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- KPMG: 55% of Canadian CEOs believe addressing all ESG priorities concurrently is possible, reflecting a growing commitment to sustainability integration.
- Regulatory and reporting obligations drive 78% of CEOs to prioritize ESG, underscoring the impact of emerging legislation like Bill C-59.
- 75% of CEOs anticipate substantial ESG returns within three years, but 63% admit to ongoing struggles in embedding ESG as a value driver.
Rising ESG Challenges for Canadian CEOs
According to KPMG’s 2024 CEO Outlook, Canadian executives are placing sustainability at the forefront, driven by extreme weather events, disruptive technologies, regulatory changes, and evolving consumer demands.
“The demands on Canadian CEOs are substantial, with leaders under pressure to tackle issues such as climate risk, decarbonization and ethical supply chains. The operational, logistical, financial, and now legal complexities of sustainability call on the entire C-suite to work together to embed ESG across the organization,” said Doron Telem, Partner and National ESG Leader, KPMG in Canada.
Key Findings from the Report
- 29% of Canadian CEOs cite ESG as their primary operational focus, over twice the global average (13%).
- 53% of CEOs believe their sustainability claims can withstand scrutiny, up from 29% in 2023.
- Regulatory concerns, especially Bill C-59, are driving 78% of ESG prioritization.
- 62% of CSOs say their organizations have adopted a strategic ESG approach, but barriers persist.
The Role of Regulation and Strategy
The introduction of Bill C-59, aimed at curbing greenwashing, has intensified scrutiny on environmental and social claims. As 53% of CEOs express confidence in their claims, many are collaborating closely with Chief Sustainability Officers to align ESG strategies with operational goals.
Mr. Telem emphasized: “Although regulatory pressures are pushing ESG to the forefront, corporations realize that resilience and risk management are in fact at the core. Management teams are coming together to analyze the ESG factors that need to be addressed in the short and long run.”
Overcoming ESG Barriers
Despite strides in ESG adoption, Canadian CSOs flagged systemic barriers that hinder effective implementation, including resource allocation, expertise gaps, and data limitations.
To move beyond compliance, KPMG advises Canadian companies to:
- Invest in long-term ESG initiatives with the right technology and expertise.
- Embed ESG into core operations and decision-making processes to enhance resilience.
- Refine ROI models to better account for ESG-driven risk mitigation and opportunities.
With CEOs and CSOs aligning their efforts, the path forward requires robust strategies and collaboration across the C-suite.
RELATED ARTICLE: 66% of Young Professionals Feel Responsible for Driving ESG Initiatives: KPMG Report