The political and policy changes in the United States (US) are having a ripple effect as they relate to global climate policies and green initiatives such as Environmental Social and Governance (ESG). How or will these changing policies affect Canada?
From Environment and Energy Leader: “The 2024 U.S. election has introduced new uncertainties into global markets, with investors closely watching potential shifts in sustainability policies, trade relations, and climate regulations. While some feared that Donald Trump’s return could set back ESG momentum, Canadian investors remain largely undeterred.”
While some are staying the course on green policies, others are making changes. Whether these changes are in response to the new US administration is not clear.
Net-Zero Departures
As reported in the Insurance Journal on January 20, 2025, “Four of Canada’s biggest banks are leaving the industry’s top climate-finance alliance, joining Wall Street peers and extending an exodus that started in early December.”
The banks exiting the Net-Zero Banking Alliance program are the Canadian Imperial Bank of Commerce, Toronto-Dominion Bank, Bank of Montreal, and National Bank of Canada.
Others Remain Committed
On the other hand, in a blog by the law firm Gowlings, which considers the effect of the United States (US) new administration on cross-border environmental policies, they write, “Despite market volatility and regulatory headwinds, Canadian institutional investors remain steadfast in their ESG strategies, prioritizing long-term value creation over short-term political shifts.”
The blog also includes, “As global ESG narratives become increasingly polarized, Canadian institutional investors are demonstrating resilience, maintaining their commitment to responsible investing even amid shifting U.S. policies and legal challenges.”
Four of Canada’s biggest banks are leaving the industry’s top climate-finance alliance, joining Wall Street peers and extending an exodus that started in early December (Photo by Anton Marchuk on Unsplash).
US Actions
Policies under the new administration have already led to the US pulling out of the Paris Climate Accord, eliminating the focus on Environmental Justice, and focused on bolstering the development of fossil fuel.
Both Doug Burgum (US Secretary of the Interior) and Lee Zeldin (US Environmental Protection Agency Director) have echoed the new US President’s goal of increasing fossil fuel development. They both have also stated they are concerned about anthropogenic climate impacts – a dichotomy that may influence future US policies.
Greenwashing
One of the other green initiatives that has gained a recent foothold is greenwashing under the Competition Act.
The Competition Act tackles unsupported environmental claims, commonly known as greenwashing, by requiring (among other things) that claims about the environmental benefits of a product be supported by adequate and proper testing.
McCarthy Tetrault provided a more detailed look at this issue in, “ESG and Sustainability: Key Trends in Canada.” “The next 12 months promise to be a period of transition in greenwashing enforcement in Canada as the Bureau, companies that make environmental claims, and potential complainants acclimatize to the contours and enforcement possibilities of the amended deceptive marketing regime under the Competition Act.”
Addressing the Competition Act, KPMG wrote, “Businesses must exercise caution, rigorously review and revise their sustainability disclosures to ensure compliance and avoid allegations and complaints of greenwashing.”
As we have stated previously, under the Competition Act, any six persons who reside in Canada can trigger a review of an environmental claim. With this “low bar” to trigger a review, companies should carefully review their various “green claims.”
Environmental Protection and Remaining Competitive
The various green initiatives and efforts to reduce anthropogenic greenhouse gases (Canada contributes 1.5% of the global CO2 emissions) have grown in recent years. Political changes in the US may have resulted in more companies and governments taking a critical look at these policies. Currently, Canada remains steadfast in various green efforts.
Protecting the environment is crucial, but so is our ability to compete on a global scale. We need to balance environmental protection with the need to produce goods and services that meet the needs of Canadians and allow us to compete.
If you have questions or need assistance with an environmental issue contact our office or contact Christopher Paré, P.Geo., directly at 519-948-7300, Ext. 114.
Alan Hahn drafted this blog. Alan has an undergraduate degree in Environmental Studies and completed a graduate program in Environmental Management. He has worked in environmental management for more than 45 years. He has written hundreds of blogs and articles. His published work includes HazMat Magazine, BizX Magazine, Michigan Lawyers Weekly, GreenStone Partners, Manure Manager Magazine, and Progressive Dairy.
Christopher Paré, P.Geo, reviewed this blog. Chris is a senior geoscientist and manager of Dragun’s Windsor, Ontario, office. Chris has more than 30 years of experience on projects ranging from environmental site assessments (Phase One/Two ESA), excess soils, remedial investigations, soil and groundwater remediation, Permits to Take Water, Records of Site Conditions, vapour intrusion, and site decommissioning. Chris is a frequent speaker, author, and expert witness. See Chris’ bio.
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