Undoubtedly, the way of the future for Canadian companies will be to adopt business practices that help reduce their carbon footprint and improve the environment. Some of this will be in response to consumer interest. But the majority of businesses believe it's up to government to create this behavioural shift.

Indeed, 94% of Canadian executives surveyed in the recent PricewaterhouseCoopers (PwC) report Appetite for Change, expect to change the way they do business over the next two to three years because of climate change, with a third of respondents (34%) saying there will be significant changes to their business.

But while more companies are touting their environmental achievements and adding eco-friendly merchandise to their product lines to reap the benefits attained through sustainable business practices, the majority of Canadian companies still prefer to take a backseat approach in the fight against climate change.

Responsibility for Change
The environment is a significant area of concern for the majority of Canadian businesses. According to PwC’s report, the top environmental issues that Canadian companies anticipate will have the greatest impact on the way they do business in the next two to five years are: reduction of emissions (14%), energy efficiency (12%) and climate change/global warming (12%).

Interestingly, while the majority of Canadian companies say climate change is currently an issue for them, they don’t think the onus is on business to invoke widespread change. Instead, the majority (60%) believe the primary responsibility for a behavioural shift against climate change should belong to the government, compared to just 6% who think that business should lead the issue and 24% who indicated the responsibility should be shared between government and business. These results demonstrate that while Canadian executives recognize the environment will increasingly impact their business, they prefer to wait on government to create enough motivation for change before altering their environmental practices.

Moreover, the study also found that the majority of Canadian executives (70%) don’t believe the current government policy for climate change is effective in encouraging businesses to significantly change their environmental behaviour. Even more Canadian respondents (72%) don’t feel the current policy is effective in providing clear and consistent signals to businesses on the need to assess their environmental impact and energy usage.

Incentives to Change
The most effective method called out by the business community for enticing them to reduce their impact on the environment is an approach with a combination of carrot (tax incentives) and stick (regulation, tax charges).

Our study found that as far as current government incentives are concerned, the majority of Canadian businesses believe they aren’t enough to motivate them to change their environmental practices. Moreover, more than half (52%) of Canadian respondents said that meeting the criteria for current tax incentives is too onerous to make them worth applying for.

Instead, an overwhelming majority (90%) of Canadian companies believe the government needs to offer more incentives to support investment in environmentally-beneficial activities, processes and new technologies to help achieve targets on greenhouse gas emissions. 

Time for Change
What’s clear is that there is an appetite for change among our nation’s businesses to adjust their environmental practices, but the majority are waiting on government action before making significant changes.

However, regardless of whose responsibility it is to lead the charge against climate change, the issue will certainly remain a hot topic for both business and government in the immediate future. What’s needed from both parties is a long-term commitment to tackling climate change that may only be sparked by new government tax incentives and strengthened climate change regulations.

For more information or to read the Canadian summary of the Appetite for Change report, please visit: www.pwc.com/ca/appetiteforchange.

Key Findings
Key Canadian findings of the PricewaterhouseCoopers LLP (PwC) report Appetite for Change, a review of international business community attitudes toward climate change, include:

• A majority of 94% of Canadians surveyed expect to change the way they do business over the next 2-3 years, with a third of respondents (34%) saying there will be significant change compared to 25% globally
• Nearly all Canadian respondents (98%) cited regulatory compliance as the biggest influencer over an organization’s approach to environmental issues
• About 60% of Canadians think the government should have the primary responsibility for leading behavioural change, which is significantly higher than the global and US results (44% and 23% respectively)
• Only 6% of Canadians executives believe business should have the primary responsibility for driving change
• 90% of Canadian respondents believe the government needs to offer more tax incentives to support investment in environmentally-beneficial activities, processes and new technologies

Leanne Sereda is the national leader of the Clean Energy group and a partner in the Energy Tax Services group of PricewaterhouseCoopers LLP working in the Calgary office. She has more than 18 years of corporate taxation experience advising energy clients on all tax matters including corporate reorganizations, mergers and acquisitions, divestitures, cross-border financing, and ventures in and out of Canada. In addition, Leanne is an accomplished speaker on energy-related topics for the Canadian Tax Petroleum Society conference, the Small Producers and Explorers Association of Canada, Queen’s Business Law Symposium, and the Canadian Association of Petroleum Landmen. Leanne is the former treasurer of the Nature Conservancy of Canada, Alberta Region, and a former director of the Canadian Petroleum Tax Society.

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