2025 EY Global Climate Action Barometer shows Canadian companies lagging on climate action

Companies in Canada must move from setting net-zero targets to robust action plans

In Canada, the 2025 Barometer shows 44% of assessed companies have set net-zero targets compared to 64% globally. A further 92% of assessed companies here reported decarbonization levers to manage their Scope 1 and 2 emissions, compared to 96% globally. That’s a start. But advancing climate transition plans to strategically create a competitive edge will require much more detailed targets.

Effective climate transition plans help companies manage risk and adapt to change. Beyond immediate emission reductions, a robust transition plan should also address how a company’s activities or products enable a lower-carbon economy and how a company contributes to building up carbon sinks.

At a minimum, robust climate transition plans include greenhouse gas (GHG) reduction targets covering all parts of a company’s value chain:

• Operations (Scope 1)
• Electricity use (Scope 2)
• Upstream and downstream value chain emissions (Scope 3)

Stakeholders also expect climate transition plans to outline well-defined actions and timelines for reaching those goals. Across all sectors, in both Canada and globally, the most common decarbonization levers to achieve Scope 1 and 2 targets include improving energy efficiency, renewable energy procurement and grid decarbonization. For Scope 3, sustainable product design and packaging, supplier engagement, as well as transportation and logistics optimization, all rank among the top drivers. Companies in Canada will need to get specific about the actions they’ll take to capture a climate transition plan’s full potential.

And while Canadian securities law does not require organizations to have a climate transition plan, converging international standards, strengthened federal policies and shifting trade alliances — as well as domestic regulatory readiness — mean enhanced climate reporting is likely coming sooner rather than later. Developing more robust plans now gives organizations in Canada time to consider how they will describe climate risks and opportunities should formal regulation eventually require that level of explanation.

Taking climate transition planning from good to great in Canada

To begin closing critical gaps and strengthening climate transition plans with operational and financial detail, read How a climate transition plan can strengthen your business model. Then, move forward strategically while keeping these guiding principles in mind:

1. Take an iterative, phased approach to the analytical planning process and gather insight into what works best for your organization. 
2. Engage across the business to generate buy-in from all company decision-makers.
3. Work collaboratively with value chain partners to incorporate their thinking and foster cross-sector success.
4. Start with climate but weave in nature to develop holistic strategies that account for interdependencies between environmental factors. 
5. Reinforce transition planning at the top of the business agenda to support resilience and support long-term value creation.