Updated Checked by the Tax-Services.ca editorial team How we check
Canada’s sustainability standards are CSDS 1 and CSDS 2, issued by the Canadian Sustainability Standards Board on December 18, 2024. They are voluntary unless a regulator or government requires them, and in November 2026 we found no rule forcing most companies to use them. The securities regulators paused their mandatory climate rule on April 23, 2025.
What are CSDS 1 and CSDS 2?
CSDS 1 covers general requirements for sustainability disclosure. CSDS 2 covers climate. The CSSB sits under Financial Reporting and Assurance Standards Canada, and it built both standards on the international IFRS S1 and IFRS S2, with changes it says serve the Canadian public interest.
The standards sit in the CPA Canada Handbook, Sustainability. So they’re accounting standards in the literal sense, written by the same family of bodies that writes the ones for financial statements.
| Item | What we confirmed |
|---|---|
| Issued | December 18, 2024, by the CSSB |
| Based on | IFRS S1 and IFRS S2, with Canadian modifications |
| Status | Voluntary unless a regulator or government mandates them (FRAS Canada) |
| Transition relief | Built in, including for scenario analysis and Scope 3 emissions. See the FRAS Canada page for the exact periods |
| Securities regulators | Paused work on a new mandatory climate disclosure rule on April 23, 2025. We found no newer CSA rule in November 2026 |
| 2026 activity at the CSSB | Exposure draft of proposed amendments to CSDS 2 (greenhouse gas emissions) under review. A separate nature-related consultation opened November 4, 2026, with comments due January 29, 2027 |
| Who must use them | Not confirmed for any group of companies |
Do private companies have to report?
Not under the standards themselves. Because they’re voluntary unless mandated, a small private corporation has no duty from them today. A bank, an investor or a large customer might still ask for the information, and that’s a commercial request, not a legal one.
The regulators’ pause matters here. It was about new mandatory rules for climate disclosure, and it means the answer to “who has to report?” is still “nobody new.” Existing securities law can still require issuers to disclose material risks, which is a separate thing we haven’t tested against any specific company.
Dates will move. The pause could lift, or provinces could act on their own. In its 2026 to 2027 priorities the Ontario Securities Commission, as summarized by law firms we read, no longer lists new mandatory climate rules as a key priority. That is a secondary summary, so check the CSA and your own regulator the day you need the position. For a routine for tracking this kind of change, see how to stay updated on accounting changes in Canada and what ASPE is.
What should a small business do now?
Probably very little, and that is a fair answer. Your time is better spent on the filings that carry penalties. For an employer, that means payroll. One employee paid $3,000 every two weeks in Ontario has $961.03 remitted to the CRA each pay period, made of $732.62 held back and $228.41 added by the employer, according to our payroll remittance calculator.
An employer’s payroll remittance and the tax return are due on fixed dates, and a late one costs money. A sustainability report nobody has asked for is optional. The corporate tax calculator and the small business tax rates page cover the filings that do carry penalties.
What if a lender or customer asks for climate data?
Then you have a real reason to look at CSDS 2. Ask what they want, in writing, and whether they’ll accept something short. Many requests are a few questions, not a full standard.
Start by gathering what you already have: energy bills, fuel receipts, travel records. Good bookkeeping makes that easy, and keeping records readable and retrievable is a CRA duty anyway. The CRA says you must keep required records for six years from the end of the last tax year they relate to.
If your own tax position needs checking at the same time, the self-employed tax calculator is a quick way to see where an owner’s income lands.
What does that request look like in practice?
Say Nadia owns a small fabrication shop in Hamilton, and her biggest customer sends a supplier questionnaire with a section on energy use and emissions. She doesn’t need to adopt CSDS 2 to answer it. She pulls twelve months of gas and electricity bills, adds up the litres of fuel for her two trucks from the receipts she already keeps, and replies with what she has, noting what she doesn’t track. If the customer wants more, they’ll say so. If she gets three of those questionnaires in a year, that’s the signal to look at the standards properly, perhaps with her accountant.
Mistakes to avoid with sustainability standards
Assuming a voluntary standard is a legal requirement is the expensive one. Assuming it will never become one is the risky one. Both come from not reading the source.
Another: quoting old dates. You’ll find articles saying reporting starts in a given year. Transition relief changed the timing, and the regulators paused after that. Check the date on whatever you read.
Finally, skipping the claim test. If a company says it follows CSDS, ask which standard, which year and whether anyone independent has checked. We haven’t verified any claim like that for any named firm.
Where did we check this?
In November 2026 we read the FRAS Canada sustainability page (latest dated item November 4, 2026) and the Canadian Securities Administrators’ April 2025 pause announcement, and we searched for a newer CSA release and found none. Record rules come from the CRA record keeping page. Payroll figures come from our calculator with 2026 data. Nadia and her shop are invented. The effective dates and transition periods are on the FRAS Canada Effective Dates page, which we did not reproduce here.
Frequently asked questions
What are CSDS 1 and CSDS 2?
They are Canada’s sustainability disclosure standards. CSDS 1 sets general requirements and CSDS 2 covers climate. The CSSB issued both on December 18, 2024, based on the international IFRS S1 and IFRS S2 with Canadian changes, and they sit in the CPA Canada Handbook under Sustainability.
Are CSDS 1 and CSDS 2 mandatory in Canada?
FRAS Canada says they are voluntary unless a regulator or government mandates them. In November 2026 we could not confirm a mandate for any group of companies. Federally regulated financial institutions face separate OSFI climate reporting expectations, which we did not review in detail.
What did the securities regulators decide?
On April 23, 2025 the Canadian Securities Administrators paused work on a new mandatory climate disclosure rule. They said existing securities law still requires issuers to disclose material climate risks. We found no newer CSA rule when we checked in November 2026.
Does a small private company need to report?
Not under the standards themselves. Because they are voluntary unless mandated, a small private corporation has no duty from them today. A lender, investor or large customer may still ask for emissions or energy data, but that is a commercial request, not a legal one.
Where do I check the current dates?
Check the FRAS Canada sustainability pages, including the Effective Dates page, and the Canadian Securities Administrators site on the day you need the answer. Timing has changed before, the CSSB has a pending exposure draft on CSDS 2 greenhouse gas amendments, and older articles quote dates that no longer apply.
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