The Canada Climate Law Initiative provides businesses with climate governance guidance so they can make informed decisions towards a net-zero economy. We meet with boards of directors to supplement their awareness of their fiduciary duties and best practices for managing climate-related financial risks.

Through our collaboration with two of Canada’s leading law schools – the Peter A. Allard School of Law at the University of British Columbia and Osgoode Hall Law School at York University – we stay on top of the latest policies so we can help businesses cut through the noise of fast-changing legislation.

We have unique insight into legal, financial, and reputational risks for Canadian companies in a wide-range of industries, and see that there is heightened pressure on boards of directors to embed climate risk in their oversight. This pressure is coming from various stakeholders including: 1) government and regulatory bodies, 2) investors, 3) litigants, 4) management, as well as 5) customers, employees and the general public. We provide an example of each below.

1) Climate disclosure requirements are increasing

The Office of the Superintendent of Financial Institutions mandate federally regulated financial institutions to report their climate-related financial risks, starting in 2024.

The Canadian Securities Administrators and the US SEC have proposed a national instrument and rules on climate disclosures.

2) Investors are asking for climate data

Large institutional investors are moving first. They have net-zero targets and interim targets in their lending and portfolio.

168 investors, with US $17 trillion in asset under management, urge 1,320 companies to disclose environmental data.

3) Climate litigation is increasing

Climate change litigation continues to grow in importance year-on-year as a way of either advancing or delaying effective action on climate change. As the number of cases continue to increase, two notable examples include:

• A Dutch court ordered Shell to reduce 45% of its overall emission by 2030.
• Keurig Canada has been ordered to pay $3 million penalty for misleading consumers about the recyclability of its single-use plastic.

4) The time is rife to be a climate leader

In a survey conducted in 2021, Deloitte Global found that 89% of executives agreed there is a global climate emergency. 73% of leaders are taking action as part of their sustainability efforts and 82% plan to achieve net-zero carbon emissions by 2030 or before.

More than 100 CEOs and senior executives from global companies, all members of the Alliance of CEO Climate Leaders, are pushing the private sector to join them in setting science-based targets, collaborating within and across sectors to drive climate action, and contributing to the development of internationally harmonized reporting standards. They are also pushing government leaders to be bolder to accelerate the transition.

5) Consumers are increasingly demanding companies to address climate issues

The 2021 EY Future Consumer Index Survey revealed that 69% of Canadian consumers expect companies to solve sustainability issues and 61% of consumers plan to pay more attention to the environmental impact of what they consume. It’s time for companies to listen to their demand.

So, how to prepare?

If you’re wondering what this blog post means for your company, consider inviting one of our experts to your next board meeting. Thanks to the support of five family foundations and experts who give their time pro-bono, we are able to offer these confidential presentations free-of-charge. Learn more and schedule a meeting with our team today.