditures, earnings and competitive position of the company in the current financial year and the expected effect in future years.  Social and environmental policies that are fundamental to the company's operations must be disclosed, along with the steps taken to implement them, associated risk factors and regulatory constraints that would be likely to influence investor decision making.

Social and environmental compliance, and associated risks, can significantly affect the business strategy, financial performance and potential value of a company. Investors want and are entitled to know the long-term impacts of social and environmental responsibilities on the business. If that disclosure is misleading or insufficient, investors in securities of the company can sue.

"Materiality" is, and will remain, the determining factor for including information in continuous disclosure documents mandated by securities laws. Information relating to social and environmental matters is likely material if a reasonable investor's decision of whether or not to buy, sell or hold securities of the issuer would likely be influenced or changed if the information was omitted or misstated. The OSC has stated that issuers should consider both quantitative and qualitative factors in determining materiality generally, and particularly for disclosure relating to environmental matters.  The same will likely be true of corporate "social" performance issues.

The likely outcome of these sustainability reporting initiatives in Ontario will be an increased emphasis on compliance within existing requirements.  Much work remains to be done however, and issuers should expect an ongoing process of engagement with issuers, investors and other stakeholders, to define the proper scope of materiality. There may also be increased efforts at standardization of environmental and corporate social performance indicators and reporting standards.  Issuers will, moreover, be increasingly encouraged to identify social and environmental issues and areas of social impact that are most likely to be material and relevant to their investors. In anticipation of such expectations, issuers can begin to examine existing voluntary sustainability reporting frameworks including the Global Reporting Initiative.

The bottom line of these developments for securities issuers is that public companies in Ontario and the rest of Canada are, and will continue to be, expected to fully disclose and discuss their social, environmental and governance risks, contingencies and compliance costs, to the extent they are material for the "reasonable investor". While the scope of "materiality" has not changed there may be a greater emphasis on full disclosure in these areas.  This may result in greater disclosure and new challenges for issuers, particularly in the mining sector.

About Ogilvy Renault

Ogilvy Renault LLP is a full-service law firm with close to 450 lawyers and patent and trade-mark agents practicing in the areas of business, litigation, intellectual property, and employment and labour. Ogilvy Renault has offices in Montréal, Ottawa, Québec, Toronto, and London (England), and serves some of the largest and most successful corporations in Canada and in more than 120 countries worldwide. Find out more at

Voted best law firm in Canada two years in a row.
2008 and 2009 International Legal Alliance Summit & Awards.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions