ESG Reporting in Canada: What Businesses Need to Know

Canadian businesses face growing requests from investors, lenders, customers and business partners to explain their environmental, social and governance (ESG) performance. These requests can cover carbon emissions, employee welfare, supplier practices, ethical conduct and board oversight. Understanding ESG reporting in Canada helps businesses identify the rules that apply to them, prepare reliable records and respond to stakeholder expectations.

Finsoul Network Canada can help businesses assess their reporting needs and organise their financial and non-financial information. This guide explains Canadian reporting requirements, recognised standards, key ESG metrics, documentation and the steps businesses can take to prepare a clear and accurate report.

What Is ESG Reporting and Why Does It Matter in Canada?

ESG reporting explains how a business manages environmental, social and governance matters. It gives stakeholders information about the company’s risks, policies, performance and progress towards its targets.

The three areas cover different aspects of business activity:

• Environmental: Greenhouse gas emissions, energy consumption, water use, waste management and pollution.
• Social: Employee health and safety, working conditions, human rights, diversity and supplier labour practices.
• Governance: Board oversight, business ethics, executive accountability, internal controls and risk management.

Strong ESG reporting helps businesses answer questions from investors, lenders, customers and procurement teams. It can also help management identify operational risks, assess resource use and monitor progress against internal targets.

Sustainability reporting Canada businesses publish can cover many of the same subjects, although the scope depends on the reporting framework. Businesses should select information that reflects their activities, obligations and material risks instead of publishing general claims without supporting evidence.

Is ESG Reporting Mandatory in Canada?

The rules depend on a company’s legal structure, industry, regulatory status, business activities and contractual commitments. No single ESG reporting rule applies to every Canadian business.

Publicly Listed Companies

Public companies must meet applicable securities disclosure obligations. If a climate or other sustainability matter could materially affect the business, the company may need to explain that risk through its existing disclosure processes. Directors and management should assess material information carefully and keep supporting records.

Banks and Federally Regulated Financial Institutions

Federally regulated financial institutions must assess the regulatory expectations that apply to their operations. The Office of the Superintendent of Financial Institutions (OSFI) has issued Guideline B-15 on climate risk management, including climate-related disclosure expectations for institutions within its scope.

Private Companies and Small Businesses

Most private businesses do not face a universal obligation to publish a full ESG report. However, larger customers, lenders, investors and procurement teams may ask them for emissions figures, labour policies, supplier information or other ESG data.

Businesses therefore need to check both legal duties and commercial expectations. A small supplier may need to provide selected information to retain a contract even when it does not have to publish a standalone report.

Businesses With Supply Chain Reporting Duties

Some businesses fall under Canada’s Fighting Against Forced Labour and Child Labour in Supply Chains Act. The law requires qualifying entities and government institutions to report on steps they take to prevent and reduce the risk of forced labour and child labour in their supply chains. It does not create a universal ESG reporting obligation for all businesses.

Which ESG Reporting Laws and Standards Apply in Canada in 2026?

Businesses should distinguish legislation and binding regulatory requirements from voluntary reporting standards. This distinction helps them identify their actual obligations and avoid treating every ESG framework as mandatory.

Canadian Sustainability Disclosure Standards: CSDS 1 and CSDS 2

The Canadian Sustainability Standards Board developed CSDS 1 and CSDS 2 to provide a Canadian framework for sustainability-related financial disclosures.

• CSDS 1 addresses general requirements for disclosing sustainability-related financial information.
• CSDS 2 focuses on climate-related disclosures, including climate risks, opportunities, governance and relevant performance measures.

The standards draw on the international sustainability disclosure standards issued by the International Sustainability Standards Board. Canadian businesses can use them to organise disclosures, but publication of these standards did not, by itself, make them mandatory for every company.

Businesses should check the latest requirements from their securities regulator or other relevant authority before deciding which standards they must follow.

Canadian Securities Administrators and Climate Disclosure Rules

The Canadian Securities Administrators (CSA) paused work on its proposed mandatory climate-related disclosure rules in April 2025. This decision did not remove existing securities disclosure obligations. Public companies must still assess material risks and disclose information when applicable securities laws require it.

Companies should check current CSA announcements and the rules of their provincial or territorial securities regulator before preparing their reporting plan.

OSFI Guideline B-15

OSFI Guideline B-15 sets out climate risk management expectations for federally regulated financial institutions. It addresses governance, risk management, scenario analysis and climate-related disclosures within the guideline’s scope.

Financial institutions should review the current guideline, applicable implementation dates and any subsequent OSFI updates before preparing their disclosures.

Canada’s Supply Chains Act and Greenhouse Gas Reporting

The Supply Chains Act focuses on reporting steps taken to prevent and reduce forced labour and child labour risks. Qualifying entities must assess the law’s scope and reporting obligations.

The federal Greenhouse Gas Reporting Program has a separate purpose. It requires facilities that meet the applicable reporting criteria to report greenhouse gas emissions. Businesses should check the current thresholds and program instructions instead of assuming that every facility or company must submit a report.

These separate obligations form part of the wider regulatory picture, but each has its own scope, criteria and reporting process.

What Information Should an ESG Report Include?

A useful ESG report connects the company’s material risks with its policies, actions, targets and results. The information should reflect the chosen framework and the obligations that apply to the business.

A report may cover:

• Environmental performance: Emissions, energy use, water consumption, waste and pollution controls.
• Workforce practices: Employee safety, training, turnover, working conditions and labour policies.
• Human rights: Supplier screening, identified labour risks and corrective action.
• Governance: Board responsibilities, ethics policies, risk oversight and reporting controls.
• Targets and progress: Baseline figures, performance indicators, target dates and explanations for missed targets.
• Financial implications: Material sustainability risks or opportunities that could affect revenue, expenditure, assets, liabilities or access to finance.

The report should distinguish measured results from estimates and future commitments. Businesses should also explain their methods and limitations when these details affect how readers interpret the information.

How to Prepare an ESG Report in Canada: Step by Step

Businesses can organise the reporting process into five stages. Each stage should have a clear owner, defined tasks and supporting records.

Step 1: Identify Your Reporting Obligations

Review the company’s listing status, industry, regulatory oversight, supply chain activities and customer contracts. Identify applicable laws, reporting standards and disclosure deadlines. Record which requirements apply directly and which requests arise from commercial relationships.

Step 2: Identify Material ESG Issues

Assess the environmental, social and governance matters that could affect the business or matter to its stakeholders. Consider the company’s operations, location, workforce, suppliers and industry risks. Record the reasons for including or excluding major topics.

Step 3: Collect Data From Each Department

Ask finance, human resources, procurement, operations, facilities and compliance teams to provide relevant information. Set reporting periods, calculation methods and responsibilities. Compare the data with source records and investigate gaps before using the figures in a report.

Step 4: Set Targets and Measure Progress

Choose performance indicators that relate to the company’s material issues. Establish a baseline, assign responsibility and set realistic deadlines. Track results consistently so the business can compare performance across reporting periods.

Step 5: Draft, Review and Approve the Report

Prepare the disclosures using the selected framework. Check figures, definitions, supporting evidence and consistency with financial statements and other public disclosures. Ask the appropriate managers or board committee to review and approve the report before publication.

Which ESG Metrics Should Canadian Businesses Track?

The right metrics depend on the company’s industry, operations and reporting obligations. Businesses should focus on indicators that help them measure material risks and explain their performance.

Scope 1 emissions come directly from sources a company owns or controls. Scope 2 emissions arise from purchased electricity, heating, cooling or steam. Scope 3 emissions cover other indirect emissions across the company’s value chain.

Businesses should select relevant measures instead of collecting every available figure. Consistent definitions and calculation methods help management compare results between reporting periods and explain changes in performance.

How Should Businesses Choose an ESG Reporting Framework?

The right framework depends on the company’s reporting obligations, stakeholders and business objectives. Businesses should understand the purpose of each option before choosing one.

Canadian Sustainability Disclosure Standards

CSDS 1 and CSDS 2 provide a Canadian framework for sustainability-related and climate-related financial disclosures. Businesses can review these standards when they want to prepare structured disclosures for investors and other financial stakeholders.

IFRS Sustainability Disclosure Standards

IFRS S1 and IFRS S2 provide international requirements for sustainability-related financial information and climate-related disclosures. Companies with international operations or investors may need to consider these standards alongside applicable Canadian rules.

Global Reporting Initiative Standards

The Global Reporting Initiative (GRI) Standards focus on an organisation’s impacts on the economy, environment and people. They may suit businesses that want to report on a wider range of impacts.

Greenhouse Gas Protocol

The Greenhouse Gas Protocol provides widely used guidance for measuring and reporting greenhouse gas emissions. It supports emissions calculations but does not replace a full ESG reporting framework.

Before choosing a framework, review the ESG disclosure requirements Canada recognises through legislation, regulation or relevant reporting arrangements. Businesses should also check what their investors, customers and lenders expect.

What Records Do You Need to Support ESG Disclosures?

Reliable reporting depends on records that support the figures, policies and statements in the final document. Assign responsibility for each data category and keep evidence for the reporting period.

Prepare the following records where relevant:

• Energy bills, fuel purchases and emissions calculations.
• Water usage, waste collection and environmental monitoring records.
• Employee training, workplace safety and HR records.
• Supplier assessments, contracts and labour risk reviews.
• Board minutes, risk registers and corporate governance policies.
• Evidence of progress against ESG targets and management approvals.

Businesses should document calculation methods, data sources and assumptions. When they estimate a figure because complete records are unavailable, they should explain the method and its limitations. These controls help reviewers trace reported information back to its source.

What ESG Reporting Mistakes Should Canadian Businesses Avoid?

Poor reporting can create confusion, weaken stakeholder confidence and lead to compliance problems. Businesses that want stronger ESG compliance Canada stakeholders can trust should watch for these common mistakes:

• Assuming every company must publish an ESG report: Check the laws and regulations that apply to the business.
• Confusing voluntary standards with legal duties: Identify the difference between reporting guidance and binding requirements.
• Making unsupported environmental claims: Keep evidence for statements about emissions, recycling and environmental performance.
• Setting targets without tracking progress: Record a baseline, assign responsibility and measure results.
• Ignoring relevant supplier risks: Assess labour practices and other material risks across the supply chain.
• Using inconsistent figures: Apply consistent definitions and calculation methods across reporting periods.

A clear reporting process can help businesses identify errors before publication. Management should review significant claims, calculations and omissions rather than relying on unverified information.

When Should You Seek Professional ESG Support?

Some companies can prepare basic disclosures internally, while others need specialist support. ESG reporting services Canada providers offer may help businesses assess their reporting position, review data and prepare disclosures under a suitable framework.

Professional support may be useful when a business:

• Needs to identify applicable legal or contractual obligations.
• Lacks reliable emissions data or suitable measurement methods.
• Must respond to detailed ESG questionnaires from customers or lenders.
• Wants to assess gaps in existing reporting practices.
• Needs stronger internal controls over non-financial information.

Before hiring a provider, ask about its experience with Canadian reporting rules, the relevant industry and the standards your business plans to use. Confirm the scope of work, required records, review process and deliverables. Professional support can help prepare a report, but company management remains responsible for the accuracy of its disclosures and compliance with applicable obligations.

Conclusion

ESG reporting in Canada requires a clear understanding of applicable rules, reliable data and consistent review procedures. Businesses should identify their reporting obligations, select relevant metrics and keep records that support every material claim. They should also monitor regulatory updates and stakeholder requests as their operations change. Finsoul Network Canada can help businesses review their reporting needs, organise financial information and prepare for ESG disclosure. A well-planned process helps management explain business risks, track performance and respond to reporting requests with greater confidence.

Get Support With ESG Reporting in Canada

Need help assessing your reporting obligations or preparing ESG disclosures? Finsoul Network Canada can help you review your current records, identify reporting gaps and organise the information your business needs. Contact the team to discuss your reporting goals, relevant standards and next steps for your company.

FAQs

Does every Canadian business have to publish an ESG report?

There is no universal ESG reporting mandate for every Canadian business. Specific securities, financial sector, supply chain and emissions reporting obligations can apply to qualifying companies and facilities. Businesses should assess the rules relevant to their circumstances.

What are the ESG reporting requirements for Canadian businesses?

ESG reporting requirements Canada businesses face depend on their industry, regulatory status, operations and contractual commitments. Some must meet specific legal disclosure duties, while others respond to requests from investors, lenders and customers.

What are CSDS 1 and CSDS 2?

CSDS 1 covers general sustainability-related financial disclosures, while CSDS 2 covers climate-related disclosures. The standards provide a Canadian reporting framework, but businesses must check which requirements apply to them.

Are private companies required to follow the same reporting rules?

Private companies do not all face the same reporting duties. Some must comply with specific laws, while others may need to provide ESG data to secure financing, meet customer requirements or maintain supplier relationships.

How often should a Canadian business prepare an ESG report?

Many formal reporting arrangements use annual disclosures, but the required frequency depends on the applicable rules and framework. Businesses should also follow any deadlines in contracts, regulatory requirements or customer reporting requests.