Businesses need government support to reach climate goals
By Adam Freill
Construction Green ConstructionKPMG survey reveals most companies are taking action, but significant call for greater government support, including tax relief.
Most Canadian business leaders are committed to integrating environment, social and governance (ESG) practices into their business strategies but say they need more help from government if Canada is to transition to a greener economy, finds a new KPMG in Canada survey.
The study, conducted for the audit, tax and advisory firm, polled more than 500 medium-sized businesses, with eight in 10 calling for additional tax incentives and investment tax credits to make it feasible for their companies to adopt clean technologies and clean energy sources.
“Canada’s business leaders are ready to make the green transition but need government to create a more supportive environment, including further tax relief to help them transition away from carbon-intensive products and invest in clean energy and net-zero technologies,” stated Lucy Iacovelli, KPMG’s Canadian managing partner for tax. “More than eight in 10 indicated that they are using existing government incentives to reduce their environmental footprint, but to stay competitive, they believe it is vital that Canada keeps pace with the new green investments and tax measures being adopted in the U.S.”
Among the survey’s key environmental findings were that 82 per cent of respondents believe small- and medium-sized enterprises are key to the green transition in Canada, but 77 per cent are finding the process of decarbonization increasingly complex. More than 80 per cent feel government investments need to grow significantly to develop the clean technologies/solutions that businesses need to meet Canada’s climate commitments.
On the economic front, 84 per cent of respondents think inflationary pressures will last longer than expected, stretching into 2024, with 81 per cent pegging this continued volatility, in part, on the green energy transition as well as supply shocks caused by deglobalization and rising political pressures.
“While committed to a green future, high inflation and rising interest rates are making the transition and the required investments increasingly more expensive for business,” explained Mary Jo Fedy, KPMG’s national enterprise leader. “With the economic volatility likely to drag on into the foreseeable future, more than eight in 10 want government investment to increase significantly in order to develop the clean technologies and solutions that businesses need to meet Canada’s climate commitments.”