June 10, 2024

Chair, Charles-Antoine St-Jean

Canadian Sustainability Standards Board (CSSB)

277 Wellington St W

Toronto, Ontario

M5V 3H2

Submitted through FRAS Canada Internet Portal

RE: Canadian Sustainability Disclosure Standard (CSDS) Reporting Standards; Feedback on CSSB CSDS 1 (Sustainability) and CSDS 2 (Climate-related) Financial Disclosures

PDF of the letter

Dear Chair St-Jean,

Thank you for this opportunity to submit comments. 

In recent testimony to the Canadian Senate on Senator Rosa Galvez’ sponsored Bill S-243, climate-aligned finance, Mark Carney, former governor of the Bank of England and Bank of Canada, made these statements regarding climate aligned finance – which is relevant to this discussion about CSDS Reporting standards:

Mark Carney told the Canadian Senate that,

“…four fundamental building blocks are required:

  • Decision-useful climate-related disclosure,
  • Net-Zero transition plans,
  • Taxonomies that provide common definitions of transition finance,
  • Scenario planning by financial institutions and stress testing by their prudential authorities.
  • In these respects, Canada is lagging its international peers.”[1]

Mr. Carney also made fatuous statements about the potential for Carbon Capture Utilization and Storage (CCUS) and Direct Air Capture (DAC) as ‘solutions’ to the perceived problem of carbon dioxide emissions.  A favoured carbon dioxide reduction option by the Bank of Canada and Canada Energy Regulator, known as Bio-energy Carbon Capture and Storage (BECCS) would take arable land out of food production and has no operation at scale; the UN Special Rapporteur Jean Zeigler deemed biofuels a crime against humanity.

Fundamentally, none of these steps are necessary.  The UNFCCC is reporting that global emissions are under the ‘climate policy success’ scenario of RCP 4.5.  The alleged climate emergency is over.

As our President has shown the Senate, in his personal letter,[2] and as we have shown the Office of the Superintendent of Financial Institutions (OSFI),[3] [4] [5] these are deeply flawed premises.  Neither finance, reporting, or scenario planning will change climate, but the focus on regulating these will destroy Canada’s economy and foreign investment opportunities.

It is difficult to support an initiative such as that of ISSB, FRA Canada, CSDS and the Charter Professional Accountants (CCPA) of Canada.[6]  The proposed standards are not much different than those of the ISSB, so we refer you to our previous submission to the ISSB,[7] and would like to add a few items based on recent research.

Present Day Compliance Reporting on an Impossible Net Zero Future

The CSDS Standards would require corporations to submit future plans based on complex and costly analysis to reach a Net Zero goal.  The goal is clearly impossible with existing technology in the required time frame.  This would force corporations to make forecast of unknowable future technological breakthroughs. Even assuming continued technological progress, there isn’t a sufficient material supply chain for the technologies proposed. The CSDS Standards use climate scenarios which are deemed implausible, and transition scenarios that are unrealistic to address a climate risk represented by the implausible, but once claimed as ‘business-as-usual’ RCP 8.5 scenario.[8]

Please read our analysis of “Getting to Net Zero”[9] prepared by our director Ian Cameron, P. Eng. – evaluating the wildly exaggerated modelling of the Canada Energy Regulator’s transition plan versus the bluntly realistic assessment by the left-leaning Canadian Centre for Policy Alternatives (CPA). CCPA shows that the only path to Net Zero targets for Canada is extreme degrowth, deindustrialization, and the impoverishment of 40 million people.  A video explainer of Ian’s analysis is also available.[10]

Regarding the material supply chain for Net Zero, Prof. Simon Michaux has ‘done the math’ and demonstrates that such a supply chain does not exist. Robert Lyman, retired energy economist, has prepared a short overview report of Michaux’s work.[11]

Excerpt of Simon Michaux’s calculation of materials needed and supply chain delivery time to meet Net Zero, based on extrapolation from 2019 figures.

To Get Wind Power you Need Oil (and Gas and Coal)

The proposed CSDS regulations give an unfair advantage to wind operations and disadvantage oil/gas operations, but in fact, to ‘get wind, you need oil’ as energy expert Prof. Emeritus Vaclav Smil has noted.[12]  Indeed it is curious that major market players like Bloomberg New Energy Futures do not seem to be aware of this, as they write in their most recent 2024 Energy Outlook Report:[13]

A net-zero pathway hinges on renewables capacity tripling between now and the end of the decade.

Tripling renewables would lead to a quadrupling or more of oil, natural gas, and coal consumption for the mining, production, transportation, installation, maintenance and back-up of such facilities.  Mining presently represents 10% of world energy consumption.[14]  However, the present confluence of the CSB proposed reporting standards, the Bill S-243 climate-aligned finance, the changes to the Competition Act and the Charlie Angus NDP sponsored Bill C-372,[15] to prevent fossil fuel companies or advocates from publicly announcing the merits or benefits of the use of conventional fuels means that the necessary source of energy and product stream to make renewables will be demarketed, debanked or hit with massive interest rates – thus driving off investment in the very substances required for the Utopian ‘clean’ energy future.

Not only would that crater the advent of a future world intended to be powered by renewables, but it would also devastate Canada’s already weakened economy.  As Natural Resources Canada shows in its 2024 report,[16] Canada is a world-class energy producer and exporter.  The CSDS reporting and compliance standards simply hand the competitive advantage to our competitor nations for no public benefit, as is shown herein and below. No competitor nation employs such standards.  The burden and damage to energy operations vis a vis these CSDS standards would be significant; some companies, like Ovintiv (Encana) may simply leave. Decimating our energy sector would further damage Canada’s GDP.  What revenue would replace these sources?

In 2018, after Kinder Morgan, then owner/developer of Trans Mountain Pipeline Expansion (TMX), dropped tools and stopped work on TMX, PPHB Energy Bankers of Houston posted this note in their “Musings” newsletter, about the future of major industries in Canada:

How will additional, onerous reporting regulations like those proposed by CSDS make Canada attractive to investment?  It won’t.

Make Work Projects for ENGOs (many of which are foreign-funded)[17]

In other words, this appears to be one part make work project for many environmental non-governmental organizations (ENGOs), who will be called in as expert climate consultants to write up reports, and one part cash cow for large accounting firms; a headache for small accounting firms.  Small and medium-sized (SME) businesses will be crushed by the compliance reporting requirements and costs (as pointed out in our previous submission to the ISSB).[18]

Inherent Uncertainties Will Lead to Lawfare

At the same time, due to the vague nature of the reporting parameters and due to the unknown nature of the many future climate, commodity and technology changes, these very reports may open corporations to legal action or climate activists or shareholder lawfare; indeed also becoming a make work project for lawyers.

How is this in the public interest?  What constructive thing will the CSDS initiative accomplish for the Canadian economy?

Nothing but more operational chaos for businesses, the destruction of more small and medium-sized enterprises which will crumble under the financial and HR strain of reporting such details and all for the purpose of counting molecules, allegedly leading to the reduction of carbon dioxide emissions and the sustainability of materials.  With so much energy wasted in this accounting process, it is very unlikely such reporting will have any beneficial result.  It will likely use more energy than is saved, especially if there is a reliance on Artificial Intelligence (A.I.) to aggregate results.[19]

Indeed, such detailed reporting is an open invitation for competitors or Canada’s competitor nations to use such information to manipulate the prices or access to essential inputs and put Canadian companies out of business.

Align Policies with Largest, Friend-shored Trade Partners

According to the Canadian Chamber of Commerce,[20] our largest trading partner is the United States of America, which has rejected most of this form of reporting, especially Scope 3, and prefers voluntary over mandatory reporting.

As noted above, in testimony to the Canadian Senate, Mark Carney, former governor of the Bank of England and Bank of Canada made fatuous statements about Canada being a laggard among our peers on such reporting.  Neither the USA, Mexico, or China, our largest trading partners, have adopted such guidelines.[21] 

Indeed, based on various EU election results of June 9, 2024, it appears that there is a U-turn in public acceptance of Net Zero policies.

In Summary

Friends of Science Society categorically rejects the alleged need for CSDS reporting requirements based on the following:

  • Not supported by climate science as known today
  • Not aligned with UNFCCC standard of the ‘climate policy success’ RCP 4.5
  • Forcing companies to report on how they will achieve an impossible goal is not only an exercise in futility and a waste of corporate and public funds but is a case of absolutely greenwashing consumers and investors, the very thing such regulations claim to avoid.
  • Due to the ‘material change’ in our understanding of climate science and the status of global emissions (as per UNFCCC RCP 4.5), this would be forcing corporations to engage in fraud. We reported our views to the Canadian Securities Administrators in Jan. 2022.[22]
  • Thus, aside from the other lawfare issues noted above, additional legal liabilities for corporations reporting, using CSDS standards, as well as legal action against the FRA Canada, CSDS and potential the ISSB are quite likely.

We thank you for the opportunity to submit comments.


Ron Davison, P. Eng.

President, Friends of Science Society

[1] https://sencanada.ca/en/Content/Sen/Committee/441/BANC/56756-E

[2] https://blog.friendsofscience.org/2024/05/25/open-letter-to-senator-pamela-wallin-senate-banking-and-finance-committee/

[3] https://blog.friendsofscience.org/2023/07/31/open-letter-to-office-of-the-superintendent-of-financial-institutes/

[4] https://blog.friendsofscience.org/2023/12/22/collapse-catastrophe-responding-to-osfi-on-scse-climate-scenarios-exercise/

[5] https://blog.friendsofscience.org/2024/01/21/osfi-boc-discrepancy-between-unfccc-cop-scenario-baseline-and-that-of-the-standardized-climate-scenario-exercise-scse/

[6] CPA Canada claims on their website that: “The guiding principle and overarching objective of CPA Canada is enabling Canada’s accounting profession to serve and protect the public.” We test that claim and their support of FRA Canada/CSDS in this document.(bold emphasis added)

[7] https://blog.friendsofscience.org/wp-content/uploads/2022/11/ifrs-comments-for-submission-on-reporting-standards.pdf

[8] The Conference of Parties (COP) to the UNFCCC Agreement dropped consideration of the RCP8.5 scenario in COP26 (2021) and COP27 (2022). COP27 is working from a baseline temperature projection based on RCP4.5 (SSP2-4.5) of 2.5oC by 2100 …(once) regarded as climate policy success. https://www.budget.senate.gov/imo/media/doc/Dr.%20Judith%20Curry%20-%20Testimony%20-%20Senate%20Budget%20Committee.pdf 

[9] https://blog.friendsofscience.org/2024/03/15/getting-to-net-zero-in-canada/

[10] https://youtu.be/BCTSWChezX8

[11] https://blog.friendsofscience.org/2022/11/28/the-pursuit-of-the-impossiblematerials-constraints-and-realities-for-the-net-zero-utopia/

[12] https://spectrum.ieee.org/to-get-wind-power-you-need-oil

[13] https://about.bnef.com/new-energy-outlook/?utm_medium=Adwords_SEM&utm_source=pdsrch&utm_content=amer_bnef_neo_2024&utm_campaign=833878&tactic=833878&gad_source=1&gclid=Cj0KCQjwpZWzBhC0ARIsACvjWRMY8Hakk9j_J2ntIXyRQf1ENME0UiF8aEjkZIDVSHQKBgo-LXk_c2EaAgZhEALw_wcB

[14] https://www.theworldcounts.com/challenges/mining/energy-use-in-the-mining-industry

[15] https://theconversation.com/bill-c-372-banning-fossil-fuel-ads-does-not-go-far-enough-223715

[16] https://publications.gc.ca/collections/collection_2023/rncan-nrcan/M136-1-2023-eng.pdf

[17] https://blog.friendsofscience.org/2019/05/07/environmental-charities-a-compilation-of-reports-on-their-finances-power-and-implications-for-canada/

[18] https://blog.friendsofscience.org/wp-content/uploads/2022/11/ifrs-comments-for-submission-on-reporting-standards.pdf

[19] IEA reports – It states the AI industry in 2026 is “expected to have grown exponentially to consume at least 10 times its demand in 2023.”  https://globalnews.ca/news/10485677/artificial-intelligence-climate-change/

[20] https://chamber.ca/news/canadian-chamber-launches-canada-u-s-engagement-initiative/?doing_wp_cron=1718021652.5913219451904296875000

[21] Import/export data for Canada from World Integrated Trade Solutions shows the USA is our largest trade partner https://wits.worldbank.org/CountryProfile/en/Country/CAN/Year/LTST/Summarytext#:~:text=Canada%20top%205%20Export%20and%20Import%20partners%202021&text=Canada%20exports%20to%20United%20Kingdom,partner%20share%20of%201.30%20percent

[22] https://blog.friendsofscience.org/2022/01/17/climate-risk-reporting-an-exercise-in-greenwashing/