Supporting Women Leaders Will Help Achieve Canada’s Net-Zero Goals
With the right investments, the transition to net zero will result in the creation of a clean, resilient economy
The Canadian Net-Zero Emissions Accountability Act, which became law in 2021, enshrines in legislation Canada’s commitment to set national targets to reduce greenhouse gas emissions with the goal of attaining net-zero emissions—either by emitting no greenhouse gasses or offsetting its emissions—by 2050.
Getting there will be no easy feat; it will require economic and social transformation. But, with the right investments, the transition to net zero will result in the creation of a clean, resilient economy and the development of sustainable, future-proof “green” jobs across sectors, including in small and medium-sized enterprises (SMEs), leading to a demand for new skills in the labour market.
As Wendy Cukier, founder and academic director of the Diversity Institute and Women Entrepreneurship Knowledge Hub (WEKH), and research lead for the Future Skills Centre said, “Women-led enterprises play an essential role in innovations driving sustainability and decarbonization across Canada. Relying on energy and the tech sector’s big businesses for new green and cleantech solutions is important but does not take into account that SMEs provide almost 90% of private-sector employment opportunities and produce 200 million tonnes of greenhouse gasses annually, which is higher than the entire emissions of the country’s oil and gas sector.”
Working with many partners, including Coralus (formerly SheEO), the Smart Prosperity Institute and BMO, and supported by WEKH and the Future Skills Centre, the Diversity Institute has expanded its research to explore strategies, processes and skills development of Canadian businesses to advance sustainability and the path to net zero.
As Diversity Institute research shows, women entrepreneurs play a critical role in sustainability. Research from WEKH published in The State of Women’s Entrepreneurship in Canada 2023 shows that women entrepreneurs are more likely than men to start businesses that focus on environmental and social sustainability efforts, in alignment with Canada’s progress toward the United Nations’ 2030 Agenda and Sustainable Development Goals.
Indeed, women are already playing a key role in the transition toward a clean economy, thanks to women-led enterprises commonly embedding sustainability principles into their business goals and practices. A 2021 report from the Diversity Institute, WEKH and BMO explored how women business owners are driving social sustainability outcomes by changing organizational culture and human resources practices, improving women’s representation in business leadership and the workforce, and removing barriers for other women. The report found that 80% of women business owners were contributing to social sustainability through their company’s practices, 65% were contributing to economic sustainability, and about 50% were contributing to environmental sustainability goals.
Yet, women are under-represented in green jobs, where workers earn 20% more on average compared with non-green jobs. Empowering women to enter green industries offers several benefits. It increases women’s participation in traditionally men-dominated fields, helps close the gender pay gap and gives back to the community by preserving the environment for future generations.
While creating sustainable companies is important to reaching net zero, improving sustainability performance throughout businesses is as important and can go far in reducing greenhouse gas emissions. Moreover, a study with the Diversity Institute and Smart Prosperity Institute, which was supported by the Future Skills Centre and funded through the Government of Canada, showed that job creation is a co-benefit of a net-zero transition.
Even so, women-led businesses in Canada still face significant barriers, including in transitioning to a more sustainable business model. They need more support. A 2022 survey by the BMO Climate Institute shows that among SME executives not taking action, 15% do not know where to begin, and 28% cite cost as a deterrent. Diversity Institute research also shows many SME leaders lack the resources and know-how such as training, mentorship and tools to “greenify” their operations.
Other research supported by the Future Skills Centre and Diversity Institute and led by Coralus provided 40 case studies of diverse women entrepreneurs who are promoting Canada’s sustainability goals. This soon-to-be-published work, which also included a survey and literature review, found women entrepreneurs struggle with granting eligibility criteria and financial investment. This finding accords with data that shows a lack of investment in women-led businesses, particularly when it comes to venture capital investment. The Coralus study suggests that there is an added layer of difficulty for women-led businesses in securing bank loans, because securing funding becomes even more difficult through traditional channels when pitching an innovative product that may have little precedent on the market. Interviews with women innovators confirmed the importance of mentors and networks for development and growth; however, many of the key sustainability driving sectors, such as tech, lack a formidable women mentor presence, including at an organization’s highest levels.
The lack of representative mentors underscores the importance of initiatives like the Government of Canada’s 50 – 30 Challenge, in which the Diversity Institute is an ecosystem partner. The Challenge is a voluntary code that encourages organizations to achieve 50% gender parity (women and/or nonbinary people) and 30% representation of other equity-deserving groups on boards and/or senior leadership teams. Another resource is the WEKH-led See It. Be It, a campaign built on a database of close to 2,000 women who are challenging stereotypes of entrepreneurship.
While it will take work to right this imbalance, there are strategies women-led businesses and other SMEs can take to advance sustainability. Examples include transitioning to local suppliers, prioritizing renewable energy, developing sustainable products, converting to greener infrastructure and using more energy-efficient production methods.
Fortunately, numerous examples exist of how successful and inspirational women-owned and -led companies from across Canada are developing green initiatives. These include using sustainable seafood production methods, creating educational programs for youth about environmental sustainability, designing clothing from upcycled materials and building trucking fleets with hydrogen-powered vehicles.
Two of these inspiring women are Jessive Verhagen, CEO of Hydra Energy, and Prageet Nibber, founder and CEO of Rewatt Power.
Jessica Verhagen, CEO, Hydra Energy
Identifying a need to reduce global greenhouse gas emissions, Hydra Energy recognized the potential of commercial trucks to become cleaner in 2012. As CEO of this cleantech business, Verhagen is leading Hydra Energy’s efforts to develop and offer vehicles powered by hydrogen, which emits zero emissions. This represents the only transition to cleaner trucking on the market and significantly contributes to a greener trucking industry. One of Hydra’s trucks can save 67 tonnes of CO2 from being released into the atmosphere every year.
Verhagen stresses the need for a better understanding of systems and existing infrastructure to develop realistic, location-specific solutions to improve sustainability. “One-size-fits-all approaches are rarely effective, especially in smaller municipalities or rural and remote communities,” Verhagen said. She also noted that adoption won’t happen overnight. “More education is needed [to convey] that the path to net-zero emissions is gradual; it isn’t a sudden change event.” This misinformed perception reduces technology adoption, she said, adding that Hydra sometimes encounters people who say, “Why would somebody reduce their emissions 40%? Why can’t they just do 100[%]?”
Verhagen has also identified that “There is a gap in commercialization, including opportunities for piloting and raising capital for implementation in Canada. While Canada excels in research and development and innovation support, it often struggles when it comes to deploying homegrown innovations.”
Prageet Nibber, founder and CEO, Rewatt Power
Nibber also found there was a lot of noise to navigate around the best approach to scale up a sustainable business. In 2019, she founded Rewatt Power, which creates processes and tools to help organizations transition to a clean economy. Her climate accounting software solution aims to help companies quantify and measure their carbon emissions and monetize carbon credits.
“It can be difficult to navigate accelerator and other support services which are available within the entrepreneurship ecosystem,” she said. “It’s hard to choose which ones are best for your company.”
In addition to helping partners reach their own sustainability goals, Rewatt focuses on its environmental impact, prioritizing low-emissions infrastructure and minimizing activities that produce greenhouse gasses.
“Women in leadership roles have the potential to meet Canada’s net-zero goals while also creating new jobs and developing higher skilled workforce,” Cukier said. “We can’t afford to overlook women and diverse SMEs. These ‘greenpreneurs’ are already making an impact. We need to ensure they have access to the supports they need.”