3 Reasons Canada's Sustainability Standards Must Change
Highlights
In 2021, Canada's government announced they would change their sustainability standards. By 2023, Canada is positioning themselves at the forefront of ending fossil fuels funding.
Canada's efforts are undercut though by the fact that the government still funds fossil fuel expansion domestically. That much is clear by their own sustainability standards and direction. Even other countries and international boards can see that.
Efforts to stomp out domestic funding of fossil fuel and gas expansion is a bigger challenge. In Canada, there is unrest, but the oil and gas industry has a lot of money and power.
All across the world, countries are developing their own sustainability standards and developing labelling systems to accommodate new and veteran investors alike. While this will add more uniformity to ESG funds and sustainable investments as a whole, some countries are taking unique approaches to their labelling system.
In 2021, the Government of Canada decided to take the initiative and create its own system, recruiting individuals to form an advisory council that they can consult. At the time, it felt like the system would show promise where the country would offer sustainable investments to consumers looking to delve into the world of sustainable investing.
The only problem was that the council consisted of only financial experts.
In other words, none of the council representatives that were meant to guide the government towards sustainable targets and goals had any knowledge on what would be sustainable.
Fast forward to 2023, and the government promised in their Fall Economic Statement that they’d move forward with what the council advised the government to do with no amends to the original plan.
Why This Plan Is Nothing But Sustainable
The glaring issue comes down to the council itself. With no one in the room with an understanding of climate change and what to do, the council focused on vehicles and strategies that don’t address that problem.
One of the biggest example is marking CCUS and specific techniques of oil and gas expansion as sustainable practices.
While carbon capture, utilization, and storage (CCUS) is better slightly — it can reduce a plant’s net emissions by 10 to 11 percent — it’s undercut by allowing the mining and oil companies free rein to keep business going as usual through oil and gas expansions.
Even though Canada has been leading the charge for internationally ending the financing of fossil fuels, the same can’t be said domestically. That much is clear from the council itself, which continues to reinforce that Canada is willing to deal with its own oil and gas companies, something that the International Institute for Sustainable Development (IISD) points out.
What These New Sustainability Standards Look Like In Practice
This willingness goes as far as leaving massive loopholes for oil and gas companies in Canada to exploit. In practice, oil and gas companies are able to take out “sustainable” loans and use those to expand fossil fuel production rather than work to transition to cleaner energy.
The lack of transparency and accountability allows for these companies to greenwash their way to massive funding. Worse, these are viewed as sustainable since those same companies promise to use some of those funds to reduce emissions during production, an act that isn’t all that sustainable, nor effective on a large scale.
These Sustainability Standards Only Work To Alienate
All around the world, investors are making efforts for corporations to take sustainability seriously. In April, shareholders rejected Woodside Energy’s climate plan in droves. This is on top of shareholders starting to vote against corporate directors as responses to address climate change are falling short.
The only issue in Canada in particular is oil and gas companies have a lot of money. Beyond that 164 countries are already adhering to international standards for sustainability disclosures, allowing international investors a healthy enough alternative to invest in.
This is only going to make Canada lag behind when it comes to sustainability standards as investors will put their money towards more robust systems. Meanwhile Canada continues to drag its feet with large oil and gas firms and the Big Five banks not willing to support green initiatives.
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