Half of entrepreneurs are taking climate matters into their own hands, finding they recoup their climate investments in only 16 months
MONTREAL, December 6, 2023 – Climate change is one of the most pressing challenges of our time, and businesses that do not act are increasingly at risk of getting left behind. That’s why half of entrepreneurs surveyed are choosing to act, prompted by this risk and an interest from their customers, employees, and financiers. The survey shows that there are significant benefits to be gained such as improved employee satisfaction, reduced costs, and an enhanced brand reputation.
Leading the way
Half of Canadian business owners have already taken actions to reduce their carbon footprint over the last five years.
The most proactive companies—those that have taken several actions—saw significantly more annual sales growth than others: 26% posted annual sales growth of 10% or more over the last year, compared to 12% of those that have not taken several actions. And it only took them 16 months on average to recover their climate investments.
“Entrepreneurs are incredibly important to their communities and to our country. They are equally important to reaching our climate goals. BDC estimates that they account for about 52% of greenhouse gas (GHG) emissions from businesses and 40% of Canada’s total GHG emissions. There is simply no net zero without Canada’s entrepreneurs, and the good news is that many of them have already started taking steps toward a greener economy,” said Sandra Odendahl, Senior Vice President and Head, Sustainability, Diversity and Partnerships at BDC.
Waiting or facing challenges
If half of entrepreneurs have chosen to act, the other half have not acted yet. Of those, 18% intend to do so within the next five years and 32% have no intention of taking action.
Some of the challenges that entrepreneurs cite for not being more proactive on climate include various other business priorities, a lack of internal expertise, and fewer financial resources to allocate to climate actions than larger companies.
“The pressure on business owners to adapt to the current business environment and move to a green economy will only keep increasing. According to another BDC study published earlier this year, the proportion of major buying organizations that require their suppliers – mainly small business owners – to disclose environmental, social and governance (ESG) information is expected to reach 92% in 2024. Entrepreneurs who lead the charge will be seen as leaders while others risk getting left behind. Small businesses can adapt, they have proven it time and time again,” said Pierre Cléroux, Vice-President, Research and Chief Economist at BDC.
What BDC is doing to help business owners fight climate change
As Canada’s development bank, our role is to help entrepreneurs rise to meet the biggest economic, social, and environmental challenges of our time. BDC Capital, the investment arm of BDC, has committed more than $1.8 billion to environmental initiatives since 2018, including $1 billion for its Cleantech and Climate Tech Funds. It also launched a $150 million Sustainability Venture Fund in April 2023.
We are on this journey with entrepreneurs and committed to testing new solutions to help them, including two recently launched pilot projects. Knowing that buildings contribute 17% of Canada’s GHG emissions, we recently kicked off two initiatives targeting this sector with a combined $125 million lending envelope. First, the Green Building Certifications Solution is a $105 million envelope for new construction, renovation or the acquisition of buildings that meet specific green building certifications such as LEED and Energy Star. Second, the $20 million Energy Retrofit Solution focuses on renovation projects that achieve 20% annual energy savings or more through at least two energy-saving measures. Both solutions come with free consulting, along with support in identifying relevant grants and subsidies.
“We are continuously hearing from entrepreneurs that they are interested in doing more to reduce their environmental footprint but do not know where to start. That’s why we created the Climate Action Centre. Launched earlier this year, the Climate Action Centre is a resource hub that has already been visited over 130,000 times by entrepreneurs looking to reduce their business' carbon footprint,” added Sandra Odendahl. With articles and tools being added regularly, the Climate Action Centre aims to turn climate action into meaningful business opportunities. It covers key topics to maximize business owners’ impact, from building and transportation management to process optimization and climate leadership.
Walking the talk
We are also working to reduce our own emissions. Our approach starts with first reducing operational emissions, mostly associated with real estate facilities and business travel. We are pleased to see our facilities energy use decreasing on an annual basis, and we have achieved LEED certification for 11 BDC business centres.
Going forward, we plan to eliminate GHG emissions associated with our facilities through an increased use of renewable and non-emitting energy, and we are optimizing the business travel of our 2,900 employees with a goal of reducing total operational emissions by 40% by 2026. For any emissions that we cannot reduce through other means, we will purchase high-quality carbon offsets to achieve net-zero operations by 2028.
“BDC still has a long way to go but we are committed to becoming a sustainability leader and helping entrepreneurs build and grow sustainable businesses,” concluded Sandra Odendahl.
As Canada’s bank for entrepreneurs, BDC is a partner of choice for all entrepreneurs looking to access the financing and advice they need to build their businesses and tackle the big challenges of our time. Our investment arm, BDC Capital, offers a wide range of risk capital solutions to help grow the country’s most innovative firms. We are one of Canada’s Top 100 Employers and Canada’s Best Diversity Employers. For more information on BDC’s products and services and to consult free tools, templates and articles, visit bdc.ca or join BDC on social media.