Factoring Net Zero Targets into Your Business Webinar Recap

Sustainability: A Business Imperative

Wherever you or your business stand on the topics of ESG, climate change, circular economy, or energy transition, there is a clear case that family enterprises should make sustainability a priority now to access talent, customers, capital, and growth in the future.

If we look at Europe as an example, their main focus is on large companies and those listed on an exchange; however, there are plans for disclosure requirements for SMEs as well, and private equity firms are starting to factor ESG into acquisition evaluations. By 2024, the International Sustainability Standards Board (ISSB) will be introducing global sustainability disclosure standards. And by 2025, sustainability reporting will be required when doing business in Europe, whether you’re a European business or foreign business.

Here in Canada, 51% of Canadian employees say sustainability influences their decision to apply for a job, and 58% of Canadian consumers say sustainability influences their purchase. By 2025, Toronto building owners will be required to disclose their emissions. And on April 12, 2023, the newly formed Canadian Sustainability Standards Board (CSSB), has announced Canadian sustainability disclosure standards that will follow the global standards integrated into the Canadian context. The targets and timelines are no longer decades away. There are companies today that are going to dominate in the future because they understand that sustainability is a business imperative.

This will affect all businesses, but we know that family businesses especially have an additional dimension to them—the complex web of relationships, roles, and expectations that individuals must balance as employees, owners, and family members. This can be a challenge to business continuity, particularly as the business transitions from one generation to the next. This is why Family Enterprise Canada exists: to serve the specific needs of family enterprises in Canada, including achieving sustainability goals.

Many Valid Sustainability Pathways

Here are some initiatives you can be involved with:

• UN Sustainable Development Goals (SDGs): global call to action to end poverty, protect the planet, and ensure that by 2030 all people enjoy peace and prosperity.
• B-Corp: a comprehensive assessment tool that anyone can use to benchmark many dimensions of performance. If a business is B-Corp certified, they are recognized in meeting the highest standards in social and environmental responsibility.
• Canada’s Net Zero Challenge: a made-in-Canada approach to achieving net zero.
• Global Reporting Initiative: helps businesses and other organizations take responsibility for their impacts, by providing them with the global common language to communicate those impacts.
• ISSB: Sets the rules based on global reporting initiatives making it accountable and measurable in an individual corporate basis.
• Global ESG Benchmark for Real Assets: provides financial markets with actionable insights, ESG data, and benchmarks.
• Social Purpose Institute at the United Way: helps business leaders incubate, accelerate, and scale social purpose to drive business growth.

FBSD is Our Sustainability Initiative

Fortunately, there is a sustainability initiative developed specifically for family businesses. It’s a joint venture of UNCTAD and Family Business Network called the Family Business for Sustainable Development (FBSD) initiative, which draws from the UN SDGs.

It aims to inspire families and their firms to embed sustainability into their strategies, commit to concrete measurable contributions towards UN SDGs, sign onto the family business sustainability pledge, and adopt transparent and comparable core indicators for reporting. Sign the pledge and get started with your family business’s sustainability journey!

A Reporting Tool for Family Business

The FBSD Sustainability Indicators for Family Business (SIFB) is based on the UN SDGs and includes a focus on Intergenerational Equity that is important to family business.

The SIFB provide a template to guide and assess the implementation of and reporting on actions by individual companies, help spur sustainability considerations among business owning families, and serve as a benchmark for overall assessment of the results and impact of the global initiative. 

Canada’s Global Ranking on Sustainable Development Goals Progress

In the Sustainable Development Report, Canada ranked 29^th, between Chile and Romania. Our worst performance is on climate action, life on land, and partnership for the goals, and have worsened in responsible consumption and production. Those at the top are Finland, Denmark, Sweden, and Norway. See rankings here. Clearly, we got a lot of work to do. Part of the FBSD initiative is to help Canada rise in these ranks and be a performer that’s worth being proud of.

Cove’s Journey

When we talk about making efforts to become carbon neutral, it can conjures up some complex, difficult exercise to get there. Although it has some complexity, one of the things Cove has found is that reaching carbon neutral status isn’t something only big companies with big budgets and large divisions devoted to sustainability can do—reaching carbon neutrality is achievable by any company at any level.

In 2016, Cove became a certified B Corp. We were the first insurance-related company in Canada to achieve this certification. In 2016, we became a member of 1% For the Planet, an organization that certifies our giving to grassroots environmental organizations. That means when consumers see our 1% For the Planet badge, they know that what we’re saying is backed up by what we’re doing. In 2016, we also established a fund called 1% For People. We thought that people who are struggling to survive will not be thinking about how to save the planet, and thus, we’ve created a fund to support underprivileged individuals and communities to gain mental, emotional, and physical self-sufficiency. We feel that only once a society is capable of being self-sufficient, then we’re able to start thinking about things outside of our most immediate needs and concerns, such as the environment.

In 2018, we completed our first Climate Smart certification. Climate Smart is an independent organization that certifies that we are meeting a standard of environmental impact mitigation, and it’s verified by a third-party so that everyone knows that what we’re doing is validated.

In 2021, Cove became a Carbon Neutral Company certified by Ostram Climate. Ostram Climate validates what our carbon footprint is (based on our Climate Smart report). We are then able to buy carbon offsets through Ostram Climate.

Introducing FBSD to Canada

Family Enterprise Canada and Family Enterprise Foundation are committed to encouraging and supporting family businesses and Family Enterprise Advisors on their sustainability journeys, being Canada’s voice at the international table (UNCTAD-FBN), promoting Canadian sustainable business stories, and ensuring that Canada is a leader in family business sustainability internationally.

We encourage Canadian family enterprises to sign the Family Business Sustainability Pledge and adopt the Sustainability Indicators for Family Business Reporting Tool. By using this tool, the information and data will be aggregated on a global basis and show up on the global index.

Together, we can play a significant part in Canada’s sustainability journey and accelerate the pace of positive change.