Canada’s ESG reporting standards is ramping up in 2026. From the EU to Mexico, stakeholder expectations for organized, comparable sustainability information to support financial decisions are increasingly common. Businesses are now viewing ESG reporting as both a necessary compliance priority and a potential competitive advantage. The finalization of the Canadian Sustainability Disclosure Standards (CSDS 1 and 2) as a voluntary reporting standard is creating a more consistent baseline for companies and many organizations are adopting these metrics ahead of formal mandates.
Securities regulators in Canada have paused work on mandatory climate rules to observe global developments, but companies should not put off ESG disclosures due to this delay. Organizations that drag their feet still risk the downfalls of reactive compliance, climate-related damage, and loss of credibility.
The Current Canadian Landscape
Even without mandatory reporting, organizations face reporting expectations from multiple angles. Office of the Superintendent of Financial Institutions (OFSI)’s climate risk guideline B-15 requires financial governance frameworks and climate risk management for federally regulated lenders and insurers, which in turn increases the reporting expectations of their corporate clients. Companies working with these institutions may field requests for structured data reporting and detailed risk disclosure.
Passed in 2024, Bill C-59 made major amendments to the Competition Act, explicitly targeting greenwashing. Bill C-59 makes it necessary to back up corporate sustainability claims with credible evidence. The Competition Bureau released further guidance on how to comply with the new law and provide evidence for claims. This increases the legal and reputational risk of making sustainability-related claims without strong data proving their validity. Alongside global influence of international investors, buyers, and lenders who expect climate risk disclosures in accordance with global reporting standards, Bill C-59 adds to the business case for voluntary data-backed ESG reporting. Many Canadian organizations have already begun publishing reports aligned with CSDS 1 and 2 due to these factors.
Extended Producer Responsibility (EPR) programs, such as British Columbia’s Recycling Regulation, shift the responsibility for product lifecycle management to producers, encouraging sustainable processes and designs. British Columbia’s Recycling Regulation requires producers of regulated products such as gasoline, pharmaceuticals, paint, and packaging and paper products to manage the entire product lifecycle from design to end-of-life. All producers of regulated products are required to submit an EPR plan with annual performance reporting.
While ESG reporting remains voluntary for the time being, the Canadian federal government has confirmed plans to move towards mandatory climate-related financial disclosures for large, federally incorporated private organizations. This sets a clear direction for the future of ESG reporting in Canada.
Which Organizations Are Most Affected?
Not all organizations face the same level of exposure to ESG regulations and related risks. The most affected groups are:
- Public companies with institutional investors who expect disclosures aligned with global standards
- Financial institutions and their borrowers who are subject to OFSI and market disclosure expectations
- Large private companies seeking capital or major contracts
- Carbon-intensive sectors like energy, construction, and mining
- Regulated product producers, including brand-owners, distributors, importers, and retailers
- Brands with strong sustainability claims who are now required to back those claims up with data
Common Reporting Readiness Gaps
Data Gaps: Many firms have Scope 1 and 2 emissions data, but struggle to accurately capture Scope 3 data. Limited supplier engagement and complex supply chains can create gaps in indirect emissions data, leaving Scope 3 disclosures incomplete. Because of the cross-departmental nature of ESG reporting, it is also common to struggle with data silos, duplicate data, and inconsistent formatting.
Governance Gaps: Without expert guidance, it is common to struggle with creating clear data ownership and oversight structures. Responsibility is sometimes scattered across sustainability, finance, operations, and legal teams without any clear accountability. When ESG data is coming from multiple departments, it can be challenging to maintain designated data owners for every step of the reporting process.
Skills Gaps: Oftentimes, operations or finance teams who are responsible for gathering data or assessing climate-related risks are not formally trained in sustainability, which can lead to confusion about which data is materially relevant or how certain areas of the organization are affected by climate change.
These readiness gaps make it difficult to spot and remedy missing or inaccurate information, ensure traceability, and defend disclosures before auditors, stakeholders, or regulators. To ensure complete, auditable ESG disclosures, working with a specialized partner like Green Impact can be extremely valuable. Our team is comprised of both sustainability and data management experts who can help you overcome the biggest ESG reporting challenges. Assess the strength of your ESG reporting with our ESG data readiness service, consult an expert on complying with specific regulations, or implement a powerful ESG platform for data governance. Whatever your ESG reporting needs, Green Impact can help you streamline your process and make ESG reporting easy.