Recommendation 7: Use foresight methodologies to plan for the long term and increase strategic resilience.

While human rights risk assessments can identify current vulnerabilities or crisis hotspots, they do not thoroughly examine the uncertainties of the future and the long-term impacts that may come with it. To understand how a business and its stakeholders may be affected, companies should develop an understanding of a myriad of potential future scenarios, influenced by climate change, human rights, and other social, economic, and political dimensions. Companies can test the resilience of their strategies or approaches against these scenarios and ensure that they are appropriately addressing the climate and human rights impacts that may arise.

Beyond supporting the creation of resilient strategies, the process of developing scenarios creates an opportunity to bring together decision-makers addressing climate and human rights risks throughout the company, providing the added benefit of promoting cross-department collaboration.

The Recommendations of the Task Force on Climate-Related Financial Disclosures, published in 2017, explicitly call for the use of scenario analysis to assess the potential business implications of climate-related risks and opportunities, and it is increasingly becoming a standard practice. However, the use of scenarios for the consideration of human rights is not yet mainstream, nor is it referenced in key frameworks, such as the UNGPs.

Recommendation 1: Understand and identify rightsholders and communities most affected by the climate crisis.

Physical climate impacts, as well as climate solutions designed and deployed without input from relevant rightsholders, exacerbate existing inequalities and vulnerabilities of certain communities, resulting in disproportionate impacts to those populations. In order to build effective resilience strategies that take into account both climate resilience and human rights, businesses must understand how these vulnerabilities manifest across their value chains. This can be done by assessing the human rights impacts of climate change as part of existing risk assessment processes or through targeted human rights impact assessments or climate risk assessments.

Recommendation 4: The federal government—with leadership from the Privy Council Office—should work with the Sustainable Finance Action Council, securities and financial regulators, provincial and territorial governments, standards associations, and Indigenous organizations to accelerate the development and require the use of quantitative and comparable company- and product-level metrics, standards, and certifications that measure climate, environmental, social, and Indigenous performance.

Recommendation 2: The federal government should set legally binding emissions milestones only at the national level.

Legally binding milestones are particularly important at the national level given Canada’s commitments under international processes. As such, we provide additional advice specifically to the federal government.

We recommend that a federal climate accountability framework set binding milestones only at the national level. Legally binding sectoral or provincial and territorial milestones risk creating a rigid approach that raises the overall cost of reducing emissions. In the absence of a trading mechanism, binding subnational milestones would force GHG reductions in particular parts of the economy or regions when there are more cost effective or practical options to reduce emissions elsewhere. Moreover, binding subnational milestones would require governments to directly confront difficult decisions about regional burden-sharing (sectoral milestones would do the same, albeit indirectly) only to have these debates resurface when the details of policy mechanics were being discussed. Forcing these debates to occur at the early, milestone-setting stage is likely to be divisive. It risks making it even more challenging to move over time toward better policy coordination and convergence in federal and subnational policy ambition.

However, it is useful to provide public information on the contributions provinces, territories, and sectors are projected to make to the national budget or target to illustrate implications of pathways rather than to prescribe explicit reductions at these levels. Detailed projections strike a balance by providing public, transparent projections for sectors and regions that can guide policy while still remaining non-binding. They can increase transparency, helping to inform challenging conversations about the contributions of different sectors and regions.

In terms of process, we recommend that the federal government set the national milestone pathway in consultation with other governments, stakeholders, Indigenous Peoples, and a non-partisan expert advisory body. Allowing the federal government to make the final decision, but with requirements that it consult widely, ensures that regional and sectoral circumstances and diverse perspectives are considered without paralyzing the pathway process. Similarly, including reporting obligations that require the federal government to justify its decision in the event it rejects the expert body’s advice creates incentives to ensure milestones are rooted in evidence and science.

Recommendation 1: The federal government should legislate a framework for climate accountability consistent with best practices; other orders of government should consider implementing them as well.

Climate accountability frameworks—implemented according to the best practices we identify—can help governments across Canada. To follow through on its commitment to enact legally binding emissions milestones, the federal government should legislate a climate accountability framework nationally. Provinces, territories, Indigenous governments, and municipalities should also explore implementing their own accountability frameworks, as British Columbia and Manitoba have done.

Subnational climate accountability frameworks could complement a national framework in multiple ways. First, given Canada’s shared jurisdiction over climate policy and the fact that some policy instruments are uniquely available to particular orders of government, Canadian climate policy would be more robust if subnational governments were accountable to their citizens for policy implementation in the same way the federal government would be. Second, subnational frameworks would clarify the intended plans of provincial, territorial, Indigenous, and municipal governments, providing a clearer picture of subnational ambition and, where applicable, the gap that would need to be closed under the federal framework in order to meet national milestones. Third, having both national and subnational accountability frameworks would surface issues where climate policy ambition differs across jurisdictions, clarify regional tensions slowing progress on climate policy under the federal framework, and create conditions for ambition and policy to converge over time.

When implementing climate accountability frameworks, governments in Canada can look to the experience from other jurisdictions we present in our case studies. […] To deliver on the governance processes and transparency mechanisms that a climate accountability framework requires to function effectively, all six of these common elements must be in place:

• Formalizing climate governance structures and processes
• Clearly defining roles and responsibilities
• Establishing interim emissions reduction milestones
• Producing action plans to meet milestones
• Requiring monitoring and reporting
• Broadening the scope beyond reducing emissions

Second, governments in Canada should implement these common elements consistent with best practices. The best practices we identify […] include the following:

• Legislating governance structures, processes and long-term targets
• Ensuring independent advice and assessment
• Supporting a whole-of-government approach
• Providing clarity on how milestones are set and will evolve
• Defining emissions reduction milestones as cumulative carbon budgets
• Linking progress on milestone commitments to policy course corrections
• Requiring government to provide formal responses to independent advisory reports
• Integrating multiple objectives into pathways and policy

Recommendation 2: The federal government should convene provincial, territorial, Indigenous and municipal governments to co-develop a more coordinated approach to governing adaptation.

Recommendation 1: Take bold action to tackle the climate crisis, while ensuring lower income households are not made worse off, and indeed, that social justice and economic security is enhanced.

Recommendation 15: Supporting Indigenous-led opportunities that accelerate clean growth. Indigenous-led initiatives can achieve multiple economic, social, environmental, and climate benefits simultaneously. Additional support for Indigenous protected areas, land management, renewable energy projects, resilient housing, fire management, and other opportunities linked to climate change objectives could help accelerate clean growth progress in Canada.

Recommendation 14: Slowing the loss of climate-related ecosystem services. Slash burning practices used by logging companies, draining of wetlands for agriculture or development, deforestation for industrial activities, and many other actions are decreasing the benefits nature provides to people today and will provide to people in the future. Climate change will further exacerbate many of these pressures on ecosystems.

Recommendation 4: Provide resources and subsidies to low-income households to improve energy efficiency, install electric heat pumps, household-level solar and other renewable energy sources.