In Environmental, Social, and Governance (ESG) framework, the E, the S, and the G each have an owner. In Canada, that owner is increasingly the general counsel. ESG for the general counsel in Canada is no longer a sustainability team problem, as the obligations are legal and the liability becoming more real.
What ESG means for the Canadian general counsel today
ESG has three letters, but only one has been a clear legal obligation for most of Canadian corporate history. While the “G” lives in corporate and securities law, the “E” and “S” are catching up.
Under Canadian securities legislation, there is no stand-alone ESG disclosure rule for most public companies. What exists is the materiality obligation: disclose anything that would likely influence a reasonable investor’s decision to buy, sell, or hold a security.
The Canadian Securities Administrators (CSA) has confirmed this applies to environmental and social information.
For general counsel, this means:
- disclosure risks: ESG exposure (e.g., climate, supply chain, modern slavery) is a legal liability, and not just a reputational one
- civil liability: voluntary sustainability reports are not exempt; material misrepresentations can be actioned
- regulatory risk: the CSA has warned against unbalanced or embellished environmental claims in public-facing documents
Check out this webinar that addresses questions about ESG and the role of the Board:
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Governance structure, and how to keep your board informed
The governance part of ESG is where the general counsel role becomes most visible.
Carlton Mathias, the Chief Legal, ESG and Governance Officer at Ontario Power Generation (OPG), built a fourth standing committee of the board in 2014 to oversee its $13 billion Darlington Refurbishment Project. Monthly reports went alongside quarterly meetings, and an independent review board of nuclear and mega-project experts from Canada and the US conducted three site visits a year.
“Each report had findings and actions to be taken,” Mathias says. “And then, come to the next committee meeting, progress on those actions had to be reported.”
That structure has evolved into OPG’s Major Projects Committee, overseeing the Small Modular Reactor (SMR) project and the Pickering refurbishment.
Managing legal risks for ESG, and not just avoiding it
The general counsel who only says no is not the one Canadian organisations need for ESG.
Mathias is direct. “The old model and the old stereotype of lawyers only putting up red flags and telling people to go slow… that is not the way to succeed in a modern competitive world where there’s a huge demand for infrastructure build-out,” he says. “Time is not on our side, so we need to take risk, but it needs to be informed.”
At OPG, legal risk sits inside the enterprise risk management policy. In-house lawyers and external counsel build plans together and work them down until risks are retired.
In sum, in-house teams can act on three things:
- assess legal risk early and continuously, not just at decision points
- treat external counsel as partners with institutional knowledge
- separate risks that can be mitigated from those that are genuinely prohibitive
When the regulatory ground for ESG shifts under you
In April 2025, the CSA paused two projects, citing the changed global economic and geopolitical landscape:
- a new mandatory climate-related disclosure rule
- proposed amendments to diversity-related disclosure
What the pause does not change are the following:
- the baseline materiality obligation to disclose climate-related risks remains in force
- existing diversity disclosure for non-venture issuers under National Instrument 58-101 still applies
- the Competition Act greenwashing provisions added in 2024 are unaffected; as of June 20, 2025, private parties can seek leave from the Competition Tribunal to bring actions, with significant monetary penalties available
The pause is not a green light to stop disclosing. This means that the floor is holding while the ceiling gets redesigned.
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