Canadian companies, once leery of the costs and headaches of dealing with climate change, now realize that it may provide a significant business opportunity.
Many firms now sell products to deal with climate-change issues, save money by cutting energy consumption or use their new-found environmental awareness as a marketing tool, according to the latest survey of Canadian businesses being released Wednesday by the Carbon Disclosure Project.
Companies that don’t take this approach risk being left behind, missing key business opportunities in the years ahead.
The recent survey of 108 large Canadian companies is part of the annual worldwide study conducted by the non-profit CDP on behalf of more than 500 institutional investors. Over the past decade, the group has cajoled more and more global firms to disclose their policies and initiatives related to climate change and water usage.
More than half of the companies that responded to the survey said they sell at least some products or services that help clients reduce greenhouse-gas emissions. At the same time, more than 85 per cent said they have a program in place to reduce their emissions – usually by cutting energy use in their buildings or plants.
“Large organizations … are seeing climate change as a business imperative that needs to be dealt with,” said Zoe Tcholak-Antitch, North American director of CDP. “Climate change represents the first-ever predictable industrial revolution, and I think a lot of companies are really beginning to see that.”
As pressure builds from investors and customers to make sure corporations are environmentally sustainable, other firms throughout the supply chain will see this as a great opportunity for “carbon-friendly” products, Ms. Tcholak-Antitch said.
About three-quarters of Canadian companies surveyed said they are now integrating climate change into their business strategies. For example, many energy companies are shifting into renewable energy projects, such as solar and wind farms, as an addition to their fossil fuel business. This helps them reduce their overall emission intensity while giving them a foothold in technologies that may displace their traditional businesses in the future.
About 85 per cent of the companies that responded said they have managers or board members who are responsible for climate change initiatives. Only about one-third, however, have dedicated budgets for energy efficiency or emission reduction activities.
At Edmonton-based architecture and engineering firm Stantec Ltd., environmental issues have become central to the company’s operations, said Marty Janowitz, vice-president of sustainable development. Environmental considerations affect both how the company operates internally, and how Stantec does its work for clients, Mr. Janowitz said. The issue is also crucial in recruiting staff, many of whom insist they will only work for a “green” company, he said.
Over the past few years, the approach to environment issues has changed greatly, Mr. Janowitz said. Now, “it has to be core to your strategy, not a satellite activity.” That has happened “despite a very uncertain policy environment,” he added.
Indeed, many of the respondents to the CDP survey suggested that Canada’s murky environmental policy generates risk for corporations. Provinces have inconsistent rules, and Ottawa has not defined its climate-change policy or set up a promised cap-and-trade system.
Many companies said cap-and-trade regulations could provide a significant market opportunity, because they might be able to sell carbon credits they generate.
QUALITY OF DISCLOSURE
The Carbon Disclosure Project, a non-profit entity set up by hundreds of global institutional investors, ranks companies on the quality and comprehensiveness of their disclosure on climate-change issues.
Suncor Energy Inc. is at the top of the list of Canadian companies this year. For many years it has released an annual “sustainability report” describing its environmental and social performance.
Gordon Lambert, Suncor’s vice-president of sustainable development, said it helps that institutional investors now make a single request for disclosure through the CDP. “We want to be transparent on our efforts, but ideally [we’d like to]report once and have it meet the needs of multiple end-users,” he said.
The top five in Canada:
- Suncor Energy Inc.
- Newmont Mining Corp.
- Bank of Montreal
- Ritchie Bros. Auctioneers Inc.
- Barrick Gold Corp.
The largest companies that did not respond to the survey:
- TransCanada Corp.
- Power Financial Corp.
- Ivanhoe Mines Ltd.
- Fairfax Financial Holdings Ltd.
- Valeant Pharmaceuticals International Inc.Report Typo/Error