On October 27th, 2010, the Canadian Securities Administrators (CSA) published Staff Notice 51-333, Environmental Reporting Guidance to assist reporting issuers in meeting their existing continuous disclosure requirements under securities laws with respect to environmental matters. The Notice, as described by Jean St-Gelais, the National Securities Council's chairman, is intended to help issuers assess which information must be disclosed on material environmental matters.

This guidance document addresses needs arising from increased investor interest in environmental matters and the impact of these matters on the performance of the organization as a whole. Traditionally, environmental disclosures have been through voluntary reporting, in which the content can be highly generalized, not consistent or standardized, and not integrated into financial reporting. This guidance document helps to address these issues for the investor community.

The Notice provides guidance in the following areas:

1. Materiality: Materiality, in the case of a known environmental trend, demand, commitment, event or uncertainty should have an analysis of the probability and magnitude of the impact/ risk.
2. Environmental risks and related matters: The Notice highlights the continuous disclosure of five types of environmental matters and specifically for the last two matters that the issuer include a quantified cost, if the information is reasonably available or is material to investors:
   • Environmental risks (defined as: litigation risks; physical risks from industrial contamination, climate change, and water availability; regulatory risks, both domestic and foreign, such as environmental permits, reporting requirements, carbon pricing systems and trading systems, energy efficiency standards, and building codes; reputational risks; and risks to the company's business model due to legal, technological, political, and scientific developments);
   • Environmental trends and uncertainties;
   • Environmental liabilities;
   • Asset retirement obligations; and,
   • The financial and operational effects of environmental protection requirements.
3. Environmental risk oversight and management: The guidance document also discusses disclosing environmental policies and board governance practices in order to determine the issuer’s due diligence around environmental risk. Specifically, the issuer should disclose the Board of Directors’ responsibility and management of these risks and any committee responsible for them.
4. The impact of International Financial Reporting Standards: As of Jan. 1, 2011, reporting issuers will be required to use IFRS. The guidance document describes the impact of this on disclosing environmental liabilities; for example, issuers will be required to disclose more environmental liabilities & accrue them in higher amounts.
5. Forward-looking information requirements relating to environmental goals and targets: Goals and targets, if material, may be considered forward-looking information and would be subject to the applicable disclosure obligations.
6. Governance structures for ensuring compliance with Continuous Disclosure requirements: There is guidance provided on governance structures so that there is appropriate oversight from Audit Committees and Boards of Directors.

By Steven Pacifico, .(JavaScript must be enabled to view this email address)