Next steps for Canadian organizations in the journey to net-zero
In March 2022, the Government of Canada released its long-awaited Emissions Reduction Plan (ERP), marking a significant milestone in outlining how it intends to meet its 2030 greenhouse gas emissions targets as it progresses towards its 2050 net-zero ambition. PwC Canada’s Elliott Cappell, Shelley Gilberg and Daniel O’Brien recently shared their perspectives on the ERP and some of the key highlights for Canadian organizations.
Read their blog post to learn more about what it means for your organization.
Organizations are under pressure from shareholders, investors and customers to move beyond setting net zero targets. There’s a growing expectation of concrete transition plans, transparent reporting as well as increased leadership—and accountability—from the C-suite. In short, stakeholders are demanding real progress.
These raised expectations mean that even those organizations that are currently net zero leaders risk falling behind without a credible approach to tackling their decarbonization challenges.
The answer will vary between organizations, depending on the different stages of their journey. Net zero leaders have interim targets and a clear plan to decarbonize—which, in some cases, is validated by the Science Based Targets initiative. Others are earlier in the process and are working to improve their understanding of their own emissions as well as those scope 3 emissions from their suppliers, products, services, investments and other elements of their value chain. Meanwhile, some organizations are still in the earliest stages of establishing their greenhouse gas inventories.
Elsewhere, investors of all sizes are considering where they can find opportunities in the transition to a low-carbon economy. They are also measuring the emissions associated with their investments—known as finance emissions—and how those emissions affect their overall net zero goals.
Advancing on these and other goals is best achieved by viewing net zero as a key part of an organization’s broader environmental, social and governance (ESG) identity. Organizations will have different starting points on their ESG journey, depending on their mindset and maturity. But creating impact through ESG involves rethinking all dimensions of your business by creating a strategy-led plan, transforming operating models and measuring for transparency and accountability.
Taking stock of what’s driving your net zero ambitions will help inform your strategy. Armed with these insights, organizations can turn net zero commitments into business transformation plans. A decarbonization blueprint, guided by building blocks and checklists of key actions, can provide a roadmap for organizations to move from net zero aspirations to implementation.
Build a credible and leading net zero ambition aligned to the achievement of global net zero emissions by no later than 2050, consider the whole value chain, and be supported by a science-based targets approach.
Strong governance ensures accountability for net zero is driven throughout your organization, starting from the top. Frameworks should be in place to enable decision making on the basis of meeting your long-term net-zero ambition.
Your net-zero strategy is critical to determine how to grow profitably while maximizing value and resilience. It requires an understanding of the associated transition risks and opportunities within the next one to two business cycles and beyond as well as how to minimize value destruction and unlock value creation.
Create a transformation program to execute the strategy and embed net zero into corporate structures as well as business functions and capabilities. This change effort will include realizing quick wins and, in parallel, work on longer-term operating model changes.
Enable and support emissions reductions at all levels of your supply chain to achieve net-zero transformation. An important element will be the evolution of traditional supply chains toward a connected, smart and highly efficient supply chain ecosystem.
Adopt existing low-carbon technologies at scale, and develop innovative new solutions and processes—many of which are at the R&D stage or other early phases of demonstration and commercialization. Companies need to invest heavily and build innovation into their ways of working.
Embed net-zero value creation and erosion considerations across all corporate finance functions including operations, financial planning, business strategy and development, facilities, corporate venture investing and treasury. Additionally, organizations can optimize outcomes by aligning their tax strategies and structure, factoring in tax credits, incentives as well as tax policy changes across the globe.
Provide transparent and balanced reporting on progress against your net-zero ambition, including your pace of business transformation and strategy implementation as well as progress against KPIs, including actual emissions reductions achieved.
Engage and influence stakeholders across a variety of ecosystems to deliver emissions reductions at pace and scale, and create the enabling conditions for an accelerated transition.