Environmental responsibility is becoming increasingly important to the majority of Canadians. Many of us are realizing the importance of implementing net-zero policies. These policies aim to balance the amount of greenhouse gases being produced and the amount being removed from the atmosphere. The federal government has a policy agenda to reach emissions reduction goals by 2035 and 2050. A transformation in the transportation sector is at the core of achieving these goals.
Current research indicates that the transportation sector in Canada is responsible for 29% of greenhouse gas emissions. Passenger vehicles and other light-duty vehicles account for half of this.
Behavioural change is needed to shift consumers and firms away from conventional fuels and technologies toward cleaner options, such as electric vehicles and biofuels. It is accepted that economic growth correlates to an increase in energy use in Canada. However, it is important to note that over the past two decades, energy use has risen only by 22%, despite an increase in GDP of 46%. This is due to various policies at the provincial and federal levels, along with changing behaviours in the public.
Achieving net zero in the transportation sector is challenging due to its significant economic footprint. It is one of the biggest sources of revenue on the provincial and federal levels. This revenue source is used for other sectors such as health care and education. The question then becomes, what other revenue streams can be generated to make up for the inevitable decline as we continue to strive for net zero? This is a hurdle that will have to be overcome if we are to make the changes necessary to reach the emissions reduction goals.
Many of the companies you invest in are fully aware of the environmental impact of their business practices. Corporate Social Responsibility is an important part of many businesses and is one of many ways you can ensure that the company you are investing with aligns with your values. Shareholders are looking for accountability from their organizations and there is an expectation of tangible plans for a reduction in their carbon footprint.
Sustainable investing is a strategy that can align our environmental and financial goals. As investors, we are seeking out these very companies to add to your portfolio. These companies are reforming their business practices, adopting new ones, and providing us with the tools to make the change possible.