Getting To Net Zero: An Assessment Of 20 Canadian Companies, Their Climate-Action Plans, And How They Communicate Them

According to recent research released by CPA Canada and Deloitte, an increasing number of companies are disclosing net-zero carbon emissions targets (net-zero targets) to demonstrate their contribution toward mitigating the impacts of climate change. “These targets are driven by mounting pressure from investors, regulators, government bodies, and consumers, who are becoming increasingly aware of climate change and the systemic risk it poses to our society and the economy.”

Climate change, says Getting to Net Zero, “presents many risks that impact how Canadian companies operate. As such, they may need to transform their business models to reduce emissions through measures such as investing in renewable energy and carbon-capture storage solutions, decommissioning old assets, increasing spending in energy efficiency programs, and practising sustainable land and resource management. The changing regulatory landscape and multitude of voluntary sustainability reporting frameworks have created diversity in how climate-related data (including details on net-zero commitments) is reported in Canada and globally.”

To better understand the Canadian landscape, Chartered Professional Accountants Canada (CPA Canada) and Deloitte reviewed published documents from 20 Canadian public companies across several industries to understand their net-zero commitments and transition plans, as well as the extent of the disclosures that accompany them.

According to some of the results:
• 65% disclosed net zero targets;
• 60% have established long-term, forward looking transition plans;
• 35% have plans or targets aligned with the Paris agreement;
• all disclosed a general GHG target (i.e., either reduction or net zero);
• emission baseline and target years vary;
• 60% disclosed interim targets;
• 70% have established a specific board committee responsible for overseeing transition;
• the level of detail in transitions varies;
• net-zero disclosures found across various documents are presented in various formats.

This research suggests “room for improvement in current net-zero disclosure practices. Based on the disclosures, it was difficult to compare net-zero targets among companies and evaluate progress toward meeting them. In addition, action plans included varying levels of detail as to how net-zero goals would be achieved. Forward-looking information is a challenging area and preparers would benefit from additional guidance to enable clear, consistent, and comparable disclosures around net-zero targets. This research is intended to enhance discussion around this important subject area and identify opportunities for companies to improve disclosure of their net-zero targets.”

For the important details, you can download the research paper at 02869-RG-Getting-to-Net-Zero.pdf.