Mandatory Stability Reporting – Does it affect you?
Mandatory Stability Reporting – Does it affect you?
The news is out. Mandatory sustainability reporting is coming to Canada. Businesses of all sizes will soon need to disclose how they manage environmental, social, and governance (ESG) issues. If you own or manage a business, this change affects you. And its not just about complying to legislation. There are benefits for forward thinking corporations. Preparing for it now before it’s required will save time, reduce stress, and strengthen your reputation.
So, what Is Mandatory Sustainability Disclosure?
Sustainability disclosure means you will public report your company’s business activity impact on the environment, society, and the economy. Instead of starting from scratch and developing standards, Canada plans to align their rules with the International Sustainability Standards Board (ISSB) standards.
These standards include business reporting on:
- Greenhouse gas emissions
- Energy and water use
- Waste and recycling practices
- Climate risks and opportunities
- Employee and community impact
The sustainability reports will sit alongside your financial statements. Investors, banks, and customers can use them to judge how responsibly your company operates, and how well it’s managing long-term risks. And make informed decisions on doing business with you or lending you money.
Why This Will Matter to Canadian Businesses
Mandatory ESG reporting isn’t just for large corporations. Medium and smaller businesses may be affected through supply chain expectations. Large clients will want and need verified sustainability data from suppliers to meet their own reporting obligations.
Going into early preparation mode will help you stay compliant, attract investors, and meet customer expectations. It also gives your business a chance to find cost savings—like lowering energy use or reducing waste.
The Accountant’s Role in Sustainability Reporting
Your accountants will be key players in meeting the new disclosure requirements. Why? Because they’re already experts at tracking, verifying, and presenting financial data. Now they’ll extend those skills and use new tools on non-financial data.
Accountants can help you:
- Track and verify all environmental data (emissions, waste, energy use)
- Integrate sustainability metrics with your financial statements
- Identify cost-saving opportunities through using resources efficiently
- Ensure compliance with ISSB and other reporting standards
An Example: A Canadian Manufacturer Makes Preparations
A Toronto-based box manufacturer decided to leapfrog ahead of the new rules. Their accountant reviewed the ISSB standards and found key areas to report:
- Energy and fuel used in production
- Greenhouse gas emissions
- Water consumption
- Waste and recycling rates
The company started tracking these numbers quarterly using a simple spreadsheet. Over time, they adopted cloud-based sustainability tracking software. Within a year, they reduced energy use by 10% and increased recycled material use by at least 20%.
When disclosure rules take effect, they’ll be in position and ready—with reliable data and a clear sustainability story to share with clients and investors. And that’s a big win in the marketplace today.
Ideas on How to Prepare Now
- Start by Assessing your current data. Identify what environmental and social data you already collect.
- Find gaps. Determine which sustainability metrics are missing and need attention.
- Create a tracking system. Record emissions, energy use, and waste on a consistent schedule.
- Set goals. For example, aim to cut your emissions or reduce waste amount within a specific time frame.
- Train your team. Make sure everyone understands how and why this data is collected.
- Work closely with your accountant. Accountants ensure this data is accurate, verified, and prepared for disclosure.
Key Benefits of Early Preparation
- Avoid rushed compliance when rules take effect
- Build trust with investors and customers
- Find hidden cost savings through efficiency
- Improve brand reputation
- Gain an edge over competitors who wait
Wrap Up
Complying with mandatory sustainability disclosure in Canada is more than just a reporting requirement—it’s also a business opportunity. Companies that prepare now will have stronger and more complete data, clearer goals, and more investor confidence.
Your accountant can guide you through the process, ensuring your sustainability report is accurate, credible, valuable, and more meaningful. All before you are required to do so,
So, start today. Prepare your business for Canada’s new sustainability disclosure rules—and turn compliance into a competitive advantage. There aren’t many out there today, but this is one that you may find your competitors napping on.