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ESG: Taking action is no longer an option

Tristan Oertli
ESG: Taking action is no longer an option

The year 2023 is officially the hottest on record in Canada, and forest fires, to name but one phenomenon, have already wiped out more than 18 million hectares in the country this year alone. This year will represent a regulatory watershed, particularly in Canada. These include Bill 25 on data management, Bill 29 on programmed obsolescence, and the modernization of selective collection in Quebec by 2025. Whatever the size of your organization, it's time to take action and move away from the famous “yes, but” attitude. What does a company need to integrate environmental, social and governance (ESG) principles? What are the levers that activate the motivation and commitment needed to launch a game plan?

What do we mean by ESG?

This is the fundamental question. “Environment”, “Social” and “Governance” represent the spectrum of all that is possible to do in terms of impact for a company and, therefore, to foster governance that is designated as responsible. In other words, the acronym ESG represents a set of formal criteria for assessing the risks and opportunities associated with sustainable development issues.

Environment Social Governance
GHG emissions Workforce and diversity Structure and roles
Waste management Health and safety Codes and values (ethics)
Water consumption Customer management Transparency and reporting
Biodiversity Communities Financial and other risks

ESG is often referred to as those criteria that are extra-financial, in the sense that they are not concerned with a company's financial performance or profitability, but rather consider a wide range of factors that will have an impact on all those who interact with the organization in one way or another.


We sometimes tend to confuse the terms CSR (corporate social responsibility) and ESG. Indeed, some will tell you that these two acronyms share many things, and that they are now used to mean the same thing. That said, the term CSR is much more widely used in Europe, while the acronym ESG is more widespread in North America.

ESG becomes essential, here and elsewhere

Regardless of the term used, there has been an explosion in the conversation around ESG principles in recent years, particularly in the media, but also among stakeholders. Indeed, more and more people along a company's value chain are talking about these topics, and over the years, ESG principles have become a must. Between 2017 and 2020, Quebec saw a 50% increase in assets held in socially responsible finance. Nevertheless, there is still work to be done, as our figures show that only 22% of companies surveyed publish a real ESG target with quantified objectives and an action plan.

Questioned by La Presse journalist Julien Arsenault, Geneviève Bouthillier, Vice-President, Mid-Market Private Companies at CDPQ Placements, was clear about the public's expectations of responsible corporate governance. I would be concerned about a consulting firm that didn't think about diversity, equity and inclusion,” she explains. She wonders how the same company could go about attracting the best talent if it failed to consider its impact on the environment. “If it has a blind spot on one of the important ESG factors, we're going to have a doubt.”

The ESG plan in business strategy

If it was still an option in recent years, integrating ESG elements into an overall business strategy is now mandatory. One example is employer branding. Here again, the figures from our studies in Quebec speak for themselves: 82% of employees say they feel personally concerned by environmental protection, and 75% of these consider it important for companies to implement equity, diversity and inclusion measures.

Clients such as Microsoft, Rio Tinto, Hydro-Québec and SmartCentres are just some of the companies that evaluate the ESG performance of their subcontractors before awarding them construction and manufacturing contracts, as mentioned in an article in La Presse. To name a concrete example in Quebec, the ESG team of general contractor Pomerleau, a giant in commercial and industrial construction in Quebec, has grown from a handful of people to over 40. Last year, the construction specialist decided to integrate its ESG report into its annual balance sheet for fiscal year 2022 - a practice not yet widespread in North America.

In conclusion

Will ESG be everywhere in the coming years? Environmental, social and governance principles will increasingly take center stage. In an interview with Les Affaires, Professor Étienne St-Jean of the Université du Québec à Trois-Rivières pointed out that “the more established an SME is, the greater the force of inertia. There's less interest in modifying the product to address social and environmental issues. Conversely, for those launching a new business, there's a need to stand out. Bringing a greener product adds value.” Surprising, you might say! In any case, principals, investors and customers will continue to put pressure on companies to change their practices.

So we can see that there's still a lot of work to be done to move from the “talk” stage to the implementation of a real, concrete plan.

To find out more :

ESG : Designing an action plan

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