Finance leaders | The new champions of ESG standards?

The mission of the ISSB, inaugurated almost a year ago in Montreal, is ambitious. The organization intends to create environmental financial disclosure standards for all companies in the world. This common language will notably make it possible to easily measure the environmental footprint of a company as well as its climate risk.

“It’s mostly a regulatory issue,” says Iwan Meier, full professor in the finance department and holder of the Chair in Sustainable Finance at HEC Montreal. In the same spirit, the institution launched in 2022, in collaboration with the University of Oxford, the Measuring Beyond project, aimed at standardizing Environment, Society and Governance (ESG) measures.

According to the expert, SMEs and large companies will not face the same challenges when it comes time to apply these new standards. “The ISSB is based on existing frameworks, which large companies are already used to. They are well prepared to produce an annual report integrating ESG issues. Many are already doing it,” he said.

Detailing its sustainable strategy or calculating its climate resilience is likely to be a lot less obvious for an SME, and even less for a start-up. “Some don’t even have a CFO, so change will sometimes be difficult in the short term,” notes Iwan Meier. But in my opinion, it will become as standard as producing the financial statements. »

Monica Rocheleau, General Manager of Financial Executives International (FEI) Canada, Quebec Chapter, reminds us that sustainable development issues traditionally did not concern chief financial officers. Their job was to deal with the numbers, leaving it to others to deal with environmental or social issues.

“Five years ago, the reaction was still mixed,” she adds. Today, they know it is necessary. The trainings and workshops with other CFOs on the subject are also popular, according to her.

One would think that adapting to these new rules would go like a letter in the mail for Lufa, a company that has ESG standards at the heart of its business model. The reality is not that simple.

“We are already advanced in this area, underlines the vice-president finances, Jean-Michel Vanier. The environment is one of our priorities. The production of vegetables in greenhouses on the roofs of the city, for example, consumes less water and less energy than a traditional greenhouse, he illustrates. The company also composts on site, reducing product waste, and its local delivery, mainly by electric vehicle, minimizes emissions.

If the environmental aspect remains to be quantified, the impact of the social aspect is easy to see. “We share data from our direct giving program in real time on our website. This dashboard makes it possible in particular to know the number of people supported by the program and to track contributions.

The company intends to extend this approach to its environmental and governance aspects. “We’re already tracking a lot of metrics. We will only add other indicators to track our environmental performance over the years. He adds, however, that the transition is unlikely to happen overnight and that he will likely need help from the ISSB.

The vice president, finance, hopes to eventually become an ESG standards champion. “I think we are already leaders in the environment, in food. I wish we could be in this area too. »