Will Canadian firms feel heat of new U.S. GHG proposals?

A recently released survey from PricewaterhouseCoopers LLP has found that while 92 per cent of Canadian senior financial executives felt it was important to report the environmental and social impacts of their company to business leaders, more than half of respondents do not have effective systems and processes in place to measure them.

The survey, which was conducted with the help of the Canadian Financial Executives Research Foundation, polled the opinions of 343 senior financial executives across Canada last August.

Jonathan Hirst, director of IT advisory for PwC’s Calgary offices, said that the numbers indicate that IT needs to be playing a fundamental role in gathering data for sustainability outcomes – such as greenhouse gas emissions – and helping to manage that data against changing governmental regulations. This, he added, applies not just at the financial sector, but for all enterprises.

“The dialogue between CIOs and their sustainability counterparts needs to get better,” he said. “Neither side if aware of the other right now.”

According to IDC Canada Ltd. research director David Senf, less than 10 per cent of Canadian firms know what their carbon footprint looks like and only about one-third of Canadian CEOs see IT as a true business partner rather than a cost centre.

Senf’s colleague, IDC Financial Insights Canada analyst Rob Burbach, added that because of the recession, the interest in corporate sustainability among senior financial executives and other business leaders will wane during 2009.

“Last year, sustainability was very high in the agenda,” Burbach said. Using technologies such as virtualization in the data centre, he said, is one of the major ways that many enterprises can look to make green savings that are meaningful in their data centres.

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“But it’s all about cost savings now. If those cost savings happen to be green, so much the better, but the relative importance of green projects has fallen off the radar screen,” he added.

In 2008, Burbach said, companies might have taken a bigger risk on a project without a short-term ROI if it gave them the added benefit of improving their corporate images.

But according to PwC, companies might not have any choice in the matter, despite the ongoing recession and its affect on capital IT budgets.

More companies will have to track and report their green plans, such as greenhouse gas emission, as regulatory thresholds continue to be lowered by provincial and federal governments, according to Mel Wilson, associate partner of sustainability business solutions for PwC.

“Preliminary announcements coming out of governments across Canada have indicated the threshold for the amount of GHG emissions that you can emit before you are required to report it will be brought down over the next several years,” he said.

Wilson credits the Obama factor as a driving force behind these initiatives, with the U.S. Environmental Protection Agency this week unveiling its new plans for proposed mandatory GHG reporting at approximately 13,000 facilities.

“The requirements will be much more stringent and have a much lower threshold than what we have in Canada, but the expectation is that we will follow suit and come out with similar levels,” Wilson added. “We’ll probably see the number of companies that are required to report probably quadruple over the next few years.”

Historically, Canada has been a laggard in implementing regulations on climate change issues, he said, as companies have been able to get by using primitive systems and basically relying on Excel spreadsheets to manage their emissions data.

“The regulators will not back down because of an economic downturn,” he added. “It may drag out some of these decisions a little bit longer, but there’s not going to be any directional change in the reporting requirements.”

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