In Canada, reporting on environmental, sustainability and governance (ESG) has so far been done on a voluntary basis, by businesses eager to burnish their brand as a sustainable one. As a result, the processes for both tracking and mitigating environmental impacts are, on the whole, less rigorous in Canada than in regions more progressive on sustainability regulations.
However, regulations are coming. By 2024, the federal government will begin to require eligible banks, insurance companies and financial institutions to provide ESG disclosures on their climate-related risks. Although the guidelines are focused on financial services organizations, these firms play a prominent role in shaping the entire economy through their lending and investment. Because the “financed emissions” attributable to this lending and investment will need to be included in the new disclosures, financial institutions will need to collect sustainability data from their clients, which will require those businesses to formalize their own climate-related disclosures.
In this way, the regulations will produce a domino effect, in which Canadian businesses will need to understand and report on not just the sustainability impact of their own internal operations but also in their wider value chain.
That’s why—rather than wait for these regulations to hit—businesses should learn from their counterparts in other regions and begin understanding what it takes to not just report on sustainability impacts but also show progress toward their goals. In partnership with Oxford Economics, we surveyed 3,000 executives, including 262 in Canada, and found that the biggest challenge will be ramping up intensity around data-driven initiatives. This includes identifying what data to collect, automating its collection, working with clients and partners to provide accurate data, and determining the best options for mitigation.
We’ve developed five recommendations to help Canadian businesses overcome their data challenges and outperform their markets by embedding sustainability at their core.
#1 Boost sustainability investments to realize full business value