Lexpert Magazine

www.lexpert.ca 15 e omnibus package, which proposes to amend the rules and delay certain reporting obligations by a few years, comes aer pushback from businesses and is currently dividing lawmakers. Other developments, like the accelera- tion of backlash against equity, diversity, and inclusion initiatives in the US, seem like further indications that Canadian businesses may be able to relax their ESG efforts. But neither Chell nor Singh believe that's the case. "Do ESG considerations become moot now that there is this rollback and pushback against certain ESG initiatives in the US? I think the answer to that one is no," Singh says. Chell agrees, noting that in Canada, busi- nesses face new regulations in addition to existing mandatory reporting requirements. Key among them is Bill C-59, which amends the Competition Act to crack down on corporate greenwashing. Passed into law last June, the changes aim to deter compa- nies from making statements, warranties, or guarantees of their products' environmental benefits unless backed by "adequate and proper" substantiation. e changes also ban unsupported claims about the environmental benefits of a business or business activity. "ey apply very, very broadly to any environmental representation a company would make relative to product or service benefit, as well as any business or business activity benefit claim of the environmental variety," Chell says. Any claim that busi- ness activities or products are "net zero," "carbon neutral," "eco-friendly," or "sustain- able" could "potentially be caught by these anti-greenwashing amendments, and there are significant penalties associated with that," Chell adds. On January 1, companies could start volun- tarily complying with sustainability disclo- sure standards developed by the Canadian Sustainability Standards Board. While the standards are not yet mandatory, that will change once they're eventually adopted by the Canadian Securities Administrators. Other mandatory rules that Chell is helping clients navigate include new requirements that Environment and Climate Change Canada introduced last summer, which mandated companies to report on their manufacture, import, and use of forever chemicals, or per- and polyfluoroalkyl substances, by January 29. Companies captured by Bill S-211, other- wise known as the Modern Slavery Act, are meanwhile facing their second year of reporting on how they've identified and mitigated the risk of forced child labour in their supply chains. "Just based on what we see in the market, I don't suspect that any of those legal require- ments that I mentioned will be affected by … politicization," Chell says. "If we look at the greenwashing amendments to the Competition Act, for instance, there's been a number of polls that have indicated the vast majority of Canadians actually support those amendments." POTENTIAL ROLLBACKS OF ESG REQUIREMENTS OUTSIDE CANADA February 11 US Securities and Exchange Commission acting chairman Mark Uyeda announces that the agency will pause defending a climate disclosure rule in court. The rule was originally introduced under the Biden administration February 26 The European Commission unveils an omnibus package, proposing to simplify corporate sustainability reporting and due diligence requirements introduced under the European Green Deal March 27 The SEC told a federal court it will no longer defend its climate disclosure rule

• Cover