Climate change jumps into corporate agendas
Canadian firms face public pressure to develop a greener posture
VANCOUVER — Climate change is increasingly finding a seat in boardrooms across the country, putting greenhouse gas audits and environmental assurance on the corporate agenda as companies grapple with regulatory and public pressure to account for their environmental footprint.
At one time merely a question of public relations, “going green” has become a financial imperative increasingly mandated by regulation, and subject to a range of standards being used for both voluntary and regulated compliance.
“This is a very rapidly evolving field,” said Bruce McIntyre, leader of the sustainable business solutions practice at PricewaterhouseCoopers Canada. “Things are changing weekly, if not daily.
“There aren’t a lot of answers out there yet. It will be a busy year out there on that front, that’s for sure.”
The confusion is compounded by a maze of proposals and regulations, as well as provincial, federal and international input.
Most recently, the governments of Canada’s two largest provinces, Ontario and Quebec, signed an agreement this week for a cap-and-trade system, in which targets for greenhouse gas emissions come with a credit system. That system would allow companies that beat their emissions targets to trade their credits to businesses that come up short, cashing in on their environmental stewardship.
Alberta has its own offset system for greenhouse gas emissions, and British Columbia — which just passed its carbon tax on fossil fuels and has pledged a carbon-neutral public sector by 2010 — is engaged in the Western Climate Initiative with Manitoba, California and other U.S. states.
It all adds up to a great deal of potential work for the assurance specialists charged with the task of ensuring corporate reporting on the issue is accurate. For some, such as Vancity, it’s purely an ethical and branding decision as the credit union set a voluntary goal to become carbon neutral by 2010, and then beating that goal by reaching it already.
But for others, assessing and reporting has become a requirement as both provincial and federal governments begin to spell out greenhouse gas emission targets that will have to be met.
PricewaterhouseCoopers surveyed chief executives in Australia as that country shifted to its new carbon economy, and the study, called Carbon Countdown, found that while only eight per cent see climate change as a current “risk”, some 15 per cent see it as a risk within 12 months, and 29 per cent say it will be a risk in 2012.
McIntyre said he would expect similar results in Canada, where CEOs are dealing with many of the same issues.
“I would suggest Canadian circumstances are not much different than Australia,” he said.
The credibility of data, and whether or not the numbers are tested by an independent third party, becomes critical when money is at stake — whether it’s in the form of penalties or costs, in capital investment to comply with standards, or in the benefits that could come from selling credits.
Chris Ridley-Thomas, Canadian leader for KPMG’s sustainability services, said events are fast changing the requirements for businesses.
“Things have changed in the last year, a lot,” he said. “There are a whole bunch of different things going on, and one of the things is that regulators — while historically they may have used inspections as their primary mode of operations — they are now beginning to use audits.
“It can be done more costeffectively.”
The other factor, said Ridley-Thomas, is that environmental issues are high on the news agenda.
James Tansey, who holds the W. Maurice Young Chair in Business at UBC’s Sauder School of Business and is cofounder of the non-profit organization Offsetters Climate Neutral Society, said his organization does a fair number of audits with companies that will ultimately end up purchasing offsets from it.
“They have to do some level of auditing to show there is a real commitment there, that it isn’t just a marketing effort,” he said.
Tansey said “inventory” would be a more apt description than “audit”, and while there can be a price tag attached to going carbon-neutral, some companies can cut energy costs in the exercise.
“It is generally recognized that most companies that do an audit will find potential for savings,” he said.