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KPMG’s Carbon Solutions

KPMG’s Carbon Solutions

Business implications of Ontario’s climate action plan

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KPMG’s Carbon Solutions

KPMG’s Carbon Solutions

Business implications of Ontario’s climate action plan

Background: The government of Ontario is proposing to implement the Climate Change Mitigation and Low-Carbon Economy Act (the Bill). The Bill intends to establish a long-term framework for climate action. Amongst others, it provides a foundation for Ontario’s carbon cap and trade program and will provide support to achieve Ontario’s greenhouse gas (GHG) reduction targets of 37 per cent below 1990 levels by 2030 and 80 per cent by 2050. The carbon cap and trade program is expected to be in place by January 1, 2017.

In light of these changes the already existing Ontario Greenhouse Gas Emissions Reporting Regulation has been amended and the amended requirements will apply to calendar year 2016. Reporters will have until June 1, 2017 to submit their annual GHG report. Mandatory third party verifications are required to be completed by September 1, following the year-end.

Three questions to determine key implications for your business

1. Does your company fall into one or more of the mandatory reporting requirements that are applicable now? Key pointers are if your company: 

  • has annual GHG emissions equal to or greater than 10,000 tonnes CO2-equivalent* 
  • imports electricity (>0 MW)
  • supplies more than 200 litres of petroleum products

2. Does your company have an obligation to have the reported information verified by an accredited third party verifier? Key pointers are if your company:

  • has annual GHG emissions equal to or greater than 25,000 tonnes CO2-equivalent* 
  • imports electricity (>0 MW)
  • supplies more than 200 litres of petroleum products

3. Has your company prepared a strategic approach to the carbon cap and trade? The carbon cap and trade system will effectively transform GHG emissions reporting in Ontario from a disclosure focus to regulated emission targets, creating:

  • the opportunity to generate a reduction in costs and create tradable assets through reducing emissions
  • the risk of increased costs and reduced business competitiveness for organizations that do not successfully reduce emissions
  • increased need for accurate and timely GHG reporting to support both regulatory reporting and business decision making

Challenges of preparing

Typical challenges include:

  • correct interpretation of the legislation and guidance documents
  • comprehensive understanding of the future risks and opportunities your business faces from carbon reduction regulation, changing market dynamics and stakeholder pressure
  • building sufficient capacity (knowledge, resources) to adequately respond 
  • designing and implementing appropriate processes and controls across the organization to capture, compile and analyze all relevant information

How we can help

We can help address these challenges by providing support in one or more of the following roles.

1. Strategy

  • help you to identify risks and opportunities created by carbon pricing and build a strategic response, e.g. scenario analysis with carbon pricing
  • identify value chain risks created by broader climate change effects, e.g. possible disruption to the supply of key commodities and raw materials

2. Compliance

  • help you to understand and comply with emission reporting and reduction and carbon reporting legislation in Ontario and beyond

3. Reporting

  • develop and support to assist you to implement effective reporting processes to gather, analyze and report carbon data across your organization
  • assess your approach for collecting and reporting GHG data, including implementation of relevant controls
  • advise you on industry best practice for carbon reporting and benchmarks, such as CDP

4. Finance

  • investigate opportunities to raise capital for investment in carbon reduction and low-carbon innovation, for example through green bonds or through clean technology incentives and subsidies
  • explore how your organization can benefit from increased investment flows into clean technology and low carbon solutions

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