On Monday, Canada completed the first step towards adopting and implementing sustainability financial disclosure standards for many industries, including agriculture.
The Canadian Sustainability Standards Board (CSSB) says it achieved quorum with the appointment of four new members, putting the board in “decision-making mode” now that the International Sustainability Standards Board’s (ISSB) has released its initial standards, known as IFRS S1 and S2.
If all of that sounds like a “so what?” for agriculture, stick with me. The potential impact of these financial disclosure standards is significant, as companies may be required to amass information from their customers and suppliers — such as a bank that has agriculture clients, or a grain company buying from farmers.
“Today’s announcement includes representation from responsible investment and Canada’s resource-based sectors. It is especially important to have high-emitting sectors like oil and gas, mining, energy and agriculture at the table, considering the focus of IFRS S2 – which establishes requirements for climate-related disclosure,” says Kevin Nye, chair of the Auditing and Assurance Standards Oversight Council, and co-chair of the CSSB Implementation Committee.
The standards are being adopted as a means to deter “greenwashing” of investment vehicles or company claims, and that spells more administration and reporting than ever before.
What farmers and ranchers will be required to record and report is not yet set, but it’s expected that in addition to all the financial income and expenses reported for taxation purposes, estimated emissions from fuel use, utilities, and even processing may enter the required field.
To start, if a food or grain company adopts these sustainability accounting standards, it would likely seek or at least have to estimate farm-level information from the farms it does business with.
Last week on RealAg Radio, I spoke with Garner Deobald, president of the Saskatchewan Stock Growers Association, an organization that’s been working to bring these pending new requirements to light for the farm and ranch sector. On the same show I spoke with Dr. Tammy Nemeth, of ESG-Squared Insights, on what these standards might mean:
With Monday’s announcement, as alluded to in the audio above, Canada is moving forward with implementing a standard without public consultation — not that public consultation was required as the organization creating these standards is independent from government.
“Canada now has an operational CSSB, ensuring the release of the first international sustainability disclosure standards – and all forthcoming standards – have the leadership and expertise required to be adopted,” says Lorraine Moore, chair of the Accounting Standards Oversight Council, and co-chair of the CSSB Implementation Committee. The implementation committee is expected to continue to provide transitional oversight of the CSSB until decisions on a permanent oversight structure are finalized.
Hear more: The issues panel on Friday’s show was joined by Stuart Person of MNP to get an accounting firm’s insight in to the sustainability financial disclosure standards.