Lexpert Magazine

16 www.lexpert.ca Feature He pointed to a recent poll conducted by Angus Reid, which found that more than 90 percent of Canadians support the notion that companies should face penalties for making unsupported or false environmental claims. "Regardless of what happens even in the federal election here, I don't expect that whatever party forms government would be interested in repealing that because it's obvi- ously contrary to the views of the Canadian population," Chell says. He adds that several other jurisdictions beyond Canada have introduced regulations on forced child labour and forever chemi- cals, which could further disincentivize the federal government from rolling back rules on those issues. Singh echoes this perspective. While she can foresee reporting standards being clari- fied or tweaked, "I don't see our governments peeling back, for instance, human rights due diligence, in the [form of ] removing forced labour- and child labour-related reporting." at said, Singh says she could see author- ities deciding to keep certain reporting methodologies or frameworks voluntary rather than mandatory longer than they had initially stated. In February, for instance, the Office of the Superintendent of Financial Institutions announced it would delay implementing certain climate-related reporting require- ments for banks and insurance companies. Originally slated to go into effect this year, those requirements – which concern emis- sions not directly produced by an organiza- tion or its assets but through activities the organization is indirectly responsible for in its value chain – are now poised to be imple- mented in 2028. Singh also points to the Canadian Sustainability Standards Board's sustain- ability disclosure standards. For those standards to become mandatory under secu- rities law, they need to be incorporated into a Canadian Securities Administrators rule. Last year, the CSA said it was working on a proposed rule and would assess international developments like the SEC's climate disclo- sure rule in the US. 2025 "With the state of play in the US, and the fact that the SEC is unlikely to come out with anything under the current climate, one would expect the CSA to be equally delayed in their climate change-related rules," Singh says. Despite such delays, she says that, overall, ESG standards are "not something I think the future government is going to walk away from completely." While the government's current priorities are "shoring up economic and social secu- rity in this country," which could involve eliminating red tape to facilitate efficiency, "that is not at the expense of the environ- ment, nor is it at the expense of human rights," Singh adds. Chell's advice to clients is that while ESG may not necessarily stand the test of time, based on global trends, mandatory require- ments won't be going away anytime soon. "In the short term, and medium and longer term as well, you're going to see sustainability be moved more from an aspi- rational element of corporate strateg y into more of a compliance- and value-based exer- cise," Chell predicts. Singh says businesses should also think beyond reporting requirements. While complying with regulations is critical, many ESG efforts benefit businesses in other tangible ways. Practices like assessing a supply chain's vulnerability to climate change- related risks – like floods, heat, or drought – are smart even if they aren't technically required under the law. "Your climate change-related risks don't disappear because the government changes," Singh says. "The reputational and the financial and the legal risks related to human rights violations are not eliminated just because there's a change to the government." She adds, "Just because you don't have to report on something doesn't mean that it's not going to be a real issue for the business itself. "It might be that the reporting burden is decreased, but does it mean the company should stop collecting that data?" You're going to see sustainability be moved more from an aspirational element of corporate strategy into more of a compliance- and value-based exercise" Conor Chell KPMG CANADA "Your climate change-related risks don't disappear because the government changes" Sharon Singh MCMILLAN LLP

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