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Amid efforts to overcome the challenges caused by COVID-19 and climate change, the conversation about modernizing Canada’s economy and strengthening the relationship between people and business has intensified, said Brian Gallant, former premier of New Brunswick and co-author of the Global Canada report.James West/The Canadian Press

A new report is asking Canadian companies to think about purpose instead of just profit.

Global Canada, a Montreal-based non-profit dedicated to enhancing the country’s role on the world stage, has issued a public call to Canadian companies, urging them to embrace social and environmental policies or risk being left behind.

“This should be a huge wake-up call for any corporate executive or any board member who thinks that they can paper over the problem of making profits at a cost to society’s well-being,” said Robert Greenhill, co-author and chair of Global Canada. “This is real, and it’s going to get more real every month.”

The report’s key recommendation is that every Canadian business should have a clear purpose beyond making money. It also recommends Canadian businesses make time-bound public commitments on achieving social and environmental goals, take a greater leadership role in global initiatives and align with the United Nations’ Sustainable Development Goals. The UN goals consider 17 key issues, including poverty, education, gender equality and climate action.

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Ninety prominent Canadians were interviewed for the report, including former governor-general David Johnston, Canadian Chamber of Commerce president Perrin Beatty, Senator Hassan Yussuff, deputy federal finance minister Michael Sabia, and the former president of the United Nations Association in Canada, Kate White.

Some of Canada’s most prominent business and association executives also participated, including the heads of Siemens Canada, Cogeco Inc., Suncor, McCain Foods, Hydro-Québec, Desjardins Group, Nutrien and Unifor.

Amid efforts to overcome the challenges caused by COVID-19 and climate change, the conversation about modernizing Canada’s economy and strengthening the relationship between people and business has intensified, said Brian Gallant, former premier of New Brunswick and co-author of the report.

“There’s a movement afoot,” Mr. Gallant said. “Canadian businesses should step up for moral reasons, but also for economic reasons. If they don’t they’re going to have some challenges over the months and years to come.”

At a time when business leaders are feeling more pressure to generate wealth, Mr. Greenhill said, this report is a reminder that there is a strong business case for environmental and social governance (ESG) – and part of that comes from the younger generation.

Big investors lack confidence in ESG promises

“When we were asking executives, the greatest source of pressure to move on ESG wasn’t customers, it was employees,” Mr. Greenhill said. “As this younger generation of Canadians takes on more power as voters and investors, simply making profit, while essential, is no longer sufficient.”

According to Olaf Weber, University of Waterloo’s Research Chair in Sustainable Finance, companies often see the development of ESG policies as a risk-mitigation tactic.

“It’s less to do good, and more a realization that if they don’t address these issues, they will lose clients, have slower sales and have a worse reputation,” Prof. Weber said.

However, he adds that Canadian companies have shown a weak performance when it comes to reporting on their environmental commitments.

Indeed, Canada has been criticized for being among the world’s largest emitter of greenhouse gasses. A recent report produced by the Hot or Cool Institute, a Berlin-based sustainability think tank, showed that Canada is lagging when it comes to reducing its carbon footprint. Of 10 countries representing a range of economic models, the report found that Canada had the worst emissions per-capita. Notably, the United States and Australia, also high emitters, were not included in the report.

Nonetheless, 60 per cent of the respondents from the Global Canada report named climate change as the most pressing issue facing Canadian businesses.

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