ESG Is Accountability, Not a Buzzword

By Paula McGarrigle, President & CEO, Solas Energy

What we tell ourselves matters, but it must be challenged. Leaders often gravitate toward familiar voices, but doing so can make it harder to spot new risks or opportunities. ESG has become a loaded term in some circles, dismissed as jargon or written off as a passing fad. Yet at its core, ESG is really about accountability; accountability for water, air, land, communities, employees; and a responsibility that stretches far beyond our own lifetime to future generations.

“ESG isn’t a spin. It’s accountability”

From Technical Compliance to Real Responsibility

As a chemical engineer who has worked in the chemical sector as well as oil and gas, I’ve seen first-hand how companies aim to meet regulations but not always openly. “Back in the day,” plants sometimes started up on cloudy, moonless nights when problems could be hidden from sight. These practices didn’t make the emissions disappear; they only made them less visible.

“If your plan requires darkness to look compliant, it isn’t responsible.”

I’ve also seen rules unintentionally encourage the wrong behaviour. For example, some regulations treated one large emissions event as preferable to several smaller ones. On paper, it looked like compliance, but smaller and controlled releases were often better for the environment. It reminded me of the old saying: “the solution to pollution is dilution.” Regulations that don’t reflect environmental reality can sometimes create perverse incentives.

“When compliance becomes the ceiling, the environment becomes the floor”

That’s why ESG matters. Done properly, ESG is about surfacing realities, raising the bar, surfacing realities, not hiding them. It is about building trust the communities and showing that industry is willing to be transparent.

With Great Power Comes Great Responsibility

On Friday, someone reminded me of the Spider-Man mantra: “With great power comes great responsibility.” That’s ESG in a nutshell.

There are fancy words for it, circular economy, sustainability, diversity and inclusion, but at the heart of it, ESG is about responsibility and transparency. It’s about setting a direction to reduce impacts and being accountable to the people who are affected, whether they are shareholders, employees, indigenous people, or communities living near industrial sites. ESG, stripped of buzzwords, is just the Spider-Man principle applied to corporate and industrial life.

Think of the letters themselves:

• E – Environmental. Understand, measure, monitor, reduce. Track what we put into the air, water, and land—and commit to reducing those impacts.
• S – Social. Recognize the value of people: indigenous people, communities, employees, partners, and the trust they place in us
• G – Governance. Get out of the echo chamber. Oversight, transparency, and the willingness to report both wins and failures.

“Good governance is the art of refusing your own echo”

Will Companies Do This Voluntarily?

Some will, some won’t. There’s a spectrum: some firms will lead and invest because they see strategic upside, while others will view it as burdensome and move only when required or incentivized. There are many voluntary disclosure framework and standards which sound similar, but they are like different tools in the toolbox, each for a specific requirement.

After all, investors, including you and me through pensions, and mutual funds, care about where their money is going and what impacts their investments have.

Some financial institutions have adopted a voluntary risk management framework, called the Equator Principles to help determine, assess, and manage environmental and social risks in project-related financing. 

• International Finance Corporation: Part of the World Bank Group; publishes performance standards that underpin the Equator Principles.
• World Bank Environmental, Health, and Safety Guidelines – Technical reference documents used within the Equator Principal for project-level environmental and social due diligence.
• Equator Principles: Used in project finance. If you’re building a wind farm or pipeline and want the lender’s approval, your project will need to be tested on environmental and social risk management. (This is something Solas Energy supports directly.)
• ISSB (formerly SASB). Investor-focused, concise, industry-specific reporting metrics—great for annual reports and investor decks.
• Global Reporting Initiative (GRI): This is widely used sustainability reporting standards that cover environmental, social, and governance impacts across all sectors, with a broad stakeholder focus.

The Canadian and Provincial regulations set minimum requirements for environmental and disclosure. That’s why regulations exist, it puts the minimum level in place, and why investors increasingly demand transparency.

The Canadian Regulatory Landscape

In Canada, the “E” pillar of ESG is underpinned by a stack of federal and provincial regulations. A few of the most important include:

• Canadian Environmental Protection Act (CEPA). The federal backbone of environmental regulation. Recently modernised, it recognises the right to a healthy environment and requires consideration of vulnerable populations and cumulative impacts.
• Impact Assessment Act (IAA). Applies to projects with federal triggers—such as those crossing provincial or international boundaries or affecting federal lands.
• Fisheries Act. One of Canada’s oldest and strictest pieces of environmental law. It prohibits harmful substances from entering fish-bearing waters.
• Multi-Sector Air Pollutants Regulations (MSAPR). Sets limits on emissions such as NOₓ and SO₂ across multiple industries.
• Environmental Emergency (E2) Regulations. Require facilities storing hazardous substances above thresholds to file, maintain, and test emergency response plans.
• National Pollutant Release Inventory (NPRI). An annual reporting system where facilities must disclose their pollutant releases if they meet thresholds.
• Federal Greenhouse Gas Reporting Program. Facilities emitting more than 10,000 tonnes of CO₂ equivalent per year must report annually.

On top of these federal rules, provinces and territories add their own requirements. For example, Alberta has the Technology Innovation and Emissions Reduction (TIER) Regulation, a system of carbon pricing and performance standards for large emitters. Other provinces have their own systems, but where they don’t meet federal stringency, Canada’s backstop carbon pricing system applies.

In short: Canada has a dense patchwork of regulations. Companies must not only comply but also understand how these obligations interact across federal and provincial levels.

The Disclosure Layer

Regulation alone doesn’t cover everything. ESG also relies on disclosure and transparency. In Canada, these important frameworks shape the disclosure landscape:

1. Canadian Sustainability Disclosure Standards (CSDS). Voluntary as of January 2025, these align with the International Sustainability Standards Board standards and focus on sustainability and climate disclosure.
2. OSFI Guideline B-15. This regulatory guideline issued by the Office of the Superintendent of Financial Institutions sets mandatory expectations for federally regulated banks, insurers, and pension funds. It sets out mandatory expectations for climate risk management and disclosure. This requires banks, insurers, and pensions in Canada to take climate risk seriously as a regulated risk management and disclosure obligation.

The common thread is transparency. Regulations define when and how much you must disclose, but the expectation of investors and stakeholders is moving beyond bare compliance.

From Compliance to Decarbonisation

Where we typically work with clients is in bridging this gap: understanding impacts, setting up monitoring and reporting systems, engaging stakeholders, and developing compliance strategies. But the work doesn’t stop at reporting. Increasingly, it’s about decarbonisation and energy transition.

• Energy efficiency and conservation are the cornerstone of reducing impacts. The cheapest tonne of carbon is the one you never emit.
• Renewable energy offers a direct way to decarbonise processes and products.
• Offsets provide another tool, though they should complement, and not replace, direct reductions.

We’ve supported the development of many gigawatts of renewable energy, and we’re experts in offsets.

Canada has also created strong incentives to support this journey. The Investment Tax Credit (ITC) is designed to encourage investment in renewable energy, energy storage, and low-carbon hydrogen. Many companies are already using these tools, and we’ve supported clients by modelling economics, supporting the structuring of investments, and navigating funding from institutions like the Canada Infrastructure Bank.

Why It Matters

At the end of the day, ESG is not about ticking boxes or chasing buzzwords. It’s about living up to the responsibility that comes with power. When companies embrace ESG, they show communities that they are willing to be transparent, to reduce their impacts, and to build trust.

With great power comes great responsibility. ESG is about embracing that responsibility. It’s about more than compliance; it’s about accountability, transparency, and commitment to future generations.

ESG isn’t about buzzwords. It’s about responsibility and transparency—showing your stakeholders that you are serious about reducing impacts and building trust. Companies that embrace ESG accountability gain stronger community relationships, improved investor confidence, and a competitive edge in the energy transition.

Wherever you are on your ESG journey, Solas Energy can help you take the next step. Let’s turn complexity into clarity and accountability into opportunity.

And that is not a buzzword.