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.