Seismic ESG/Sustainability Shifts + Tariff impacts: 3 gifts in disguise for Canadian Companies

?In the past several days, I've received numerous calls from client boards and leadership teams about two pressing issues: the impact of US tariffs and changes in ESG/sustainability regulations and customer sentiment. These topics are converging in significant ways for many Canadian companies.??

Questions from clients this week:??

• COO (Private Company):?"How do we navigate market demands when half our customers require DEI and climate policies and targets, and the other half reject them? Feels pretty no win here."??

• Head of Investor Relations (Public Company): "We need to review some of our long-term sustainability commitments that we don't have full line of sight on achieving - how can we make those adjustments while preserving trust?” ?

• ESG Committee Chair (Public Company):?"With tariff impacts on our top line and deferral of some of sustainability disclosures, the Board wants a comprehensive outside review of all of our sustainability initiatives and disclosures. What’s the best way to do this?"??

?All 3 questions have an important commonality: They aren’t “sustainability” questions - they’re business questions. Addressing these questions and concerns means treating sustainability topics or issues the same way we would any other corporate strategy, investment or operational decision, because that’s what these are: business risks, but also opportunities. ?

?Why this is an opportunity:??

I believe the current shifts to reduced or deferred sustainability disclosure regulations, the divisive customer sentiment on ESG/Sustainability, and threats to revenue from US tariffs, present a unique opportunity for Canadian companies. ?

Now is an ideal time, while companies tackle existential and strategic questions on markets, customers, values and purpose, to realign sustainability activities to focus more on value preservation and value creation and right size compliance and disclosure activities. This is the chance to re-set the strategic sustainability roadmap with the corporate strategy - and focus on the right things in the right order as part of the business instead of a separate activity. ?

?Three gifts to leverage: Canadian companies can seize the timing and the opportunity in three main ways.? The specifics will and should differ by company and sector. ?

• Scenario analysis and resource re-alignment: The important work to reassess markets, customers, supply chains, policies, activities and strategy is the foundational work needed to review sustainability initiatives against. Consider re-deploying a portion of your focus and resources from disclosing and checklists to embedding these resources into your strategic scenario analysis work - spending time identifying the things that truly matter for long term success. ?

• Integrate the sustainability actions you plan to keep: Take advantage of the opportunity to close the gap on doing the hard work of properly integrating the initiatives that matter into the business as you make these key strategic, structural and operational decisions. This takes time to do effectively, so companies should start now.

• Shift from a disclosure and compliance approach to providing tailored trusted useful information: Use the pause/scope change on disclosures to figure out how to measure those things that matter at the right frequency and level of fidelity and, who needs that information, and in what form. That doesn't mean writing a longer annual sustainability report with more appendices. That means providing more valuable decision-useful information to both your business and to stakeholders and all parties having more trust in that information.