In boardrooms and across headlines, Canada’s sustainability conversation is shifting fast with carbon policy rollbacks, new disclosure standards, and a crackdown on greenwashing pushing ESG from buzzword to battleground. 

Carbon pricing is under pressure. In early 2025, Canada repealed its consumer carbon tax under Prime Minister Mark Carney, raising concerns from investors and energy transition advocates about the viability of major decarbonization investments like the Pathways Alliance’s $16B carbon capture project. While positioned as a cost-of-living measure, the rollback introduces uncertainty around long-term carbon policy, especially for firms planning multibillion-dollar emissions-reduction strategies. 

At the same time, regulatory frameworks are advancing. The Canadian Sustainability Disclosure Standards (CSDS), modeled after the IFRS’ global baseline, became voluntary in January 2025 and will be mandatory starting in 2026 for climate-related disclosures. By 2028, Canadian companies will be expected to report across all ESG dimensions with increasing precision and auditability. This marks a shift from voluntary ESG narrative to structured, standardized accountability. 

Meanwhile, the Competition Act was strengthened in 2024 to specifically address greenwashing. Companies making environmental claims must now provide clear, verifiable evidence. Failure to do so can result in penalties up to 3% of global revenue or $10 million whichever is greater. The impact is already visible: Royal Bank of Canada recently scaled back public ESG targets, citing increased regulatory scrutiny a move covered broadly in financial press. 

So while sustainability expectations are rising, clarity isn’t. 

Some executives see ESG as a necessary framework for transparency and risk management. Others view it as a politicized distraction from growth. Most, privately, are trying to do the right thing but struggling to define what “the right thing” actually means in today’s environment. 

Maybe it’s time to reframe the question not as compliance vs. resistance, but as clarity vs. confusion. Because the question isn’t whether ESG is right or wrong. The better question is: what does sustainability demand of us structurally, not symbolically? 

What if ESG isn’t the endgame? 

What if it’s not the badge, or the scorecard, or the finish line? 

What if ESG like any other sustainability framework is a mirror? 

One that reflects what already exists inside a company: 

• The clarity (or confusion) of its leadership 

• The coherence (or chaos) of its operating model 

• The strength (or fragility) of its culture, trust, and systems 

In that case, sustainability isn’t a function of how well you publish a report. It’s whether your business model can withstand pressure regulatory, economic, social, or otherwise. 

What we’re seeing 

In conversations with leaders across industries, there’s a recurring pattern: not uncertainty about whether to invest in sustainability, but confusion about how to do so with integrity, strategic clarity, and durability. 

Consider this: 

• A 2022 McKinsey report found that while 63% of executives say ESG is a top concern, only 13% say it materially shapes strategy. 

• A PwC Canada study shows that while most large companies reference the TCFD framework, fewer than half integrate it meaningfully into decision-making. 

• Greenwashing enforcement is already changing behavior. The Competition Bureau’s expanded authority is making companies think twice about vague ESG claims not because they don’t care, but because the risk of getting it wrong is now reputational and financial. 

Behind these headlines are organizations wrestling with real-world questions: 

• Are we structurally dependent on one or two leaders? 

• Are our values actually reflected in how we hire, budget, or report? 

• If regulations change again, will we still be ready? 

These aren’t compliance issues. They’re design issues and they reveal whether a company is built to hold, adapt, and grow under pressure, or only function when the conditions are ideal. 

What sustainability actually looks like 

Resilient companies: 

• Can explain why they exist and how they make decisions 

• Have systems that work even when key people are away 

• Treat culture as an asset, not a liability 

• Know the risks that matter and act before they’re forced to 

They may or may not call that ESG. 

But they’re sustainable. 

The opportunity in front of us 

Canada is at a decision point. We can get lost in ESG acronyms and political skirmishes or we can build. 

We can build companies that are structurally sound, not performatively green. 

We can build communities that benefit from economic transitions, not get left behind by them. 

And we can help each other as advisors, operators, and investors to sharpen our understanding of what it means to do this well. 

Because sustainability isn’t just about the future. 

It’s about what your company actually is  right now. 

And here’s the question worth asking: 

Let’s stop asking if we’re ESG-compliant and start asking if we’re actually built to last. 

What part of your organization wouldn’t survive a sustainability audit even without the acronym? 

About Jeff Peterson 

Jeff Peterson is the founder and CEO of Blue Monarch Management, a professional management firm that helps organizations grow, scale, and transform. He is a Doctor of Business Administration student, a trusted management consultant, and a board-level advisor with a strong interest in accelerating entrepreneurship and building community-led growth. Jeff brings grounded, real-world insights from complex transformation projects and a strong bias for clarity, speed, and execution.