• Environmental Responsibility:
  
  Many companies want to demonstrate their commitment to sustainability and environmental stewardship. Reporting their carbon footprint voluntarily shows they are actively working to reduce their impact on the environment.
• Reputation and Brand Image:
  
  Transparency in carbon emissions can enhance a company's reputation and strengthen its brand image. Consumers, investors, and other stakeholders increasingly value corporate responsibility and sustainability.
• Regulatory Preparedness:
  
  Engaging in voluntary reporting can help organizations prepare for future regulations. It allows them to establish practices and understand their emissions profile before mandatory reporting becomes required.

• Competitive Advantage:
  
  Companies that lead in sustainability practices can differentiate themselves from competitors. Voluntary reporting can signal leadership and innovation in environmental management.
• Investor Relations:
  
  Investors are increasingly considering environmental, social, and governance (ESG) factors in their decision-making. Voluntary carbon reporting can attract investment by showing that a company is managing its environmental risks and opportunities responsibly.
• Operational Efficiency:
  
  The process of measuring and reporting carbon emissions often leads to identifying inefficiencies and areas for improvement. This can result in cost savings and more efficient operations.

• Stakeholder Engagement:
  
  Voluntary reporting can improve engagement with stakeholders, including customers, employees, and communities, by demonstrating a commitment to reducing environmental impact
• Benchmarking and Goals:
  
  Reporting allows organizations to set benchmarks and track progress over time. It helps in setting realistic carbon reduction goals and measuring achievements against them.

The ISSB (International Sustainability Standards Board) disclosure proposals IFRS S1 and IFRS S2 are part of a broader initiative to enhance transparency and consistency in sustainability reporting. These standards are designed to provide investors and other stakeholders with relevant information about a company's sustainability performance and risks.

ISSB standards will not automatically apply in Canada, given the ISSB doesn’t have jurisdiction here. However, it will likely impact Canadian companies operating in foreign jurisdictions

IFRS S1 sets out general requirements for the disclosure of sustainability-related financial information and IFRS S2 focuses specifically on climate-related disclosures.

The Office of the Superintendent of Financial Institutions (OSFI) in Canada has drafted Guideline B-15, initially focused on Federally Regulated Financial Institutions but likely to broaden in scope over time to capture large organizations and eventually small and medium enterprises as well.

Financial institutions will be required to disclose not only their own carbon footprint but also that of the customers within their portfolios. In this case, small and medium sized businesses may indirectly feel the impact of Guideline B-15 by having to demonstrate their sustainability plans to their bank or lender.

Large businesses may also require carbon footprint data from small businesses in the form of an Environmental Product Declaration (EPD) to support their own reporting requirements. If not prepared,a business could potentially lose this business.

Businesses operating outside of Canada, regardless of size, may find themselves subject to sustainability reporting requirements of those foreign jurisdictions.

Examples include the Corporate Sustainability Reporting Directive (CSRD) in Europe, effective January 2024 and the California Global Warming Solutions Act.