Fighting greenwashing: A conversation with Catherine McKenna

Photo illustration by Monica Guan

Net-zero commitments are a critical first step in the fight against climate change. But to stave off the worst effects of a warming planet, we actually have to ensure governments and business leaders live up to those promises. In this episode, we chat with Catherine McKenna, head of the UN Task Force against greenwashing, about regulations and accountability when it comes to net-zero targets, as well as how  incentives might help. We need to quickly scale climate solutions; which means tackling bureaucratic hurdles. Nothing is off limits.

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Subscribe to Solve for X: Innovations to Save the Planet here. And below find a transcript to the third episode “Fighting greenwashing: A conversation with Catherine McKenna”

Catherine McKenna: If someone is going to say they are net zero by 2050, how do you know if it’s real? And how can people actually see that it’s real, in a transparent way?

Manjula Selvarajah: When it comes to climate action, there’s been a lot of talk and a lot of pledges made.

Manjula Selvarajah: And it’s not just countries or cities, companies have followed suit.

Manjula Selvarajah: But as anyone who has ever made a New Year’s resolution knows — it’s one thing to set a goal; it’s quite a different matter to achieve it. And committing to a low-carbon future to have an actual impact on the climate, that’s one big resolution. The good news: it’s achievable. The less good news: experts at the watchdog group Carbon Market Watch uncovered that the bulk of what’s promised by corporations will only come into effect 20 to 30 years from now, leaving it up to future generations to deal with. The question is: how can we ensure that the emissions goals of today are accountable to a real net-zero future?

I’m Manjula Selvarajah and this is Solve for X — Innovations to Save the Planet, a series where we explore the latest ideas in tech and science that could help us tackle climate change. Normally on this podcast, we explore developments in tech that can help communities, cities and society build a better climate and future.

Today is a bit different. We’re focusing on what stands in the way of change. In a recent address, the UN Secretary-General António Guterres talked about the problem of greenwashing and called out bad actors directly.

António Guterres: Current climate pledges would mean a 14-percent increase in emissions and most major emitters are not taking the steps needed to fulfill even these inadequate promises.

Manjula Selvarajah: In response to the lack of progress, the Secretary-General launched an expert group to draw up standards; to keep companies, cities, and banks accountable to their net-zero pledges. And the person he named to lead that task force is a familiar one in policy circles: Catherine McKenna, Canada’s Former Minister of Environment and Climate Change.

Catherine McKenna: In 2015 when we negotiated the Paris Agreement, people weren’t talking about being net zero by 2050.  But of course, it’s easy to announce targets — I saw this in government. It’s much harder to actually have an action plan to implement them, and in particular to have a significant action right away.

Manjula Selvarajah: Congratulations on this new-ish job — it’s a big one. Tell me about the thinking behind the new Task Force. What will you be doing?

Catherine McKenna: The idea — and this is the Secretary-General, it’s a top priority for him — is to make sure when companies, banks, investors, cities and regions make these commitments, that the commitments are real. So that you have a real plan, that they will involve immediate action, that it won’t just be buying credits; so that you actually do the hard work yourself and that you’re reporting in a transparent way so that shareholders, environmentalists, regular people, can see what’s going on and hold folks accountable.

Manjula Selvarajah: You’ve mentioned the words “real plan.” How will you ensure that these plans (that companies are putting forward or cities are putting forward) are real? And then how will you hold them accountable?

Catherine McKenna: We’re going to be looking at what is kind of the “gold standard” when you make a net-zero commitment. And then also as part of this, we’re looking at: how do we regulate to ensure that all companies have net-zero targets and also that there’s disclosure? There are a lot of different standards out there and I think the challenge is it’s very confusing for folks. And that goes all the way to — you’re going to the grocery store and you see — this is “net-zero bacon” or “green bacon” and you’re wondering… is that actually really true? Folks are like, is any of this real? Because at the same time, we’re seeing that temperatures are rising, that greenhouse gas emissions are going up. We’ve seen in the last few months, temperatures that are literally fatal to people in India and Pakistan. And so, it really is important that these are credible because otherwise, cynicism will mean that people won’t believe what anyone says.

Manjula Selvarajah: Now, I’m sure you’re familiar with this. In May, The Guardian reported on the oil and gas industry’s future plans… The Guardian also revealed that the biggest oil companies are on track to spend — this is a shocking number —$103 million a day, all the way to 2030, on climate-busting schemes. Talk to me about what this means, for the work that you’re going to do with the task force.

Catherine McKenna: Well, maybe it demonstrates how important it is, right? You can’t be saying we’re committed to being net zero and at the same time we’ve been told by the international energy agency (this is a very legitimate body) that there can’t be new fossil fuel expansion and at the same time, all you hear about is really big fossil fuel expansion.

I think it just demonstrates the scale of the challenge. I think this is exactly what the Secretary-General is worried about. He wants folks to actually have to disclose what they are doing, and how that is consistent with commitments they have made. And where it isn’t consistent, how they’re going to fix it.

Manjula Selvarajah: Now some of the things that you’ve mentioned in terms of their accountability, are things like standards and regulations (you’ll be recommending regulations). Can you give me a sense of what those recommended regulations could look like? Give us an example.

Catherine McKenna: I have to be careful because I’m one person amongst the high-level expert group. But for example, the U.K. is looking at mandating every large company over a certain size would have to have a net-zero plan and a pathway to get there and report on it.

So that’s the kind of thing that could be an example. It just gets back to this point — if someone is going to say they are net zero by 2050, how do you know if it’s real? And how can people actually see that it’s real, in a transparent way?

Manjula Selvarajah: Can you give me an example of how greenwashing has affected legitimate climate solutions from being able to implement and scale?

Catherine McKenna: The challenge with greenwashing is, it just creates cynicism — cynicism actually rewards bad guys. If you’re a company that doesn’t want to act and you just join on this net-zero pledge — and you get to coast along and in fact, build new fossil fuel infrastructure (which we know is a huge challenge to meeting any net-zero commitments), you’re getting a free ride. The flip side is then, everyone sees that, people aren’t stupid, and they say — well, there’s a total disconnect here. And if you’re a good company and you’re part of that, and everyone’s going to say you’re greenwashing (and you’re maybe at a competitive disadvantage, you’re trying to do the work) then you may say, well, why am I bothering?

And it just has a really insidious impact. I’m all about — let’s do better, let’s pull everyone up. And that’s what you do when you have clear standards, clear requirements — you can see who’s doing the work and who isn’t. And hopefully the ones that aren’t doing the work or have been struggling, they realize by potentially being called out, that they need to do a lot better.

Manjula Selvarajah: Now I know a couple of the things that people usually tie into things like this are incentives, but also penalties. What could either incentives or penalties look like?

Catherine McKenna: There’s been discussions linking what your net-zero commitments are (and your pathway and how you’re actually doing and reporting) to executive compensation. That is an interesting idea. And once again, you can’t prejudge anything, but then you do something that you can be sure that everyone’s paying attention throughout the whole company, because it’ll hit your personal bottom line. I think there’s different ways to look at this and I think the incentive hopefully becomes more and more obvious to folks that young people or consumers are looking to do things to reduce emissions. They want to be using their purchasing power. I think that’s a real incentive to have a real impact.

If you want to hire good people, especially young people, they are going to go to places where they can see in a real, tangible way that this is a company that is actually committed to doing right by the planet. To be fair, to business, I mean business says: regulate. If I’m someone who really cares about doing right by climate, I don’t want to be out there doing the really hard work, because it’s transformative work within a company. If you’re decarbonizing your business, that’s hard. And if you are doing that while your competitor isn’t, that’s not good for you. I hear from lots of folks: tell us what we need to do, how we need to report and make sure everyone has to do this. We have a lot of businesses that don’t have net-zero targets.

Manjula Selvarajah: That is an interesting thing — don’t make us draw the line around ourselves — do it for the industry through regulations and we can all comply. Now we’ve been talking about companies, I want to move to talking about cities for a bit. In comparison to the work that you’re doing with companies and investors, how do you plan to hold cities accountable to their net-zero commitments?

Catherine McKenna: I think the focus in that space is quite different from businesses and investors. And cities are different — you can’t take New Delhi and then compare it to Zurich. These are very different places with different opportunities. I think it’s really helping folks understand: how do you become net zero? And what are the things you can be doing?

A great example — I was just reading about Zurich, Switzerland. The city of Zurich decided they’re going to move off natural gas. They’re bringing district heating within Zurich. They’re taking waste energy (from waste) to use it to heat the city and replace natural gas — that’s amazing. And these are the opportunities that folks may not even know about.

Enwave — I’m just thinking of another one that was taking cold water out of Lake Ontario and using it to cool buildings in downtown Toronto. There’s so many innovative opportunities, but we need folks to really think differently. And this is where, making sure for cities in towns, that climate is an across-the-board theme. That you have a climate lens on everything you’re doing, that you are thinking every time you invest a dollar — you’re saying to yourself, is this going to reduce emissions? Is this going to adapt more to the impacts of climate change? But sometimes it can be very challenging for cities because they need significant investments.

Manjula Selvarajah: Many municipalities are cash strapped. I just wonder: what are some of the mechanisms that are available to help them transition? We really have to think about how they’re going to finance the kind of change that we need to see. What are your thoughts on that?

Catherine McKenna: I’ll give you a really interesting example that I saw when I was working in government. Electric buses — we all know we need to get off diesel-spewing buses, which is actually bad for air pollution but it’s also terrible for climate change, and we have solutions. In fact, we have Canadian made electric buses — how great is that? But upfront costs are a lot.

We looked at: how do you finance this? That kind of sounds technical — how do you make it so it’s more affordable for municipalities to make the decision to buy electric buses rather than diesel buses? You have to take into account that upfront costs are a thing. So, we got the Canada Infrastructure Bank involved and what it could do was help finance the buses — because over the long run these municipalities were going to save money — so that it could make an investment knowing that it was going to be paid back over a longer term.

In the case of Canada, the federal government was a huge partner to cities to invest in electric buses, to invest in retrofits of buildings, to invest in renewable energy because they just did not have the money that was required. I think we need to recognize that cities do need the support, often of the state, and that it can be very challenging if you are in a very, very big city where you’re also dealing with poverty.

I lived in Jakarta, Indonesia; there are many challenges in Jakarta, Indonesia. Sea level rise — adaptation is a huge issue; we often focus on reducing emissions. Huge issue of flooding in Jakarta, they’re actually talking about moving the capital.

I think we need to be sharing best practices with cities. I think we need to look at cities that are similar in size, similar in terms of economic development, in terms of challenges and opportunities and really help support them. I think it’s a bit different from businesses (well, quite different) from businesses and investors.

OK, so when Catherine brings up what’s happening in Jakarta, what she’s getting at is this idea of adaptation. In other words, how we cope with the impacts of climate change. It’s something we’ll increasingly have to confront as we saw in the summer of 2021 with the massive heat waves that devastated B.C.

Catherine McKenna: We are going to have to think very hard about how we adapt our cities to the impacts of climate change. We’re going to need to think about extreme temperatures, forest fires, all the broader impacts of extreme weather. When that happened — when there was that huge heat wave in B.C. — hundreds of people died in Vancouver because a lot of people don’t have access to air conditioning. You can’t ensure everyone has air conditioning, but you can make sure (as soon as the temperature looks like it’s going to go to a certain range) you have air-conditioned spaces for folks to go. That you have more trees planted. That you have buildings built in a way that you will get air flowing. These are all things that everyone’s going to have to think a lot more about, and unfortunately for cities, they really are on the front lines and don’t always have the capacity to do that. I think this is where sharing best practices, looking at — what are the opportunities we can work together, what are the things that can be done using new technology or low hanging fruit (like planting trees) — are all really important.

Manjula Selvarajah: It seems that cities have to juggle many options, try new technologies, put aside certain infrastructure projects and invest in others. These are really big decisions that have to be made and I wonder Catherine, what role carbon accounting could play in making these kinds of decisions?

Catherine McKenna: I think that’s really important. How do you take action if you can’t measure what you’re concerned about? What are we concerned about in the climate world? Number one: we’re concerned about pollution, carbon pollution (although there is other pollution I should point out — methane and other things that also contribute to climate change). You really need to count it so you can understand: where are your emissions coming from and how are you going to reduce them? And once you do that, you’ll make different decisions, even procurement decisions.

Imagine if you use lower carbon concrete — there’s a company called CarbonCure and they do low-carbon concrete — so concrete is a huge source of emissions. That’s something that can make a real difference. I think if you were doing carbon accounting, you would think about things like that, and I think you need to support it. I even saw this when I was minister of infrastructure: how do you actually do the accounting? How do you figure out how much emissions you would be reducing something by or increasing by; those aren’t easy things. I think we need to recognize that we need to have better tools to support cities.

You don’t always have someone who’s an expert in figuring out carbon accounting. We have to be slightly careful that we don’t just create new things and then people can’t do them; that’s not a way to get success. And then people are like: why do we bother? This is just another bureaucratic measure.

Catherine McKenna: Well, I mean, inertia is just… it’s easier to do what you’ve always done. And that is just a challenge on climate because what we’ve always done has not always been good for the planet. It’s leading us on a disastrous course, and we have an opportunity to do better. Maybe I’ll answer it in a different way ­— in government, you often come out with policies. You would sit around and you’re like — oh, we’re very smart and we know all the angles on this, and we know what would be the most efficient in terms of reducing emissions — and you announce the policy. And then you wait, and you wait, and you wait… and you’re like, wait a minute, this isn’t having the impact.

So take electric vehicles — electric vehicles are challenging for a whole variety of reasons that go far beyond just price. Of course, price is a problem, so you’ve got to solve that. (So, you put a price and you maybe create an incentive.) But then, folks are also worried about range.

So they’re like — can I drive to my mother’s house in Hamilton? How long is that? How’s that going to look? (I’m in Ottawa driving to my parents’ place in Hamilton.) So, how am I going to do that? Where am I going to charge? So that’s another issue. The cost (the upfront cost), people don’t recognize (maybe) that it’s actually cheaper; not just because you don’t use gas, but you don’t have to go and get repairs done as often. There’s a whole range of reasons why people do things, so when you think about inertia, it’s really looking at human behaviour. There’s a reason someone isn’t doing something.

I just think we have to be smarter about how we develop policies and how we get outcomes, because at the end of the day we should just be focused on outcomes. I’ve always said, I don’t care why people do the right thing; I just want people to do the right thing and there’s going to be a lot of different motivations.

Manjula Selvarajah: Let’s shift gears a bit. We talked about motivation around climate progress, but what about technology? What will it take to scale new climate solutions?

Catherine McKenna: The technology when you first bring it out — take electric batteries — they were really, really expensive and they were really, really big. Well, the cost of batteries has gone down precipitously because they’ve been scaled. I also think there’s a role for the federal government to be the first buyer in cases, to try it first and test the technology, but also to reduce the cost because the federal government can scale and it’s not doing enough. I’ll give you an example; hopefully some of my former colleagues are listening.

I went into a Budget Rental Car and said, “I’d really like to rent an electric vehicle.” And they said, “Oh, we don’t have any electric vehicles.” And I said, “Why not?” And I thought maybe it’s because people didn’t want to rent them. And they said, “Oh no, no, no, people want to rent them, it’s just we donrt really have enough scale.” And the guy said, “You’re in government, why don’t you just say that the federal government, all employees have to rent an electric vehicle.” He said, “So, totally transform the market immediately.” And then I said, “Oh, that’s a really smart idea.” And if the answer from the federal government is well, I don’t know, it’s going to cost a bit more — then I think we’ve lost the plot.

Because on the flip side, we’re like: we need to scale electric vehicles. You know what, you have to make these investments. And by the way, it’s part of your carbon accounting (or it should be) how much your employees are releasing in emissions by driving. So, it’s a positive thing. But I realize that the challenge with climate is it’s an everything thing. Everything you do, every policy, every decision you make, is all related to climate. But you need to be very thoughtful about that, which maybe gets back to carbon accounting or having a climate lens on everything that folks do.

Manjula Selvarajah: Fair enough. I’m going to ask you about something very local to both of us. In some jurisdictions we feel like we’re in the danger of moving backward in Ontario. For instance, the provincial government is planning to build natural gas plans to power the grid. How can we prevent backsliding on climate progress?

Catherine McKenna: Okay, this is going to sound political — but I was a politician. Elections matter. Elections matter. And this is what you see when you get a new government in, when the Ford government was first elected — the first thing they did was get rid of a cap-and-trade system, a price on pollution (with California by the way!) that businesses had gotten used to.

Not just was it bad in terms of increasing pollution, it also caused havoc for companies that were just looking for some stability about the direction. Look, you can always have a new government that can change things. And I think that polarization is an issue and you’re not going to convince everyone. Say, when we had to phase out coal, people in coal communities were worried because that’s basically phasing out their jobs.

That meant that the community that was built around coal. Basically every business was around coal — even the corner store — it was only there because it was a community where there was a coal mine. You have to think about that. I don’t know that there’s an easy answer to this, but I think when you design policies, you can be thoughtful and design them in a way that actually responds to where people are at.

Having said that I’m unflinching in — the science is the science, the evidence is the evidence, and the work that we need to do is pretty clear — and we’re a long way from that. We need to do a bunch of things. We need to regulate. We need to create incentives for people to act in a particular way. We need to hold folks accountable in particular companies and investors. And we need to do the work. We all need to do the work, but I’m a realistic optimist and I think if we are extremely disciplined, we can do it, but we have to be a lot more ambitious and everything you do has to be looked at from a climate lens.

Manjula Selvarajah: Thank you, Catherine.

Solve for X is brought to you by MaRS. The episode was produced by Ellen Payne Smith. Gab Harpelle is our mix engineer, Lara Torvi and Heather O’Brien are the associate producers. Mack Swain composed our theme song and all the music in this episode. Kathryn Hayward is the executive producer. This episode features clips from reporting on net-zero pledges from CBC, Reuters, Al Jazeera and Sky News Australia. I’m your host Manjula Selvarajah. Watch your feed for new episodes coming soon.

The Mission from MaRS initiative was created to help scale carbon reducing innovations by working to remove the barriers to adopting new technology. Mission from MaRS thanks its founding partners, HSBC, Trottier Family Foundation, RBC Tech for Nature and Thistledown Foundation. It has also received generous support from Peter Gilligan Foundation, BDC, EDC and Mitsubishi Corporation Americas.

Learn more about the program at missionfrommars.ca.