By Carol-Ann Brown, President of The Delphi Group
Every year it feels like Labour Day flips the switch between summer holidays and getting down to business. No more backyard bbq get togethers, travelling to parts known and unknown, and keeping the kids occupied while school is out. This Labour Day is no exception and I’m eager to roll up my sleeves and make this stretch to the end of 2022 count. And by “count,” I mean really make some progress against our climate and sustainability goals before the end of the year.
To get us on the right track, I’m revisiting the seven sustainability and strategy tips I laid out this past January to see what’s changed, if some of my predictions were right, and how to prioritize efforts for the remainder of 2022.
- The new normal? It’s here.
In January I was referring to how the Covid-19 pandemic has changed the way we work and live. While much of the world seems to have returned to pre-pandemic behaviours, some changes seem permanent: hybrid working arrangements, for example. Some employees who can work from home do not seem in a rush to get back to the office – in fact, I know some companies that are mandating in-person returns for their employees, and they are struggling to hire people. At the same time, we know Zoom fatigue is real and there is tremendous relief at being able to be together in person again – the sold-out GLOBE Forum in March was a testament to that.I expect we will continue to reckon with finding the right balance between in-person and virtual for some time to come.
- Net zero is the story of 2022.
The daily stories of climate catastrophe and ever-more ominous warnings about our future can sometimes feel overwhelming. That’s when I remind myself of the progress we’ve made: an enormous uptick in governmental appetite to tackle climate change, with the groundbreaking legislation in the US being one shining (and gloriously surprising) example; hundreds of billions of dollars being invested into clean energy projects and technology; the fact that renewable energy costs less than coal and gas in many parts of the world; and the hot EV market.Plus of course there are the many, many organizations across all sectors that are steadily and steadfastly aiming for net zero. We’re seeing this engagement across a vast range of clients. We have a lot more to do AND the continued momentum is positive.What businesses should keep in mind as they head off on the road to net zero is (1) ensure your targets and commitments are credible, and (2) shift most of your focus to HOW you are going to achieve them — we need a lot more action to stand a chance of achieving our goals. Looking for a little inspiration? Check out CBSR’s Net-Zero Leaderboard and the Government of Canada’s Net-Zero Challenge.
- Underestimate consumers’ influence at your peril.
In January I talked about how voting with our wallets is going to play a big role in shaping what the future looks like. I stand by this, even with the impacts of inflation and the “R” word looming over all of us – in fact, one of the ways that people have addressed rising costs and complicated global supply chains is by embracing local businesses. I was at a farmer’s market the other day and one of the signs read, “Buy here and you’re supporting local families and communities.”Buying local has social, environmental and economic benefits and I expect this trend will continue – not only at the individual level, but at the country level. We’re seeing this in Europe, where countries are considering alternative energy partners in light of the war in Ukraine.One indicator that businesses are tuning in to consumers’ interest in all things sustainable is the growth in certified B Corps. B Corp is a designation that confirms an organization has met high standards of verified social and environmental performance – and is a way that consumers can distinguish between companies who are talking the talk vs walking the walk. The B Corp community (which includes Delphi and GLOBE) has more than tripled in the last few years, spanning 79 countries and 154 industries. They’re onto something.
- We are in the decade of innovation, get on board.
So there is good news and not-so-good news here. The good news: There is a record amount of investment going into cleantech, and there are a ton of funding vehicles for cleantech, many of them associated with our provincial and federal governments. This funding has been transformational in terms of helping Canadian innovators get their solutions off the ground.The not-so-good news is that we still have major issues with deploying these domestic clean technologies at scale. What do I mean by “at scale”? That these new clean technologies, processes and solutions become so ubiquitous that they replace the incumbent systems in every aspect of our built environment and the everyday items that surround our modern lifestyles.Why do we have these issues? . At the same time, while there is ample funding for early-stage innovation, there are concerns that our current system isn’t set up to spur the kind of transformational innovation needed to overhaul our economy.
Climate technologies need long lead times and large investment to test applications. While some VC funds are establishing longer funding timelines and working with many more partners to syndicate, the two things needed to scale and commercialize clean technologies are:
1 – buyers to adopt and deploy at scale/repeatedly, therefore bringing the cost down and improving the solutions, and
2 – follow-on financing from early-stage/government and VC funding.
By all accounts, the new US climate legislation is going to put octane in the tank of cleantech innovators down south. If Canada wants in on the trillion-dollar opportunity, we need to work across government, industry and investment silos to tackle commercializing long-lead-time and capital-intensive clean technologies.
- Show me the money? Show us your ESG.
It’s been a bit of a rough ride for ESG investing lately, with inconsistent ratings schemes and greenwashing claims making headlines. However, ESG isn’t going anywhere anytime soon. For example, just this week Desjardins became the first Canadian financial institution to announce that ALL new annuities purchased will automatically go into investments that meet strict ESG criteria. In Europe, Swiss Life Asset Managers announced the development of an ESG Renewal Infrastructure Fund of $750 million euros that will invest in unlisted clean-energy companies in OECD countries.Does the current backlash represent a market correction and will it force us to be more consistent and rigorous going forward? Yes, and that’s a good thing. With respect to ESG reporting, expect to see more alignment in terms of disclosure schemes versus more proliferation (watch for an upcoming explainer on the various ESG reporting programs). As the market matures, we will hopefully move past the noise and get on the same page when it comes to reporting – and, more importantly, get on with the business of doing well by doing good (and not just talking about it).
- What’s old is new again: Trading systems and offsets are back.
Back in January, I flagged that 2022 was going to be a big year for carbon markets, and that is definitely playing In July, the federal government released the Clean Fuel Regulation, which allows regulated entities to comply by creating or purchasing carbon credits. The government also launched Canada’s Greenhouse Gas Offset Credit System, which establishes a regulatory market for offsets.Our friends over at IETA – the non-profit, industry-led organization at the centre of the action on emissions trading – back up this bullishness: they have seen an almost 38% growth in membership in 2022 alone, and that membership is diversifying beyond regulated entities to organizations in finance and tech, for starters. The EU market is still going strong, generating billions in Euros in auction revenues.The voluntary offsets market is getting more airtime recently, though not always for its positive contribution toward reducing emissions. As in the case of ESG investing, these are likely growing pains that will be smoothed out as the market matures. My advice to you to avoid greenwashing claims: ensure you have a credible emissions reduction plan, consider robust standards such as SBTi when setting net-zero targets, and purchase offsets that are developed in line with credible criteria.
- Let’s get personal.
In January, I talked about how culture is queen and the importance of building workplaces around justice, equity, diversity, and inclusion (JEDI) principles. If anything, this is even more important now than it was a few months ago. Attracting and retaining good people is a gargantuan challenge for most businesses right now – I have never seen so many “help wanted” signs or had so many conversations with clients about how hard it is to find staff. In addition, talk of the “Great Resignation” seems to have morphed into a conversation about “quiet quitting,” where it is being reported that employees stop going above and beyond in order to manage their pandemic-related burnout and pursue interests outside of work.We’re lucky in that the work we do is very much grounded in our purpose to build a better future. If you can find your purpose, that is a real differentiator in today’s labour market: when people care about and are invested in the work they’re doing, they are more inclined to put in extra effort when it’s needed.We certainly don’t get everything right all the time by any means, but we are always asking ourselves whether we’re supporting our people do the things they’re most passionate about. Transparency and respect are also key – all you need to do is look at recent headlines to see what happens when your behaviour isn’t guided by these principles. Remembering that our team members pick us as much as we pick them helps us stay focused on the right things.
My kids came home with homework the first day of school, and I feel like I have a similar set of commitments as we turn the page from summer to fall. We have a lot at stake, and together it’s time to roll up our sleeves and get’er done.
Carol-Ann Brown is President of The Delphi Group. Do you have ambitions for a better future? Then we want to work with you. For more information on how The Delphi Group can help you meet your corporate sustainability, net-zero, and ESG goals, contact us.