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Third-year student Chelsea Daku won the 2019 Policy Presentations in Energy Law and Policy, part of the Dentons' International Energy Law Study Tour course.

Chelsea's presentation, titled "Addressing the Need for Climate-Related Disclosure Guidance in Canada," examined where the current Canadian climate-related disclosure framework is at, some of its weaknesses, and discussed how additional measures such as establishing a mandatory carbon audit committee may help resolve some uncertainty.

Presentation abstract

The recent rise in climate change and carbon emission litigation coupled with global commitments to ambitiously combat climate change underscores the need for a climate-related disclosure policy. Development of this policy has wide support of energy-related public issuers and financial institutions. This was demonstrated through the development of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD) recommendations and the lengthy consultation process that went into developing the Canadian Securities Administrator’s Report on Climate-change Related Disclosure Project.

The impetus of developing this policy is largely born from the uncertainty surrounding future carbon costs and risks associated with changing regulatory regimes – as they relate to carbon emissions and decarbonising economies – that may result in corporations having stranded assets. Policy guidance will help corporations to better understand their position in terms of disclosure liability. For financial institutions, a standardized disclosure regime will influence investment decisions and help to support and assess strategic opportunities created by the need for borrowers to implement and climate change adaptation measures.

Ultimately, without a clear regulation and understanding of what amounts to material information under Canadian securities laws, it is difficult for investors to have faith in corporations’ books and leaves a substantial amount of discretion in the hands of energy companies. In this presentation I will discuss where the current Canadian climate-related disclosure framework is at, some of its weaknesses, and discuss how additional measures such as establishing a mandatory carbon audit committee may help resolve some uncertainty.

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