Grainswest - Spring 2025

Spring 2025 grainswest.com 29 players on board, providing grassroots recommendations to identify opportunities. She suggested the Index will never be complete because sustainability is a continuum, not an endpoint. Farmers should provide an active voice to guide the discussion via their agricultural advocacy groups, added Drevet. The Index is supported by the Centre for Agri-Food Benchmarking, which is part of the Canadian Agri-Food Policy Institute, an ag sector thinktank headed by managing director Tyler McCann. McCann noted the ESG movement has been primarily driven by consumers, private companies and investors, not governments. He fingers Maple Leaf Foods, led by its outspoken ESG proponent president Michael McCain as a strong example of a company that has a pronounced focus on sustainability from production to packaging to people. McCann echoes Drevet’s sentiment about the EU leading the charge and adds Australia to the list. He is realistic with his local evaluation. “We’re a little behind here,” he said. “We struggle; it’s not as good as it could be. We still have issues where across the sector emissions continue to trend upward.” While not massive, the rise is steady. According to the federal government, in 2005, ag accounted for 8.6 per cent, or 66 megatonnes of all greenhouse gas emissions in Canada. In 2022, that number jumped to 9.8 per cent, or 70 megatonnes. Most other industries have either slightly gone down or generally maintained their percentage between 2005 and 2022. The exceptions are oil and gas, which noticeably climbed from 25.6 per cent to 30.6 per cent, and electricity, which dramatically decreased from 15.3 per cent to just 6.6 per cent over that same time period. He added that the real challenge, however, is data and its management. People and organizations in the value chain must be able to produce meaningful data, but it cannot be so burdensome or expensive to produce that it destroys any extra value that may be created via market premiums. A high- level focus as a country doesn’t cut it anymore either. To say Canada is a leader in emissions reduction sounds lovely, but means nothing, and isn’t even relevant, as he sees it. “That oen is not good enough for ESG compliance because investors and consumers don’t want to know how a country is doing,” he explained. “They want to know how a company is doing, or how a specific product is doing. That means you need a much better understanding of the emissions the entire way along that value chain.” Nothing will change in the immediate future, yet McCann believes a level of change will come sooner than later. Such changes may occur at the bank, which may offer discounts on interest rates or insurance if you have a good ESG story to tell about the farm. He does believe a day will come when a farmer will not be financed unless they prove their farm is sustainable according to multiple metrics. Today, he encourages farmers who are part of value chains with ESG goals to really know what is required of them now and in the future. “The reality that ESG, or sustainability disclosure, is coming is important,” he said. “This is a pendulum that’s swinging back and forth, and it seems like we are at a moment where we’re swinging back from the really strong, pro-ESG agenda to a more business focused approach. I don’t think the pendulum swings back to where this is never going to be important. It may mean rather than this being important in two years, it becomes important in 10 years.” It is certain, he said, that everyone in the value chain must continue to understand the importance of data and how to leverage it for maximum gain. He acknowledged the main point of scrutiny around ESG is why do this at all? And, to what end? He points out that farmers change when it makes sense and a benefit is present. There is a real opposition to ESG by many, and he believes it’s due to a poorly defined pitch. “Maybe it’s not clear what the benefit is when there is limited understanding of the value proposition. That’s where you get legitimate reluctance around what that change could mean or be,” he said. “We all need to do a better job coming up with the answers and explain what’s in it for the farmer and why.” McCann believes this is where data will ultimately prove a benefit to farmers. “We want to be able to produce the data so people can see, look and understand the progress Canadian agriculture has made. The data can then be used by governments to help them make better decisions with trading partners when it comes to negotiations and the sector can use it to better position itself.” The critiques of ESG appear just as familiar as its hallmarks. A common refrain is that these three letters are repackaged corporate socialism, also called stakeholder capitalism or woke capitalism. In a series of essays for the Fraser Institute, University of Queen’s law professor Bruce Pardy outlines the pitfalls of ESG. He writes that it assesses corporate value by measuring corporate commitment to political objectives instead of a primary focus on profitability, which leads to threats made against companies that object or disagree with such mandates. These mandates oen now include climate action, DEI programs and other social goals. Pardy suggests stakeholder governance, “turns companies into social welfare institutions and gives business leaders licence to pursue ‘social good’ at their discretion with other peoples’ money.” Profit is the usual determinant of a company’s worth, but not on the playing field of ESG. The worth is gradually being replaced with an ESG rating given out by an agency to determine a company’s relative sustainability. Pardy says this amounts to social credit scoring for corporations. His essay also issues a stern warning to his audience. “As ESG reporting becomes standard and increasingly mandatory, so must ideological compliance. Along with digital currency and digital identification, both presently in development, ESG represents centralized, political supervision of the economy.”