Evidence of meeting #109 for Environment and Sustainable Development in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was transition.
A recording is available from Parliament.
Head of UNEP Finance Initiative, As an Individual
Yes, in a quick answer, what you described exactly would, I think, be the most logical and efficient way for the private sector to do it.
Liberal
Ryan Turnbull Liberal Whitby, ON
I note there are 40 companies, approximately, in Canada that contribute roughly 90% of the emissions. These 40 are listed on the Toronto Stock Exchange.
I note the U.K. phased in disclosures—I think it's the same in the EU—over a number of years.
Mr. Usher, could you speak about carving out SMEs, and what the rationale for that would be? How have other jurisdictions phased in disclosure to ensure companies have some runway in order to adapt to new disclosure requirements?
Head of UNEP Finance Initiative, As an Individual
I think the general approach is that you start with large companies. The emphasis is on scope 1 and scope 2. It's essentially what companies can directly measure. Most of the emissions, usually, are scope 3. For an auto manufacturer, let's say, it's mostly people using their cars who create emissions. It's not the building of the cars. The expectation is that they have a longer—several years—on-ramp to get to scope 3, at which time they need to understand the emissions embedded within their value chains. This is the approach that has been taken in Europe and, I believe, in the U.K. It seems to be the logical one.
Of course, you need to be helping parts of the economy get ready for these new regulations. We need to support industries. Audit industries are able to come in and help companies understand how they can disclose effectively.
Liberal
Ryan Turnbull Liberal Whitby, ON
Thank you.
Could you also speak about the difference between disclosures and transition plans? I think there's a significant difference there. You mentioned taxonomy and transition planning in a response to another MP from the Conservative bench. I want to clarify. You talked about disclosures and mixed in transition plans, which I think are both important.
Could you differentiate how transition plans go above and beyond? Thanks.
Head of UNEP Finance Initiative, As an Individual
It's very different, because disclosure doesn't require you to do anything. It just requires you to be transparent about your current business. It can also, as in the U.K., be transparency on your capex and how you're investing, which gives you some view on the future.
A transition plan is the expectation of how you plan to transition to a future state. It's a more explicit business plan for change. Once again, it doesn't require you to say that you're going net zero. The expectation is that they want you to be more explicit in saying what the implications are if you aren't going to decarbonize. How do you believe your business is going to be affected? If you're an auto company that stays with just internal combustion engine vehicles, do you believe that, five or 10 years from now, you're still going to be in business?
Liberal
The Chair Liberal Francis Scarpaleggia
I'd like to thank the witnesses.
Thanks also to Mr. Miller for having agreed to send us his answers and comments in writing.
I wish all the committee members an enjoyable weekend. We'll meet again on Tuesday.
Liberal
Liberal
Liberal
Sophie Chatel Liberal Pontiac, QC
Can you tell us why the test worked, but that we couldn't hear him during the meeting? I'd like an explanation.
Liberal
The Chair Liberal Francis Scarpaleggia
The test never worked. At the beginning, the interpreters had his speaking notes, so they didn't really need to hear him.
