Introduction
While U.S. regulators seem to be easing enforcement on misleading sustainability disclosures—evidenced by the SEC’s recent disbandment of its ESG enforcement task force—Canadian regulators are becoming more aggressive.
Regulatory scrutiny of “greenwashing” has increased significantly in Canada. What was once an opportunity for Canadian companies to freely promote their ESG progress has now become a growing area of risk, as sustainability reporting faces heightened accountability.
The recent enactment of Bill C-59 has introduced strict regulations regarding environmental claims, granting the Canadian Competition Bureau greater authority and empowering private parties to seek penalties for non-compliance. With 2030 interim emission reduction targets approaching, companies are under increased pressure to review their language and position their sustainability commitments cautiously. In an analysis of 52 TSX 60 listed companies, 6% have paused or removed sustainability reporting while awaiting clearer guidance, and 35% have reported ESG goals that are either off-track or repositioned.
Despite these changes, sustainability reporting remains robust, with most companies adhering to global reporting frameworks, including Sustainability Accounting Standards Board (SASB), Task Force on Climate-related Financial Disclosures (TCFD) and Global Reporting Initiative (GRI). Trends show shifts in terminology, with “sustainability” increasingly replacing “ESG” in reports and a growing focus on external assurance for ESG data, particularly regarding environmental information. The content of sustainability reports has expanded to address companies’ most critical material issues. Notably, over one-third of the companies reviewed now use reports to highlight their policies on the responsible use of AI.
With several overlapping events set to influence how companies communicate their sustainability efforts, 2025 will be a pivotal year for Canadian sustainability reporting. The possibility of an earlier-than-anticipated federal election, where maintaining Canada’s carbon tax is on the ballot, the enforcement of Bill C-59 and the proposed launch of the Canadian Sustainability Disclosure Standards (CSDS) will greatly influence how companies manage their sustainability reporting.
To help companies prepare for the complex and changing environment, Teneo is publishing its first-ever look at the “State of Canadian Sustainability Reports,” analyzing 52 TSX 60 listed companies. In this report, we provide (i) an overview of our methodology; (ii) our top 10 key takeaways; and (iii) 25 key data points from our analysis of 2024 Sustainability Reports. A previous report in Teneo’s 2024 State of Sustainability Series provides a similar analysis on U.S. Sustainability Reports and the key issues for businesses issuing sustainability reporting today.
Study Methodology
We analyzed over 80% of the sustainability reports from companies on the TSX 60 (“2024 Sustainability Reports”). For the purposes of this report, all references to 2024 Sustainability Reports refer to any annual ESG disclosure report, regardless of its naming convention.
Key Takeaways From 202 Sustainability Reports
01:Bill C-59 brings tougher scrutiny on green claims.
With Bill C-59 now law—enforcing stringent requirements for environmental claims and strengthening the Competition Bureau’s authority and private parties’ ability to seek significant penalties— companies must review all current and planned environmental communications. While the full impact of the new legislation is still unknown, companies should anticipate new challenges for the 2025 reporting cycle. With a Canadian federal election on the horizon, it remains to be seen whether the legislation will survive in its current form over the long term.
02: Sustainability reporting paused pending regulatory clarity.
Four companies on the TSX 60 have issued disclaimers and temporarily removed sustainability reporting content from their websites, social media and other public communications while awaiting clarity from Canada’s Competition Bureau.
03: Canadian Sustainability Standards Board (CSSB) set to shape future of Canadian sustainability reporting.
The CSSB is currently referenced in only 14% of reports. However, after the CSSB’s first two CSDS are finalized and become voluntarily effective on or after January 1, 2025, these standards will serve as influential references for regulators deciding on mandatory rules for sustainability-related disclosure.
04: Companies are committing to net zero by 2050.
Seventy percent of reviewed companies have set net zero commitments by 2050, in line with the global commitments made in the Paris Agreement. Additionally, 66% have set interim reduction targets for 2030. On average, those with 2030 interim targets aim for a 42% reduction in absolute emissions and a 38% reduction in emissions intensity.
05: ESG goals are under review.
Progress on the reviewed companies’ sustainability goals is actively being measured but is also undergoing re-evaluation. Among the reviewed companies, 35% indicated that at least one ESG goal was either “off-track” or “repositioned.”
06: SASB, TCFD and GRI lead the charge.
The vast majority of 2024 Sustainability Reports reported against SASB (93%), TCFD (88%) and GRI (87%) frameworks – followed by UN SDGs (68%).
07: Sustainability reports are expanding.
The average length of 2024 Sustainability Reports rose to 95 pages, a three-page increase compared to 2023. The total length of reports varied significantly, with the longest report being 228 pages and the shortest being 22 pages.
08: Reporting language is shifting from “ESG” to “Sustainability.”
Nearly half of all 2024 Sustainability Reports used “Sustainability” in the title, a 6% year-over-year increase, while “ESG” usage dropped by 8%. Across all reports, total references to “ESG” declined by 17% on average from 2023.
09: Obtaining external assurance is becoming common practice.
Most companies (71%) obtained external assurance for at least one ESG data point, with 62% covering environmental data only. KPMG was the most selected auditor, providing external assurance for 29% of the reviewed reports.
10: Materiality assessments are on the rise.
Most companies (80%) conducted an ESG materiality assessment, with 54% having done so within the past two years. While single materiality assessments remain the most common, 28% of companies have adopted a double materiality approach—reporting on both impact materiality and financial materiality—a figure slightly higher than in the U.S.
Conclusion
Canada’s sustainability reporting is at a turning point. In 2025, with the likely enforcement of Bill C-59, a potential federal election and the launch of the CSDS, companies will face a more complex regulatory landscape. To navigate these uncertainties, businesses must closely monitor political, social and regulatory developments and be prepared to adjust quickly. Those that do will be well-positioned to manage emerging risks, meet stakeholder expectations and communicate effectively.
Key Statistics of 2024 Sustainability Reports
I. 2024 Sustainability Report Communications Characteristics
II. 2024 Sustainability Report Content Characteristics
III. 2024 Sustainability Report Governance Characteristics
