Planning for disruption: Why transition plans matter for Canadian competitiveness
In today’s volatile global economy, businesses face a growing list of uncertainties — from shifting trade dynamics and geopolitical instability to the transformative impact of artificial intelligence. Among these disruptions, climate risk stands out not only for its scale, but also for its predictability. Unlike many other business challenges, climate change is unfolding in a clear direction — and companies can plan for it.
Our new report, Pathways to Competitiveness: How Transition Plans Can Help Canadian Businesses Compete and Grow, makes the case that climate transition planning is not just a sustainability issue — it is a business imperative.
Why transition planning?
Transition plans are strategic tools that help businesses prepare for climate-related risks and opportunities. They provide a clear pathway for aligning a company’s strategy and financial planning with the realities of climate disruption and the global shift toward a low-carbon economy.
Yet despite growing global momentum, most Canadian businesses have not developed or published credible transition plans. This lack of preparedness leaves them more exposed to rising costs, policy changes and market shifts.
The report argues that transition planning offers a practical and necessary approach to ensure Canadian businesses do not fall behind as the world moves forward.
What the report finds
The report draws three key conclusions:
- Transition plans offer real, tangible business benefits.
Canadian companies face a mix of external and internal barriers to improving climate readiness — from policy volatility and short-term profit pressures to lack of internal capacity or governance structures. Transition planning can help overcome these challenges by:
- Enhancing internal co-ordination and strategic alignment
- Improving understanding of climate risks, opportunities and dependencies
- Prioritizing strategic investments
- Supporting cost-effective engagement with investors and stakeholders
- Strengthening trust and reputation
- Facilitating access to markets and capital
Taken together, these benefits help businesses build climate readiness and position themselves to attract investment and remain competitive.
- Canada risks falling behind global peers.
While transition planning is still emerging globally, other jurisdictions — including the European Union, United Kingdom, China and Australia — are advancing faster. Many are setting policy and disclosure standards that will shape international capital markets and value chains. Canadian companies that fail to keep up risk losing ground on competitiveness, investment and market access. - The lack of consistent guidance is slowing progress.
Global standards such as those from the Glasgow Financial Alliance for Net Zero and the United Kingdom’s Transition Plan Taskforce are beginning to align. But within Canada, financial institutions use different frameworks and metrics to assess corporate climate readiness. Larger institutions often seek more detailed plans, while smaller ones may lack capacity to evaluate them. This lack of consistency creates confusion for companies and slows credible planning.
What’s needed is a harmonized, practical definition of what a credible transition plan looks like in the Canadian context.
The role of Business Future Pathways
Business Future Pathways was created to fill this gap.
The initiative is working to develop practical, investor-endorsed guidance to help Canadian businesses create credible transition plans tailored to their size, sector and market exposure. Rather than layering on new frameworks, Business Future Pathways will distill what matters most from existing global best practices.
Our work is being developed in close collaboration with the financial sector and corporate Canada to ensure that the guidance is practical, relevant and designed for implementation — not just compliance.
Disruption is overwhelming. Planning for it doesn’t have to be.
Climate disruption is already reshaping global markets. Canadian businesses that plan for this reality will be better positioned to adapt, compete and grow. Business Future Pathways aims to support that journey by equipping companies and capital providers with the guidance they need to act with confidence.