Edmonton takes ESG approach to budgeting
Edmonton expects be the first Canadian municipality to launch a carbon budget that is integrated with its financial budget in fall 2022.
In addition to measuring dollars and cents, the new budget will also calculate the Green House Gas (GHG) emissions that a project adds or removes from the environment. This initiative is part of the City’s broader 10-year Community Energy Transition Strategy to address the climate crisis and achieve carbon neutrality by 2050.
The adoption of ‘carbon budgeting’ practices in government is not new. In Norway, Oslo City Council adopted its first carbon budget in 2016, under the motto “We’ll count carbon dioxide the same way we count money.”
With a carbon budget, a municipality has a certain amount of carbon it can “spend” if it wants to reduce the impacts of climate change. Unlike a financial budget, where opportunities to bring in additional revenue may exist, a carbon budget is static. It is a fixed amount allocated across a municipalities’ operations annually. It also accounts for materials, maintenance, and usage.
Municipalities can reduce emissions and more actively practice environmental, social, and corporate governance (ESG) by applying the same amount of rigour when measuring and reporting on their financial budgets.
The carbon budget proved to be an effective governance tool for Oslo. For example, it determined that the city’s planned measures were insufficient to attain the GHG reduction goals it had set for 2020 and 2030. This prompted the identification and implementation of supplementary activities to achieve its planned emissions reductions targets.
The City of Edmonton’s carbon budget may be the first of its kind in Canada, but it is not the only local government that is pursuing a more sustainable and low-carbon future. Municipalities across Canada and around the globe will be watching intently to see this framework in action and add it to their ESG toolkit.
For more information, please contact Hylann [at] abmunis.ca (Hylann Ma), Growth and Innovation Manager.