Canadian Sustainability Disclosure Standards (CSDS 1 and CSDS 2)
CSDS 1 and CSDS 2 are Canada's first sustainability disclosure standards, issued by the Canadian Sustainability Standards Board (CSSB) in December 2024. They align with the ISSB's IFRS S1 and S2 and apply voluntarily to annual periods beginning on or after January 1, 2025.
The Canadian Sustainability Standards Board (CSSB) released the Canadian Sustainability Disclosure Standards in December 2024 as part of the CPA Canada Handbook. CSDS 1 sets general requirements for disclosing material sustainability-related financial information. CSDS 2 covers climate-related risks and opportunities, including greenhouse gas emissions, governance, strategy, and targets.
Both standards match the ISSB's IFRS S1 and IFRS S2, with extra transition relief for Canadian companies. Reporters can limit disclosures to climate-related information for the first two annual reporting periods, and Scope 3 emissions reporting is not required until the fourth. Quantitative scenario analysis gets three years of relief. After the relief periods expire, the full IFRS baseline applies.
The standards are voluntary today. The Canadian Securities Administrators (CSA) have signaled that any future climate disclosure rule for public companies would build on the CSSB's work, so many Canadian companies are aligning their sustainability reporting with CSDS now rather than waiting for a mandate.
Reporting under CSDS 2 requires GHG Protocol-aligned measurement of Scope 1 and 2 emissions, with Scope 3 to follow. Companies that already maintain assurance-ready emissions data, like Gravity customers do, can adopt the standards without rebuilding their carbon accounting from scratch.
Frequently asked questions
What are CSDS 1 and CSDS 2? +
CSDS 1 and CSDS 2 are Canada's first sustainability disclosure standards, issued by the Canadian Sustainability Standards Board in December 2024. CSDS 1 sets general requirements for sustainability-related financial disclosures. CSDS 2 covers climate-related disclosures, including greenhouse gas emissions.
Are the Canadian Sustainability Disclosure Standards mandatory? +
No. CSDS 1 and CSDS 2 are voluntary, effective for annual periods beginning on or after January 1, 2025. The Canadian Securities Administrators have indicated that any future mandatory climate disclosure rule for public companies would build on the CSSB's standards.
How do CSDS 1 and CSDS 2 differ from IFRS S1 and S2? +
The content matches IFRS S1 and S2, but the CSSB added transition relief for Canadian reporters: two annual periods of climate-first reporting, no Scope 3 reporting for the first three annual periods, and three years of relief on quantitative scenario analysis.
Related terms
ISSB (International Sustainability Standards Board)
The ISSB is a body under the IFRS Foundation that issues global sustainability disclosure standards. IFRS S1 (General Requirements) and IFRS S2 (Climate-related Disclosures) set the baseline for sustainability reporting worldwide, designed for investor-focused, financially material disclosures.
CSRD (Corporate Sustainability Reporting Directive)
The Corporate Sustainability Reporting Directive (CSRD) is the European Union's mandatory sustainability reporting law. It requires companies operating in the EU above certain thresholds to disclose environmental, social, and governance (ESG) information according to the European Sustainability Reporting Standards (ESRS), with third-party assurance.
Sustainability Reporting
Sustainability reporting is the disclosure of an organization's environmental and social performance to stakeholders, including regulators, investors, customers, and employees. It covers GHG emissions, energy, water, waste, and social metrics, structured according to frameworks like CSRD/ESRS, CDP, GRI, and ISSB.
Assurance and Verification
Assurance (or verification) is an independent third-party assessment of an organization's GHG emissions data and reporting processes. Limited assurance provides moderate confidence that the data is free of material misstatement; reasonable assurance provides a higher level of confidence similar to a financial audit.
Scope 3 Emissions
Scope 3 emissions are all indirect greenhouse gas emissions that occur in an organization's value chain — both upstream (suppliers, purchased goods, business travel, employee commuting) and downstream (product use, end-of-life treatment, investments). Scope 3 typically represents 70–90% of a company's total carbon footprint.