Our upcoming event, GLOBExCHANGE (Feb. 27-Mar. 1, 2023) builds on our recently published 10×10 Matrix, which identifies the 10 areas where we need to take action in the next 10 years to get to net zero.
In our 10×10 Takes video series we’re talking with climate leaders who are working to advance these action areas. Watch this installment as we get down to business on Mobilizing & Deploying Capital and Aligning Transparency, Standards, & Reporting with Eric Usher, Head of UNEP FI.
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Recorded at GLOBE Forum 2022, this Net Zero Insights video features host John Stackhouse, Senior Vice-President, Office of the CEO from RBC in conversation with Susannah Pierce, Shell Canada’s President and Country Chair.
From the Prime Minister’s major net-zero announcement, to seeing all our favourite people back together for the first time in two years, the first day of GLOBE Forum 2022 was one for the books! Watch to hear from our very own Elizabeth Shirt, GLOBE Series’ Managing Director, and catch up on all the Day One highlights.
We are at the beginning of the most decisive decade in our lifetimes. What we do in the next 10 years will set the course for our net-zero future. To meet the moment, GLOBE Series launched Destination Net Zero Events—a three-event series culminating in GLOBE Forum 2022, the largest and longest-running sustainability conference in North America.
We’re embedding action and accountability into these events with the 10×10: 10 actions in 10 years we need to take to get to net zero. The actions identified in the Nature and Bioeconomy Days event, which took place virtually November 23-24, 2021, are summarized in the 10×10 Outcomes Report. These outcomes will feed into the final 10×10 that is produced after Forum.
By Tomas van Stee, CEO & Founder EnPowered
The simple truth of the matter is that we are not moving fast enough to dampen, let alone reverse, the impacts of climate change. We all recognize the existential threat of climate change, and everyone wants to save money on their energy bills. This means that more large commercial and industrial energy users are looking to adopt cleantech to lower expenses and emissions, and fortunately, most of the technology we need to tackle climate change is already available
We may have the technologies we need, but how the energy sector is organized is slowing down the rate of cleantech adoption. We’ve spent the last century erecting a global electricity infrastructure based on fossil fuels, so any attempt to modernize and innovate runs up against resistance. Whether from entrenched interests or just the simple fact that grid reliability trumps everything else, this resistance prevents the rapid sea changes we need to preserve the environment. We need reliability and we need to innovate the electricity system without losing the stability of that system. Digitalization lets us do both.
When it comes to the energy sector, ‘digitalization’ refers to the ongoing and accelerating effort to give energy users access to their usage data, as well as helping them understand it, so they can make more informed decisions. At EnPowered we leverage digitalization for two main goals: 1) simplifying the complex world of energy prices, and 2) simplifying complex energy asset purchasing decisions.
Energy prices are complicated — digitalization can help.
Energy prices and electricity bills (with their multitude of charges) are extremely complex, and most large energy users lack the time or expertise to navigate obscure industry jargon. While other industries have provided energy users with highly granular, personalized data, our energy bills are still largely impersonal. By this I mean that they do not reflect the complexity and nuance of our energy habits, instead boiling down usage to a few line items at best.
The lack of actionable information in our electricity bills makes it harder to answer the two main questions that energy users frequently ask, namely, ”when is my energy more expensive?”, and ”when is it dirtier?”, i.e.. more carbon intensive.
While tech like automated building control systems, industrial-scale batteries, and behind-the-meter generation solutions are increasingly being adopted, we lack the data insights to fully leverage the power of these assets.
Enabling automated price signals and responses (i.e., enabling your internet-connected energy assets to receive and respond to price changes) is priority number one because following energy pricing and demand in real time is a full-time job. In fact, we have employees at EnPowered whose very job is precisely that. The majority of companies will not have the means (or desire) to employ full-time energy managers; a smart, personalized, automated system is the only viable, scalable long-term solution.
Ensuring digital assets (e.g., building automation systems) are connected to the grid and each other will go a long way towards a greener, cleaner, more flexible, and more stable electricity system. The potential of digitization promises to seamlessly avoid peak pricing, shift to greener energy sources as they become available, and utilize energy storage.
Digitalization can simplify energy asset-purchasing decisions.
Dealing with market fluctuations and ensuring communication between assets and the grid is only half the battle for large commercial and industrial energy users. Equally important is giving these energy users access to capital to reduce risk. Good data can only go so far. Concerns over capital risks continue to stall energy efficiency and cleantech projects, often despite proven ROI. This is where EnPowered is looking to play a leading role. We aim to support energy users who often have no insight into after-the-fact savings once they have selected and installed an energy solution.
Tying these costs and savings together in a transparent, easy-to-understand manner is key to reducing consumer uncertainty and lowering the perceived risks surrounding solution purchases. For example, converting daunting upfront capital expenses into more manageable operating costs makes billing and performance monitoring more accessible.
In addition, utilizing these future savings as a funding source opens the door to a wave of backlogged or stalled projects. For example, you could pay for an HVAC upgrade by leveraging your future energy savings. And once that project has been paid off, your energy costs will be even lower. This means you can create a positive feedback loop of lower costs leading to more savings and more projects undertaken, creating even lower costs.
Many of these stalled projects (such as the lighting retrofit that has been repeatedly put off, or the battery that’s been on your company’s wishlist for years) get hung up on securing adequate capital or by hesitating and waiting for better energy rates. All this waiting costs energy users money since they could be putting those savings towards future upgrades.
Why we need to empower energy users and partners.
If these weren’t enough reasons to push for the digitalization of the energy sector, there is another norm that digitization can up-end: how users and partners interact with the grid. As things stand, we are not moving fast enough on climate change, in part because of an outdated view of the consumer-producer relationship. In other words, we need to move away from only having information flow in a top-down, one-way direction; namely, from producers to consumers, with little opportunity for meaningful dialogue.
The enertech (energy technology) community has been talking about empowering energy users to produce their own electricity (e.g., installing rooftop solar panels) and to sell it back to the grid for over twenty years — in a word, to become “prosumers,” i.e., both producers and consumers of energy — but it’s only with the dawn of digitized energy that we are drawing close to fulfilling that promise.
Navigating energy markets, digitizing energy assets, unlocking stalled projects with funding from energy savings, and promoting prosumers: these are the challenges that EnPowered is tackling. But no one company can solve these structural issues alone, and we are always seeking to collaborate with like-minded organizations. Digitizing the energy sector will require an entire ecosystem of partners working in collaboration and establishing a virtual energy movement to bring about energy’s digital future.
Tomas van Stee spoke at Can the Four “D’s” of Electricity Disruption Get Us to Net Zero? During Destination Net Zero: Energy and Transportation Days. Read more about the 10 actions we need to take in the energy and transportation sectors in the next 10 years to get to net zero.
By Alan Shapiro, Director of Foresight Canada’s waterNEXT network and Bo Simango, CEO and Co-Founder of Aquafort
It’s been said that if climate change is the shark, then water is its teeth. From flooding and drought to ocean acidification and coastal erosion, we are already seeing these impacts unfold across Canada and around the world. Inevitably, impacts are never isolated to a single Earth system. The complex web of relationships that defines our water, energy, and food systems–known as the water-energy-food nexus–means that the security of one cannot be achieved without also investing in the other two. The collective health of these systems provides a necessary foundation for community well-being, economic prosperity, and reconciliation.
What does a net-zero 2050 mean for water in Canada? In its simplest form, the future we envision for water is sustainable, secure, and equitable. In a world where Canada has achieved its 2050 goals, that future should include:
We are not alone in imagining this future. Our Living Waters, a national network of freshwater organizations, has set the ambitious goal of seeing all waters in Canada in good health by 2030. This means that water in Canada is safe for swimming and drinking and contaminant-free; fish are flourishing and are healthy to eat; the flow of water in rivers and lakes supports life, recreation, and a healthy environment; and aquatic bugs that form the base of the food chain are thriving in all of the waterways in Canada.
However, as a recent article from MakeWay makes abundantly clear, we’ve got a lot of work to do:
“There are more than 200 federal departments and agencies in Canada, with more than 20 of these departments having freshwater responsibilities and over 75 interacting with water in one way or another. Canada has specific agencies for fish, agriculture, and natural resources – all of which impact and rely upon water – yet we do not yet have one for our most abundant resource.”
Two new high-profile federal initiatives–the Canada Water Agency and Blue Economy Strategy–offer opportunities to advance national conversations around the future of Canada’s freshwater and ocean resources. Likewise, multiple funding announcements over the past year, including for land and water conservation, Indigenous protected areas, and First Nations drinking water bring much needed resources to water systems that have historically been under-funded and under-supported. These commitments are steps in the right direction, but more action is needed to draw on the full range of economic and policy tools at our disposal in Canada.
In addition to stewarding and restoring the health of our waters, Canada also has an important opportunity to play a global leadership role in water technology and innovation. These tools are only one part of the solution to the complex challenges presented by climate change, but they can serve to advance our central values of sustainability, security, and equity.
Water innovation can offer a range of environmental benefits, and the connection between water technologies and net-zero should not be overlooked. Freshwater and oceans represent a significant and largely untapped opportunity for energy savings, greenhouse gas emissions reductions, and renewable energy generation.
The technologies of tomorrow are already in development and aquaculture offers just one example. As the fastest-growing food sector in the world and burgeoning industry in Canada, aquaculture has seen significant technological advancements from Canadian companies that support environmentally conscious fish production. Aquaculture is a resource-intensive industry, and these innovative technologies can be the difference between the expansion of ocean-based fish farming that can be harmful to aquatic environments and the transition to sustainable, land-based fish farming. Canadian start-ups such as Aquafort AI are meeting challenges in acute production through a combination of artificial intelligence, sensor data integration, and predictive analytics to help land-based farmers maintain fish and ecosystem health.
As we head into a federal election where climate is taking center stage for the first time, we have an opportunity to chart the course for a net-zero future by 2050, and beyond.
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Alan Shapiro is the director of Foresight Canada’s waterNEXT network and principal at water and sustainability consultancy Shapiro & Company. You can find him on Twitter @watercomm.
Bo Simango is the CEO and Co-Founder of Aquafort, a technology startup serving the aquaculture industry and board member with Sierra Club Canada Foundation. You can find him on Twitter @BoSimango.
By Phil De Luna, Green Party of Canada Candidate for Toronto-St. Paul’s
I have spent my entire career developing technologies to help decarbonize Canada. It started with my PhD in Materials Science & Engineering at the University of Toronto, where I discovered new renewable ways to convert carbon dioxide into fuels and chemicals. From there I co-founded a venture, Team CERT, to scale that clean technology out of the lab and became a finalist in the Carbon XPRIZE. I joined the National Research Council of Canada as its youngest-ever Director where I built and led a $57M collaborative R&D program to develop made-in-Canada technologies for decarbonization. Along the way, I have studied, discovered, developed, funded, mentored, and advocated for the development and expansion of cleantech.
At some point on this journey, I had a realization – technology alone is not enough to get us to net-zero. You can have the next breakthrough hydrogen catalyst or the cutting-edge carbon capture material, but unless you have the finances to scale it and the policies to support it, it will end up on the shelf. Together, technology, policy, and finance are the three levers needed to affect change. Thankfully, many institutional investors, corporates, and governments have recognized this need and are shifting money away from fossil fuels and into cleantech. For example, venture capitalists are expected to complete $7.7 billion worth of cleantech deals in the U.S. this year, up from $1 billion a decade ago. However, this transition is not happening fast enough, as it typically takes 20 years from invention to impact with clean technologies based on materiology, like hydrogen or batteries.
Following record-breaking heatwaves and the recent wake of fires across North America, the urgency to act on climate change is becoming more pressing every day. Unfortunately, many governments are not on track to meet their Paris Agreement climate goals and many, including Canada, continue to invest in fossil fuel infrastructure like pipelines. The International Energy Agency (a traditionally conservative organization) recently published a report showing that net-zero by 2050 is not possible with the continued development of fossil fuel infrastructure and extraction. Their analysis noted that achieving net-zero by 2050 can only be done with an unprecedented, warlike effort to expand clean technology infrastructure. And only governments and policies can work at the scale needed to jump-start this transition. We have innovators developing the technologies. We have investors recognizing the opportunity of this transition. We just need the political will to get it done.
Continuing my career-long goal to help make Canadian industry cleaner and more prosperous, I am now running to become a Member of Parliament in Toronto-St. Paul’s for the Green Party. I’m running because we must move faster to combat the threat of climate change and create new sustainable avenues to renew our society and economy. I’m running because we need more diversity in parliament and more science in policy. I’m running because I want to lower the barriers for other non-traditional candidates to consider running — because a diverse government is a robust and resilient one.
My platform is currently focused on three pillars: supporting our essential workers, housing affordability, and green jobs that are part of a just transition to a net-zero Canada. These topics are deeply personal for me. My fiancée is an operating room nurse at Sick Kids and a frontline worker. Many of my fellow Filipino-Canadians occupy these often low-paying but essential roles. My generation is being increasingly squeezed out of the housing market and is wondering, will we ever be able to purchase a home? Championing cleantech to fight climate change has been my passion, but more importantly, I recognize the opportunity in sustainable jobs. My father, an autoworker, lost his job when Ford closed their assembly plant in Windsor, ON, and I’ve seen firsthand what happens when an entire community is dependent on one industry. And I see the same thing happening in heavy emission industries today. We need to do everything we can to diversify the industry and ensure Canadian families have green jobs that will last.
There exists a massive opportunity in the clean energy transition, as the green economy will be the economy of the 21st century. To this end, I have come up with a five-point plan to get us to net-zero by 2050, one that I hope to push for in parliament.
Step 1. Protect what we have.
Nature sequesters 12 billion tonnes of CO2 every year in wetlands, rainforests, vegetation, and soil. Environmental conservation is not only about protecting the beauty of nature, but also about protecting its ability to capture and sequester CO2 through photosynthesis and other natural pathways. Take for example, recent plans for an Amazon warehouse on Toronto wetlands that was abandoned due to public pressure. Policies and technologies that focus on reducing consumption, reusing consumer goods, promoting a circular economy, and increasing recyclability are all ways to protect what we have.
Step 2. Renewables everywhere.
Solar and wind are now cheaper than coal. The issue is no longer economic price, but rather intermittency. What do you do when the sun does not shine, or the winds won’t blow? This is why it is so important to increase investment into and development of energy storage technologies, particularly long-term seasonal energy storage solutions that traditional batteries are not capable of. Policies that support a 100% emission-free electricity grid are also extremely important. However, we will need to consider initial lower-income energy subsidies when electricity costs may be higher due to infrastructure spending in the early stages of this transition.
Step 3. Electrify everything.
Now that we have clean and green electrons, we need to put them to work and electrify as much as possible of our traditionally fossil-fuel-powered economy. The obvious first beachhead is electric vehicles. Kicked off by Tesla’s rapid rise, light-duty transportation is well on its way towards electrification and mainstream adoption, Among others, Ford has announced they are slated to spend more on EVs than on internal combustion engine vehicles in 2023 alone. To help spur this trend, policies can create incentives for EVs, increase charging infrastructure, ban internal combustion engine cars, and mandate a certain number of EVs be available at any dealership. Another area is home heating and cooling. Electrifying our lived environment will also reduce dependence on natural gas by way of zero-emissions heat pumps.
Step 4. Tackle hard to abate sectors.
Once we’ve decarbonized our electricity grid, we’ll need to address industrial emissions that are difficult or impossible to electrify. Agriculture and the production of materials, fertilizer, cement, and steel – all things that we need for economy and quality of life – produce emissions just by the nature of their how they are created. This is where the need for disruptive technology is greatest, where we need to design and develop new processes that are circular, low-emission, or entirely new. Cleantech is not just solar panels and wind turbines, it is anything that can help reduce CO2 emissions. Electric arc furnaces, geothermal steam generation, bio-foundries that produce sustainable materials, and CO2 embedded concrete are all examples of the next wave of cleantech.
Step 5. Remove carbon from the atmosphere.
To address the inevitable gap between decarbonizing our electricity grid, transportation, buildings, heavy industry, and agriculture sectors –we need new ways to capture carbon from the atmosphere. Whether that’s nature-based solutions like regenerative agriculture or tree planting campaigns, or technology-based solutions like direct-air capture and carbon capture, utilization, and storage – we need to do it all. Policies that incentive organizations and individuals to capture CO2 or promote the use of CO2 in industry (eg. carbon-reinforced concrete) will help create demand and drive down the costs of capture as the technologies reach economies of scale.
The beauty of this five-point plan is that the technology needed to execute it will require the exact same workers who presently make their livelihoods in the oil and gas sector today. We will need pipefitters, chemists, technicians, welders, and engineers to build the clean energy infrastructure needed for a sustainable tomorrow.
And there you have it, Phil’s Five-Point Plan to Get to Net-Zero. Perhaps a bit idealistic. Perhaps some will say inertia is difficult to break, that things are easier said than done. But like running for office, you’ll never get a chance to change the world if you don’t try.
As Canadian governments and corporations commit to net zero by 2050 targets, accelerating market deployment of clean solutions has become an increasingly urgent imperative. Building on insights gained from GLOBE Advance 2020, the Scaling Cleantech in Canada session hosted at GLOBE Capital 2021 focused on the barriers impeding cleantech deployment, solutions, and leadership.
In partnership with Emissions Reduction Alberta (ERA) and sponsored by Foresight Cleantech Accelerator Canada (Foresight) and the Natural Gas Innovation Fund (NGIF), GLOBE Series and The Delphi Group engaged 70 workshop participants and speakers from Tourmaline, Intelligent City, Foresight, and ERA to discuss key barriers, best practices, and lessons learned in deploying and scaling cleantech in Canada.
The partners and sponsors involved in this initiative hope that this summary supports advancing scaling and deployment of cleantech in Canada and welcome any stakeholder feedback. Stay tuned for the next outcomes-oriented installment of Scaling Cleantech in Canada at GLOBE Forum 2022!
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With over 1,300 Shell stations in Canada, filling up under that bright red and yellow sign is a weekly ritual for many Canadians. It’s also one of the activities that generates the most carbon emissions—a quarter of Canada’s carbon footprint is attributed to transportation. Consumers know this and they’re continuing to demand new solutions to reduce their emissions. As GM of Shell’s retail fuels division in Canada, Andrea Brecka leads the company’s efforts to put the customer first. We caught up with her to learn more about how Shell is investing in innovation to transform what it means to “fill ‘er up”.
You have joined the Canadian government, 100 other countries and many of the world’s largest corporations in committing to net-zero emissions by 2050. To achieve this target on a global scale, the latest International Energy Agency report recommends no new oil and gas developments. What does a net-zero future mean for Shell?
Climate change is a very urgent challenge and tackling it requires a fundamental transformation of the global economy, including the energy system. That’s why Shell has stepped forward to set a net-zero-by-2050 target in lockstep with society’s progress and the Paris Agreement.
How will we do that? We’ve identified six levers to help Shell and our customers decarbonize:
In terms of the IEA conclusions, they’re based on scenarios and, therefore the demand and supply modeling varies. Shell’s oil production peaked in 2019. Further, we don’t foresee any frontier explorations beyond 2025. All to say, this net-zero commitment is critical for Shell.
I understand Shell Canada has taken steps to reduce Scope 3 emissions. Could you share more about this strategy and why it’s important?
Absolutely. I think it’s fundamentally important that everybody understands what we mean by Scope 1, 2, and 3. We define Scope 1 and 2 as the emissions generated from the extraction and production of the energy products we sell. Scope 3 emissions are generated by the end use of these products. Many people are surprised that more than 90% of Shell’s emissions are Scope 3. The other element that people may not know is that Shell sells many products from other companies, including energy products. In fact, we sell more than three times the energy we produce ourselves. This is why it’s significant that Shell has chosen a commitment to reduce Scope 3 emissions.
I’ll share an example of how we’re helping our customers reduce emissions. Last year, we were the very first fuels retailer in Canada to launch a Drive Carbon Neutral program for our customers to help offset emissions from fuel purchases. Most recently, we’ve announced that carbon-neutral lubricants will be available to customers in key markets, including Canada. This program will offset approximately 700,000 tonnes of CO2 emissions per year.
Tell us more about your new carbon-neutral driving offer.
For a number of years, many customers have been telling us they’re interested in reducing their carbon footprint, but an electric vehicle (EV) is not an option at this time. The Drive Carbon Neutral program helps them have an impact even if they don’t own an EV. It’s very simple to participate: from now until Sept. 7, when customers opt in via the Shell EasyPay app, Shell will offset the emissions from their fuel purchase. It’s a great experience and I highly encourage all our customers to participate.
Alternatively, customers can come inside the store at participating locations and pay 2 cents per litre to offset their emissions. What happens after that? Shell purchases independently verified carbon credits that are generated from either Canadian or international projects designed to protect or restore the natural landscape.
I’m happy to say that, since the launch of this program, we have offset approximately 15 million litres of fuel. The customer feedback is overwhelmingly positive. We’re continuing to evolve the offer and there will be more to come later this year. Stay tuned!
Consumer demand for alternative fuels is growing. How is Shell supporting innovation to meet that demand?
As I referenced earlier, it’s important to be in lockstep with customer demands. In Canada, I’m proud to say that we’ve not only embraced, but I feel like we embody the energy transition. In the last five years, we have transitioned our business from heavy oil to natural gas, we’ve implemented carbon capture and storage here in Alberta, and we continue to do more and more with respect to lower-carbon fuels and renewables. We’re also making a much wider range of lower-carbon products available, such as biofuels and hydrogen, while also increasing the number of charge points for battery electric vehicles.
To give a hydrogen example, Shell has partnered with a hydrogen technology and energy company called HTEC to build two hydrogen refueling stations in the greater Vancouver area. On the biofuels side, there are a couple of innovation examples. We have a 40% interest in the $875 million commercial-scale Varennes carbon recycling plant—the first ever waste-to-low-carbon-fuels plant in Quebec. Secondly, Shell Ventures has made an equity investment in Forge Hydrocarbons Corporation to build a first-of-its-kind $30 million commercial-scale biofuel production plant in Ontario. We’ve also acquired Greenlots, an EV solutions provider, and we will be building EV charging stations across Canada and in the U.S. These are just a few examples of investments Shell has made to advance innovation and accelerate progress.
It’s 2030. I pull into a Shell station. What does it look like?
I think the future retail station will have a mosaic of solutions. Certainly, when you think about the kinds of fueling offers, EV, hydrogen, and biofuels will be standard. We will build future retail stations to be carbon neutral, perhaps taking advantage of solar panels or geothermal power. Lastly, I think about our customers. We have a vision to provide an oasis within the store. In 2030, we’ll have great lounge areas with wifi for people to connect or catch up on some work. In addition to the foods and beverages we have now, we’ll also offer healthier solutions for our customers. We think of our retail stations as not just fueling vehicles, but fueling bodies and minds.
How is Shell addressing calls for a just transition? And as a former president of Shell Canada’s Women’s Network, what role do you see for diversity and inclusion as we transition to a clean economy?
I’m proud to say that when Shell looks at projects like LNG in new areas, we work hard to get to know the communities. That means understanding the community’s wants, meeting its workforce, and addressing local partnerships in a way that’s fair, just, and inclusive.
In my work in the retail business last year, we launched the Fuel Service app. For most of us, fueling your car is a seamless experience, but for some individuals with disabilities, it can be daunting. To address that challenge, we partnered with Fuel Service. Now, individuals have the ability to call ahead and see if a retail station is able to assist them in their fueling.
I’ve worked with Shell for almost three decades. One of the reasons I’ve been here as long as I have is because Shell believes in and takes action on diversity, inclusion, and equity. Even in the last year, Shell is going through a major reorganization and we’ve made a very intentional effort to ensure our leadership team is diverse. This has been wonderful. Everybody wants role models to look up to. Diversity means better quality decisions and better business outcomes.
If you could invite three people, either alive today or no longer with us, to a conversation about the future of energy in Canada, who would they be?
I love this question. I thought long and hard about it. One would be Brian Mulroney. I saw him speak at a Pollution Probe gala last year and in his speech, he said “Successful leaders do not impose unpopular ideas on the public. They make unpopular ideas acceptable to the nation, and that takes courage.” When I think about his legacy of really tackling tough environmental challenges and what he’s been able to accomplish, it’s very inspiring. I would love to ask him how he managed the many challenges and different stakeholders to ultimately make progress.
I also thought about Generation Z and my two young adult daughters. When I think about that generation and what’s important to them, I would love to start a conversation about what they think about companies like Shell. How do they see us playing a role in tackling climate change? I’d love to just listen to their perspectives and have a debate.
Lastly, Elon Musk is a pioneer and a visionary. He’s courageous, bold, and willing to fail fast to make progress. Wow. For a company like Shell that’s undertaking transformational changes, learning from someone who is willing to take a risk to commercialize ideas would be fascinating.
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“We must work towards a climate transition that puts people at its centre and leaves no one behind,” Vancity proclaims as part of its commitment to net-zero by 2040. After a year when our environment and social safety nets were tested like never before, this approach seems very timely. Jonathan Fowlie, Chief External Relations Officer, Vancity Credit Union, joined No One Left Behind: How We Build a Just Transition to the Net-Zero Economy at GLOBE Capital to discuss the role of financial institutions in supporting a just transition. We caught up with Mr. Fowlie to learn more about how Vancity has integrated an equity lens into its climate commitments.
Tell us more about Vancity’s net-zero commitments.
We’ve recently released five commitments on climate action and climate justice that take a holistic approach to how we as a financial institution can respond to the climate emergency. It starts with decarbonization and getting our lending portfolio to net-zero. We’re also working to enable responsible investments that create a clean and fair future. This past year has exemplified how a global event can widen the systemic gaps in our economy. The climate emergency is having and could have a similar impact. We’re applying this systemic view to climate change to anticipate community and economic impacts.
Earlier this year, Vancity became the first financial institution in Canada to make a commitment to net-zero emissions by 2040 across your full lending portfolio. To ensure success, you’ve gone one step further by also committing to regular targets on the road to 2040—the first of which will be in 2025. How will you set that 2025 target?
In its most basic form, Vancity was carbon neutral across our operations in 2008. We know we can have a much greater impact on reducing emissions by extending this commitment to what we finance, i.e. the loans we give people to buy homes or start businesses. Our 2025 target will aim to reduce these finance-related emissions.
The first step is understanding the carbon footprint of our loans. If you have a Vancity mortgage on your house, what are your emissions and how do we record that? Our most recent annual report discloses the emissions that we estimate to be associated with our loans. The next step, which we’re undertaking right now, is a rigorous science-based process to understand Vancity’s pathway to net zero with that inclusive lens in mind. Once we identify that pathway, we’ll engage government to ensure we’re aligning with current regulations. Then, we’ll be ready to publicly commit to targets that are aggressive, achievable, and science-based.
What actions is Vancity taking to incorporate equity into its climate work and why do you think it’s important that we include equity in climate finance conversations?
Getting to net zero is important. How we get there is essential. As I mentioned earlier, the pandemic has shown us the impact a global event can have on marginalized communities. We also saw how a financial institution like Vancity can immediately meet those needs. We have a history of financial inclusion—of trying to serve the underserved. That approach has become all the more relevant during the pandemic.
For example, on Vancouver’s Downtown Eastside, health restrictions have interrupted a lot of the services that residents rely on. In the first months of the pandemic, various levels of government introduced new and increased benefits to support the safety and well-being of vulnerable and hard-hit individuals. As a financial institution, our role is to form a bridge between the resources being made available and the people who need to access them.
Our Pigeon Park Savings branch was the only financial institution in the Downtown Eastside that stayed open during the height of the pandemic. We see this as an illustration of financial inclusion and how it can ensure systemic gaps aren’t widened in extreme situations.
We’re taking the same approach to the climate emergency with a view to ensuring the transition to a clean economy will be equitable and just. That means talking a little bit less about decarbonization and climate and more about understanding existing inequities and of course, including marginalized communities in that conversation.
When it comes to the just transition, what do you think is the biggest opportunity and the biggest challenge?
The biggest challenge is ensuring the transition is just. What do I mean by that? We’re at a place where we look ahead to the effects of climate change and we’re still not entirely clear on the questions we need to ask, the things we need to measure, and the actions we need to take. Some are apparent, but some, as we saw during the pandemic, emerge as secondary and tertiary issues. How do we ensure we can adjust and be flexible?
Conversely, the biggest opportunity is to re-imagine our economy. How can we shift, innovate, create leaders, and form the jobs of tomorrow? We’ll need to consider the skillsets of people across our economy. Part of that is considering the workforce that will need to transition from a job that might not exist 10 years from now into a job that is driving innovation. It’s also about creating opportunities that make our economy more equitable and inclusive.
When you ask people: do you think there needs to be a fundamental change towards an economy that is cleaner and fairer? Unanimously, you get a yes. It’s not at all clear exactly what that future looks like, but that consensus creates an opportunity to chart a new path.
How can financial institutions take a leadership role in the just transition?
Financial institutions like credit unions and banks make crucial decisions every day about where money goes, what gets funded, and who benefits. So, we have a crucial role to play in determining the future economy and frankly the future of our planet. Accordingly, there are a number of questions that all financial institutions should be asking: Are we just offsetting climate impacts? Are we working to avoid them in the first place? How are we measuring the changes to our balance sheet in a rigorous way that ensures transparency? Finally, how do we ensure that the actions we are taking are leading towards an economy that is both clean and fair? I strongly believe that we have an obligation to understand the impacts of our decisions on where to allocate capital, because those who have the least to do with causing climate change in the first place are those who will be impacted the most and who will have the least available resources to adapt. We have a unique opportunity right now to learn from the past and explore what it means to truly build back better.
If you could ask the GLOBE Capital community to take one action, what would it be?
I’d ask the GLOBE Capital community to bring an equity lens to every action they take on climate. For example, when you’re looking at climate risk across a portfolio of buildings, consider the demographics of the locations and local people’s ability to adapt. Considering equity means asking: are there choices that we can make today to ensure we’re not only protecting our investments against climate risk, but we’re also fostering equity and resilience? It goes back to the premise that yes, we need to decarbonize. We could do that overnight by just stopping funding a variety of activities, but that’s neither practical nor will it lead to an equitable economy and society. So, we need to ensure we’re inviting everyone into the conversation and framing that conversation in a way where everyone, particularly marginalized communities, can see themselves reflected.