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Climate change : the CSA want to better inform investors

by

Charles Mathieu

21 August 2019 11:30

Photo : Freepik

The canadian securities administrators (CSA) have wanted to clarify certain points of their policy in connection with the dissemination of information on the risks posed by climate change.

“Many investors want to obtain information of better quality on the risks, opportunities, financial implications and governance processes to important climate change-related,” says Louis Morisset, president of the CSA and president and ceo of theAutorité des marchés financiers.

In addition to the interest of the investors respond to the impacts of climate change, the CSA have noticed that after a sample of 78 issuers, 22 % were offered information “passepartout” on the risks of climate change. In addition, no information was available on the subject for 22 % of the issuers being evaluated.

The information transmitted by the companies in their public documents may include, for example, targets for reduction of greenhouse gas (GHG) emissions, or, as indicated in the notice, ” an assessment of the trade implications of possible risks and opportunities related to climate change under various scenarios “.

“The efforts to mitigate the effects of climate change and adapting to it may give rise to opportunities for issuers, including the efficient use and economic resources, the enhancement of existing processes or the adoption of energy sources with low emission, the development of new products and services, access to new markets and the built-in resilience in the supply chain “, added the CSA.

Two types of risks

Two types of risk have been put forward in the notice of the CSA. On the one hand, the physical risks of acute or chronic (which will depend on the severity of the events) and, on the other hand, the risks of transition. These include the “risks” reputational, market, regulatory, political, legal, and technological “, one can read in the notice.

The consequences may result, as an increase in the costs of insurance, higher rates regulatory because of a too great emission of GHG and an interruption of the supply chain and operations as a result of a climate event.

“This notice is intended only as an informative tool to assist issuers to comply with their obligation to present the material risks related to climate change. […] Where issuers have information of better quality on the risk, issuers and investors can assess more easily those related to climate change, and investors are better able to make informed decisions, ” say the CSA by way of a press release.

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