WITTEVRONGEL: Small business should not suffer from new federal climate standards

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Every era has its characteristic corporate buzzword. The nineties had “synergy.”

Ottawa has been the latest to jump on the ESG bandwagon, committing in its latest budget to mandatory reporting of climate-related financial risk across a wide range of Canadian industries.Sign up to receive daily headline news from the Ottawa SUN, a division of Postmedia Network Inc.By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc. You may unsubscribe any time by clicking on the unsubscribe link at the bottom of our emails.

Should those ESG reporting requirements be adopted as is, publicly listed Canadian companies would be required to disclose all upstream and downstream greenhouse gas emissions, among other things. The company would then have to figure out and report on lifecycle emissions. That means suppliers, consumers, and disposal—from the place the iron ore was mined all the way to the buyer using that finished automobile, and on to the scrapyard where it ends up being recycled. These are “Scope 3 emissions.”Article content

For smaller businesses, though, this can be deadly, as they don’t have the means to pay an army of professional accountants to file reports for them. They typically can’t afford a compliance officer, much less an entire department, to do that sort of work. But once GM starts having to report Scope 3 emissions, it will need to get that data from its suppliers, and from their suppliers.

 

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