Market News

 March 26, 2007
Canadian executives and climate change: survey

 Toronto, Canada (GLOBE-Net) -- According to a survey of Canadian executives, the majority of business leaders are concerned about climate change and support government action to reduce emissions.

The latest C-Suite Survey conducted for The Globe and Mail's Report on Business and Business News Network focused on climate change and business attitudes. For the report, the Ottawa-based Gandalf Group surveyed asked 139 chief executive officers, chief financial officers and chief operating officers from a list of Canada's 1000 largest.

The results show that the majority of executives are both concerned about climate change and support regulations, but that attitudes differ across sectors and regions.

Although the sample size is relatively small, it does represent a broad cross section of the Canadian economy. While not large enough to be statistically precise, the survey does offer a window into corporate views on climate change in Canada.

Asked about the most important issue facing Canada today, 12 percent said the environment or climate change, just behind economic issues (13 percent) and tied with global competitiveness.

When the question was changed to the most important issue facing Canadian businesses today, eight percent overall cited the environment, behind global competitiveness, the Canadian dollar exchange rate, and the skilled labour shortage.

But while there are clearly other issues for executives to consider, concern for climate change is generally high. Overall, 33 percent said they were 'very concerned' about climate change, and 32 percent were 'somewhat concerned'. Only 11 percent were 'not at all concerned'.

Those attitudes varied greatly according to company size, region, and business sector, however:

  • Eighty four percent of executives in companies with more than 1000 employees said they were at least somewhat concerned about climate change, compared to 46 percent in firms with less than 200 employees.

  • 43 percent in Ontario said they were very concerned, compared with 34 percent in Atlantic Canada and Quebec, and only 21 percent in the Western provinces.

  • 40 percent in the services industry said they were very concerned, along with 30 percent in the manufacturing sector and 26 percent in the resources industry. In contrast, 40 percent of oil and gas executives said they were 'not at all concerned'.

No 'business community perspective'

These differences in concern for climate change lead to divergent views on how Canada should tackle the problem.

Overall, the majority (63 percent) of executives said that their company believes Canada should try to reduce greenhouse gas (GHG) emissions but not attempt to meet the Kyoto Protocol target, while 28 percent said that the country should do whatever is necessary to meet Kyoto. Support for Kyoto was greatest in the East and lowest in the West.

Asked about specific government measures, most executives 'strongly support' or 'somewhat support' a wide range of government actions, with only 22 percent opposing federal limits on GHG emissions. The proposal with the greatest opposition was a carbon tax, with 35 percent against.

More than half of executives 'strongly support' voluntary programs to encourage emissions reductions. Nearly half said they strongly support retrofitting of infrastructure and federal support or tax credits to encourage retrofits. Building new nuclear plants received strong support from 37 percent of executives, and a further 44 percent said they 'somewhat support' nuclear expansion.

In terms of current government proposals, 23 percent strongly support and 51 percent somewhat support the federal Clean Air Act, with strongest support in the oil and gas sector. However, only 24 percent think the Act will be enough to reduce emissions and fight climate change.

For their own companies, fifty three percent of executives say their company has undertaken measures to reduce greenhouse gas emissions, with energy efficiency the leading option (15 percent), followed by use of alternative fuels or hybrid vehicles (14 percent) , investments in capital improvements (10 percent), and air emissions controls (10 percent).

The Gandalf Group's analysis shows that "by and large, there is not a 'business-community perspective' on the climate change challenge." Sharp divides exist across business sectors and regions. For example, central Canada shows strong support for Kyoto and sees little business costs as a result, while Western executives see large costs and do not support Kyoto targets.

These perspectives should not be surprising, given the diverse economic situations and natural resources across the country, but they do illustrate the challenge that any government faces in passing climate change legislation that is both effective in reducing emissions and palatable to the wider business community. For while many executives see the Clean Air Act as insufficient, those in the West believe their businesses may be crippled by legislation that resembles Kyoto.

It should also be noted that less than 10% of respondents said their company was among the top 700 Large Final Emitters, which represent nearly 50% of Canada's emissions. Attitudes towards GHG regulation and Kyoto could be more critical among that group.

On a positive note, the survey does show that Canadian executives are concerned about climate change, are taking action to reduce emissions from their own companies, and are ready to embrace federal action on the issue.

The full C-Suite Survey results can be found here (PDF).

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