The Visionaries - IR Global



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MY ADVICE... ESG integration is not just about compliance, it is about creating long-term value for organisations, society, and the environment. Some key takeaways for your organisation are: Assessment: Identify material ESG issues most relevant to your business and prioritise actions based on their impact and significance.

the organisation and when mandatory reporting comes into effect.

Client and Consumer Demand as Catalysts

Culture: By actively involving employees in your organization’s ESG strategy and initiatives, a culture of sustainability and responsibility can develop.

Client and consumer demand play a pivotal role in driving ESG expectations and regulations with an underlying theme of transparency. These include: • Consumer Awareness and Expectations: Consumers are increasingly attuned to the sustainability impact of their purchases. They expect companies to demonstrate commitment to the planet and its people. Priorities include reducing plastic waste and microplastics, improving labour standards, and lowering carbon emissions. Investors are increasingly integrating ESG factors into their investment decisions and recognize that sustainable practices contribute and impact a company’s long-term value and risk management. Creating transparency through product labeling and social media and marketing is crucial for meeting diverse consumer expectations which are ever evolving as they become more educated in what is happening around the world. • Collaboration and Supply Chain Transparency: Achieving meaningful sustainability improvements requires collaboration and information sharing throughout the supply chain. ESG reporting and other channels necessitate transparency on material ESG issues, climate risks, and emissions. How can we successfully monitor and regulate the human impact on the environment? Who will monitor such an impact and how are we going to finance such an undertaking? Consumers are demanding responsible supply chains. Consequently, an important challenge in the coming year is to focus on the monitoring, regulation and financing of climate change impacts and other risks related to labour and environmental practices. This in turn impacts a company’s already existing concern for industries and organizations of reliable supply chains. Climate change and labour practices have a significant impact on supply chain systems. Creating sustainable supply chain mechanisms is also necessary for reducing the carbon footprint of an industry or organization. With an expectation by consumers for

Resilience: Look at ways to innovate and enhance the organisation’s resilience to

Measurement: Establish clear ESG metrics and regularly report on

the ever-changing landscape.

performance using these metrics.

Lead: As ESG regulations increase, by staying ahead of the curve and integrating sustainable practices, it will contribute to your organisation’s long-term success and resilience. These recommendations are not all- encompassing, and should be tailored to an organisation’s specific contexts and industries, but they provide a starting point for organisations seeking to navigate the evolving ESG landscape in Canada.

BERTANI is a boutique audit, tax and advisory firm located in Toronto, Canada. Founded in 2001, BERTANI specialises in inbound and outbound foreign direct investment into Canada and private Canadian companies with growth objectives and global interests. Through our soft-landing program, we routinely advise and assist foreign corporations with their expansion into and continuing operations in the North American market. As a member firm of IR Global, BERTANI is connected to over 1300 collaborative member firms in over 165 jurisdictions covering 70 practice areas across the globe, allowing our clients to be ideally positioned for their outward global expansion strategy.

Risk: Understand and manage your organization’s ESG risks and resulting implications of these risks. Once you have a clear understanding, you will then be able to develop strategies to mitigate these risks and seize any opportunities. Governance: Boards and audit committees should be actively engaged in ESG discussions and understand the impact on

which received Royal Assent in May 2023 for organizations that either are listed on a Canadian stock exchange or do business or have a place of business in Canada and meet certain threshold requirements. Among others is the requirement by Corporations Canada to report annually on the diversity of their board of directors and senior management. The CSA is also developing reporting around climate change also expected to be aligned with IFRS reporting standards. • Complexity and Gaps: The sustainability reporting landscape is becoming more demanding and complex. Rising stakeholder expectations surrounding ESG performance and transparency have led to prescriptive regulations replacing voluntary guidelines. Despite this progress, Canadian companies are challenged with meeting new regulatory requirements, including evolving climate change risk disclosure expectations. Reflecting Canada’s changing

disclosure in Canada and develop Canadian Sustainability Disclosure Standards that are aligned with global baseline standards developed by the International Sustainability Standards Board.

transparency around these issues, the challenge and priority when it comes to sustainability for organizations will be to set climate goals and standards that are congruent with their goals for efficiencies as they face other barriers. • Benchmarking and Reputational Risks: Companies are increasingly recognizing the importance of telling their sustainability story to consumers. However, there are implications if ESG claims are publicly challenged and risks to investors of company’s “greenwashing” i.e. representing themselves as being more environmentally responsible than they are resulting in investor confusion and negatively impacting investor confidence. As a result, accurate reporting becomes more and more important and is essential to maintaining market share and preserving value. This in turn has also led to the increased need for new regulation. Consumer and investor demand continues to be a significant catalyst for ESG expectations and regulations. In today’s “cancel-culture,” companies

are taking consumer expectations and demands more and more seriously.

Accountants’ Role in Boosting Resilience

organizations to thrive sustainably and navigate the challenges of an increasingly evolving business environment.

Critical in today’s ESG environment is the need for accountants to move beyond traditional accounting roles and become value-added leaders and influencers on ESG matters. Our role has become more complex, and clients are looking to us to be strategic advisors and to understand a company’s broader business agenda and strategy. Critical to doing so in ESG is the need to understand and build ESG knowledge to view a client through an ESG lens and identify material sustainability risks and opportunities and how these impact an organization’s long- term performance and value. With the increasing demand by stakeholders for transparency, CPA’s can help navigate the complexity of ESG requirements and assist companies in creating and incorporating an ESG strategy into their long-term business strategy. By actively engaging with ESG issues, CPA’s can empower their clients’

REFERENCES AND SOURCES: Dawn of a new age in ESG disclosure, Michael McKiernan, Canadian Lawyer, September 14, 2023 • Canadian legislation on Forced and Child Labour in Global Supply Chains Takes Effect, Stikeman Elliott, May 26, 2023 • Sustainability Reporting Updates, CPA Canada • CPA Ontario, At A Glance: Global Sustainability Reporting Standards and Regulations, February 2024 • An Investor’s Guide to ESG reporting in Canada, MoneySense, Kat Tancock, April 20, 2023 • How Accountants can lead ESG Initiatives, CPA Canada • Why Organizations need to embed ESG Risks and Opportunities into their Business Strategies, The Globe and Mail, April 5, 2023

landscape in the area of ESG, The Canadian Sustainability Standards Board was established in 2022 to work towards advancing the adoption of sustainability

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