This information is from the 2022 KPMG CEO Outlook survey. To read the findings from the most recent KPMG CEO Outlook survey, click here.

There’s an ESG story to be unearthed in every organization, and increasingly, Canadian CEOs are compelled to tell it. However, this has proved easier said than done. In fact, it is no longer a story but rather needs to be a cohesive, well formulated plan. Leaders are struggling to understand what ESG means to their organization, who is responsible for integrating the ESG mandate across the enterprise, and how they are executing on their environmental, social, and governance objectives.

Any organization can declare plans to green their operations or tackle social issues, but telling a compelling and cohesive story is much more challenging. The story has become a very sophisticated strategy which is integrated across the business and is credible and doable. Customers, investors, and employees are savvier than ever about spotting if companies are genuine about their ESG responsibilities or simply paying lip service to them. Getting it right requires organizations to take a true strategic and integrative approach to transformational change.

More and more companies are appointing Chief Sustainability Officers in an attempt to gain a holistic view over ESG. The themes behind E, S and G are interconnected. For example, tackling climate risk without addressing employee health and safety or assuring appropriate controls over carbon credit purchases, would miss the target.


61% of Canadian CEOs say their company’s digital and ESG strategic investments are inextricably linked

The ESG imperative

CEOs have a responsibility to establish and meet significant ESG milestones during their tenure, be they environmental (e.g., Net Zero), social (diversity and inclusion), or governance (compliance and regulations) in nature. Missing the mark can threaten an organization’s longevity by impacting its brand, financial strength, access to capital or create legal liabilities.

This expectation is known to a majority of Canadian CEOs, 79% of which say achieving gender equity in their C-Suite will help to assure they meet growth ambitions, and a third who are planning to take a more proactive approach to social issues in general.


61% of Canadian CEOs are seeing increased demand from stakeholders for increased reporting and transparency around ESG issues (69% global)


71% of Canadian CEOs believe stakeholder scrutiny of their performance on ESG issues will only continue to accelerate


91% of Canadian CEOs say they are willing to divest a profitable part of the business that was damaging their reputation (up from last year at 80%), compared to 69% global

Canadian CEOs cite changing regulations, patchwork standards, and lack of resources as their main stumbling blocks. Yet, another struggle is a lack of visibility regarding ESG risks and opportunities, how they impact operations in the short and longer term, and their financial impact on the organization.

 Top challenges for Canadian CEOs in delivering their ESG strategy

It starts with resolve

For an ESG approach to be effective, the business must build consensus around the E, S, and G opportunities that exist in the organization and why they’re worth pursuing.

Answering why is particularly important. The easy response is that demonstrating a commitment to ESG initiatives is now necessary for doing business; that "going green" or "taking a stand" is something today's stakeholders demand and must, therefore, be part of a company's strategy. However, CEOs that dive deeper will find ESG opportunities specific to their organization that can unlock more meaningful value - including through risk mitigation, long term value preservation, stronger public trust, engaged workforces, loyal customers and in some cases even operational savings.

Driving accountability

A CEO is not the sole author of their organization’s ESG story. CEOs do have ultimate accountability but can only build and deliver on a strategy informed internal and external stakeholders. An ESG strategy is relatively unique in that it is both complex and requires multiple internal parties to participate. Operations, finance, HR, legal, marketing and others all need to be involved. Front line operations are needed to weigh in on decarbonization solutions and pain points on social interactions. Finance will need to assist with the financial analysis, HR on the social aspects and legal, risk on appropriate regulatory and governance measures. Chief Sustainability Officers can help CEOs bring all of these together.

Departments taking a leading role in ESG and sustainability reporting1:


ESG and sustainability (88%)


Finance (42%)


Operations (19%)

Finance departments are getting more involved. They can introduce the appropriate rigor in analyzing various solutions to address a company’s carbon emissions or how climate risk might affect operations in the near and longer term. Of course, as regulations for ESG reporting become effective, finance departments will need to gather the data to do so in a controlled manner.

53% of employees across finance, sustainability, and technology believe that the C-Suite and board have the right level of focus on ESG issues1

Building organization-wide resolve is key to getting an ESG strategy off the ground. Engagement of the above stakeholders can help ensure that it becomes a joint mission. 

Insights from a commissioned study focusing on ESG, climate change and sustainability conducted by Verdantix on behalf of KPMG in Canada, July 2022. The data herein is based on a survey of 150 quantitative and 30 qualitative interviews with ESG & sustainability industry professionals across Canada.

Impact, measurement and reporting

Understanding the impact of ESG strategies is critical but not always easy to decipher. This resonates in 2022's CEO Outlook, where while 32% of Canadian CEOs say their ESG programs have improved financial performance, 60% say the impact has been negligible, and 12% say they have failed to create value from ESG investments.

Well-constructed ESG strategies should include metrics and targets that can get measured. External stakeholders are putting more pressure on companies to report ESG metrics. Regulators like the SEC and the International Sustainability Standards Board (ISSB) are preparing to roll out disclosure requirements. Accordingly, companies are now looking to invest in the technology needed to collect and analyze data required for such reporting.

Sources of increasing pressure for reporting and transparency around ESG issues

A single source of truth

When we talk about a “single source of truth” with clients, we often refer to a data layer that all ESG leaders can access and reference in order to align on ESG outcomes and avoid making claims that can’t be backed – or are outright disproven. Here is where IT departments play their own integral role in establishing systems and processes for collecting data from within the organization, its suppliers, and third parties.

You’ve got to start to start

They call it an ESG journey for a reason. Regulations and government action (e.g., on carbon pricing) are fast approaching. Taking action on reducing emissions, making changes to the workforce or implementing new governance policies can be lengthy processes. Yet, as important is to train the organization, from the C-suite down on the ESG imperative and the collective effort required.

Key actions

  • Zero-in on your 'why': Leverage ESG-relevant data from across your operations to dive deep into what can change and how those changes will impact your business, people, technologies, processes and bottom line.
  • Evaluate your talent: Does your organizational structure support an integrated approach to ESG, and do you have the right people, skills and expertise positioned across your organization to make meaningful progress?
  • Engage with your operational/frontline people: Your people “on the floor” (sales, engineers, buyers, etc.) have a first-hand view as to how the company can improve across each of the E, S, and G pillars. Engage them and leverage their in-depth knowledge.
  • Conduct scenario analyses: Engage your finance and operations teams to analyze the impact of alternative approaches to decarbonization (e.g., renewable energy, vendor realignment, etc.). Again, HR, marketing and other departments should weigh in on the impact to employees and customers. Converting actions into monetary value and running sensitivities (e.g. based on carbon prices, retention metrics, and customer loyalty) will provide valuable insights.
  • Get started (or keep going): Don’t let perfect be the enemy of good. If you’re struggling to craft your ESG strategy, take small, iterative steps. A critical first step for CEOs is to engage their board and c-suite to create awareness and commitment.

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