Throughout 2021, the Business Council of British Columbia hosted the ESG in B.C. webinar series which canvased the evolving influence and impacts of embedding, measuring, and reporting environmental, social and governance risks for business. The series was informed by global, national, and local leaders from a variety of sectors across the economy. Participants and presenters explored how we conduct business in B.C. and how we can build on our existing strengths and practices to create a globally differentiated offering for ESG-driven capital.British Columbia has many advantages. However, to ensure we have the conditions in place to attract this capital, governments, Indigenous, business, labour and community leaders must come together to create the necessary conditions for a prosperous and sustainable B.C. economy.This report summarizes what we heard from series’ presenters and participants. It offers advice to governments and considerations for business and Indigenous leaders as they contemplate their approach to ESG. Report highlights are summarized below. You can also watch the series here and visit ESGinBC.cato learn more.

Report Highlights: What we heard

Shifting expectations

• There is a marked shift in societal expectations about how companies conduct themselves, not just on the environment, but on social issues related to diversity, equity, support for communities and capturing the voices and concerns of more than just a limited set of stakeholders. In the B.C. context, that also includes the shifting role, expectations of, and opportunities for Indigenous leaders and communities to become partners and project proponents.

• Major institutional investors are making clear they expect a return on investment and a strong commitment to ESG practices and reporting. Measuring and talking about environmental, social and governance issues is no longer optional, but a strategic imperative for businesses.

The opportunity for B.C.

“When we look at some of the key environmental and social issues associated with ESG, the reality is they have been part of the business fabric in B.C. for decades…. B.C. has everything it needs to become a world-class destination for ESG-minded businesses and ESG-driven capital” – Radha Curpen, Vancouver Managing Partner and National Leader, ESG Strategy and Solutions, Bennett Jones

• ESG is not new to our province. One of British Columbia’s advantages comes from our strong brand on all elements of the ESG equation. But this is premised on the need for a coherent economic strategy to help fulfill the promise of shared prosperity, all of which is underpinned by our comparative advantage in resources, people and talent, and infrastructure.

• There is a need for investors and banks to reward innovation and actions that reduce greenhouse gas emissions and agreement that implementing economic development through the ESG lens will help reallocate capital.

Indigenous perspectives

“Meaningful community engagements are rooted in deep meaningful relationships.” Chief Councillor Crystal Smith, Haisla First Nation

• We heard from Indigenous leaders that ESG is already reflective of Indigenous people’s world views and traditional knowledge. But the current frameworks are narrow and weak, and do not adequately consider Indigenous perspectives.

• Fundamentally, Indigenous peoples want both a say in, and share of activities within their traditional territories. If done well, meaningful relationships with Indigenous people will be a differentiating characteristic for British Columbia and can provide clarity and certainty for investors as well as sizeable economic opportunity for many Indigenous communities and Indigenous-owned businesses.

Individuality as well as materiality for companies

“Quite simply, every company needs to develop a unique ESG strategy to differentiate itself.” – Lori Mathison, President and CEO, CPA BC

• Materiality helps filter the important and relevant issues of a particular company, based on their unique goals and circumstances. Narrowing the company’s list of material issues involves talking with stakeholders and communities, engaging in scenario planning and examination of local and global trends. It also enables a focus on the issues where a company can have the most impact.

Disclosure, transparency, and reporting considerations

• ESG used to be a qualitative exercise. Today it is driven by the extensive availability of data and a broader set of tools for analysis. If done poorly, ESG becomes greenwashing and may make things worse letting down the very stakeholders it is designed to help.

• Sustainability reporting is about continuous disclosure and must be tied to materiality assessment.

Other topics explored in the series and report include

• Healthy, productive, and skilled populations, talent attraction and retention

• Supply chain and procurement implications

• External stakeholders

• Climate change

• Innovation

Report Highlights: Recommendations to government

Governments are now looking at how to capture the essence of ESG more fully in regulation and policy. It is the Business Council’s view that ESG principles are already well embedded in B.C.’s regulatory system. Attracting capital and talent requires a focus on competitiveness by making the current rules less complex and processes more efficient. Anything less will discourage investment in B.C., depriving the province of much needed private sector capital, risk further carbon leakage, and erode, rather than build, a more sustainable economy. B.C. is a small jurisdiction and ESG is a global conversation.Government can have the greatest impact if it invests in infrastructure, digital capabilities in its regulatory system, and promotes the B.C. brand as a destination for ESG-driven capital. Other recommendations include:

• Greater collaboration with Indigenous communities and business including access to early-stage capital and equity opportunities for Indigenous communities.

• Develop a Productivity Commission focused on aligning government policies, procurement, and regulatory systems to more effectively attract capital.

• Set clear and stable policy goals accompanied by incentives to de-risk innovation and facilitate new approaches to solving problems.