Climate, ESG and a Positive Outlook for 2021

Updated: Jan 11


The end is not nigh

It has become an international running joke to associate the year 2020 with unprecedented misfortune, the decline of societies, and signs of the apocalypse. And while no one has been unaffected by the Covid-19 pandemic, it is important to keep sight on encouraging advancements that have been made in key areas, particularly involving climate, the environment, and the role of ESG (Environment, Social and Governance) measures for business and investing. With mass roll-out of a Covid-19 vaccine on the horizon,[1] fruitful discussions around the green recovery[2] that could characterize our return social living, and a host of green financing and climate change initiatives to encourage better environmental business practices, there’s a lot to be optimistic about as we look toward the new year. Now is the time to start thinking about how best to prepare for the changes ahead and find our place in the changing landscape.

Green, clean and everything in between – Canada commitment to green innovation


While the world has been battling Covid-19, climate change has continued to threaten our environment and ecosystems. To combat its undeniable effects on our planet[3], countries around the world have adopted both domestic and international initiatives to address this pressing issue. For instance, Canada has obligated itself to several international environmental agreements[4], including the United Nations Framework Convention on Climate Change[5] and the Paris Agreement[6], as well as committed itself to ambitious global initiatives, including Mission Innovation.[7]


As a result of its obligations, commitments and strategy[8], Canada and its provincial governments have adopted policies to promote innovation in a variety of sectors, including CleanTech[9], GreenTech, IP[10] strategy and green construction.[11] Eco-friendly innovation takes all shapes and sizes, ranging from AI and machine learning systems to products that will help Canadians reduce their environmental impact. Hopefully, this will lead to job creation[12] and new employment opportunities.


ESG considerations – a carrot and a stick


At the same time, shifts in what it means to be a responsible corporation are changing the DNA of business and transforming their decision-making processes. Taking ESG into account has gone from luxury to necessity. Corporate responsibility initiatives used to be seen as an additional annoyance for business’s management teams, but increasingly, environmental responsibility in particular is being considered essential to the long-term reputation and success of business.[13] In fact, as consumers become more aware of the environmental implications of corporate practices, high ESG scores have become associated with stronger brands (e.g., trademarks),[14] which means more value for investors.


Convictions about the dire state of our environment are also driving investors to assess ESG criteria when making their investment decisions. As of March 31, 2020, the UN Principles for Responsible Investment, an “aspirational set of investment principles that offer a menu of possible actions for incorporating ESG issues into investment practice” counted 3,038 signatories, who manage a total of US$103.4trn![15] Slowly but surely, strong ESG practices are making companies more attractive to investors and could provide an advantage over their competitors.[16]


And if that isn’t enough, evaluating and preparing for the risks associated with climate change may even be considered a foundational aspect of directors’ duties. The Canada Climate Law Initiative (CCLI) recently explored the scope and limits of directors and officers’ fiduciary obligation in respect of climate change. According to their analysis, “directors have a clear responsibility to be informed about the risks that climate change poses for the business of the corporation they serve and to be satisfied that those risks are being appropriately managed.”[17] They also emphasize the importance of disclosure both to “meet the needs of the investment community and to satisfy legal requirements.”[18] Failure to do so could have serious legal ramifications.


Planning for the future with trademarks [FAQ]


The course being set by government policies and changing business practices is going to lead to a new boom in green innovation and a race to acquire green credentials before competitors through ESG reporting. Protecting GreenTech and CleanTech innovations and demonstrating commitment to ESG approaches will be essential for organizations and businesses as green and socially responsible investment accelerates.


One of the best ways to achieve these goals is through a sound IP strategy. New products and services are more often than not secured by a form of IP, including patents, trademarks (word, design, certification marks, etc.), industrial designs, copyright and/or trade secret, and knowing where to start can be daunting. Instead of relying a costly long-term patent strategy, it may be possible to adopt a trademark strategy that can safeguard the integrity of the brand and protect against the counterfeiting of its popular products.


Trademarks consist of “a combination of letters, words, sounds or designs that distinguishes one company’s goods or services from those of others in the marketplace”[19]. Certification marks can also be used for the purpose of identifying wares or services that are of a defined standard with respect to: (1) the character or quality of the wares or services; (2) the conditions under which the wares have been produced or the services performed; (3) the class of persons by whom the wares have been produced or the services performed; or (4) the area within which the wares have been produced or the services performed. By registering a trademark, you protect it under law from misuse by others, and you gain exclusive rights to use it throughout Canada for 10 years (renewable).


In certain instances, corporations’ trademarks and/or brands have been used to promote their commitments to the environment (e.g., environmental governance[20]). As noted by Adelman and Austin, “In the case of sustainably grown coffee, for example, numerous third-party certification organizations exist, but many companies—including market leaders such as Starbucks —use conventional trade- marks as ecolabels to convey information about their sustainable practices. Similar to certification marks, the use of private ecolabels is motivated by an amalgam of normative environmental commitments and marketing objectives that reflect consumer preferences.”


Doing it right

A word to the wise though – professional counsel in trademark matters is highly advised. Trademark applicants “going green” should be well-informed about the trademark application process, as there are be many pitfalls and obstacles, such as greenwashing, or the Trademark offices’ reluctance to register these type of trademarks. One of the most common hurdles to registration arises if the Examiner views the applied-for “green” trademark as “merely descriptive” or “generic,” meaning that the mark or a term within the mark is simply too common to be trademarked and only makes note of a particular characteristic or item. In other words, the applied-for “green” trademark would be perceived by a Canadian trademark Examiner as nothing more than an indicator that the good or service is environmentally friendly, not a unique identifier, and therefore unregistrable.


As we emerge from the difficulties of year 2020, we must rebuild in such a way that puts climate actions at the center while ensuring our businesses and the economies they support are more robust than ever. Innovation and a strong ESG performance are going to be what define the most successful and well-respected businesses of tomorrow. Durand Lawyers is here to support any business that wants to reinforce these elements for preparing for the future though a strong IP strategy.



About Durand Lawyers

Durand Lawyers brings Law & Business Together. In addition to being on the board of FORPIQ, we are a law and business advisory firm specialized in intellectual property, business strategy, as well as civil and corporate law. We are uniquely positioned to help clients in emerging technology industries such as environment, SaaS, AI, and FinTech, employing both lawyers and experienced entrepreneurs to get the best possible outcomes. For more information visit our website at www.durand-lex.com.


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[1] https://www.rcinet.ca/en/2020/12/07/canadas-largest-ever-immunization-plan-to-start-in-december/

[2] https://www.corporateknights.com/green-recovery/

[3] https://climate.nasa.gov/evidence/. Based on a framework that was conceived in Montreal, Canada, the Intergovernmental Panel on Climate Change (IPCC) will be releasing its 6th assessment report in 2022 on the impact of climate change, see: https://www.ipcc.ch/report/sixth-assessment-report-cycle/.

[4] https://www.canada.ca/en/environment-climate-change/corporate/international-affairs/partnerships-organizations/participation-international-environmental-agreements.html.

[5] https://unfccc.int.

[6] https://www.canada.ca/en/environment-climate-change/corporate/international-affairs/partnerships-organizations/united-nations-framework-climate-change.html.

[7] https://www.nrcan.gc.ca/climate-change/canadas-green-future/mission-innovation/18612.

[8] Canada’s environmental sustainability priorities (e.g., a low-carbon economy) (see: http://fsds-sfdd.ca/index.html#/en/goals/ and https://www.canada.ca/en/services/environment/conservation/sustainability.html), compliance to its obligations set forth in various free-trade agreements (e.g., Canada-United States-Mexico Agreement (CUSMA) - Environment chapter) (see: https://www.international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/agr-acc/cusma-aceum/enviro.aspx?lang=eng).

[9] https://www.canada.ca/en/services/science/innovation/clean-technology.html.

[10] https://www.ic.gc.ca/eic/site/108.nsf/eng/home.

[11] Grouping of incentives related to energy efficiency from provincial/territorial governments, major Canadian municipalities and major electric and gas utilities are provided on the following website: https://www.nrcan.gc.ca/energy-efficiency/energy-efficiency-homes/financial-incentive-province/4947.

[12] https://www.bbc.com/news/science-environment-55276769 (“Climate fight will create 'millions of jobs' - Boris Johnson”, published on December 12, 2020).

[13] https://corpgov.law.harvard.edu/2020/07/09/what-board-members-need-to-know-about-the-e-in-esg/

[14] https://www.triplepundit.com/story/2019/brand-strength-esg-investors/85911

[15] https://www.unpri.org/download?ac=11599 [16] https://corpgov.law.harvard.edu/2020/07/09/what-board-members-need-to-know-about-the-e-in-esg/ [17] https://law-ccli-2019.sites.olt.ubc.ca/files/2020/06/Hansell-Climate-Change-Opinion-1.pdf?file=2020/06/PUTTING-CLIMATE-CHANGE-RISK-ON-THE-BOARDROOM-TABLE.pdf [18] https://law-ccli-2019.sites.olt.ubc.ca/files/2020/06/Hansell-Climate-Change-Opinion-1.pdf?file=2020/06/PUTTING-CLIMATE-CHANGE-RISK-ON-THE-BOARDROOM-TABLE.pdf [19] http://www.ic.gc.ca/eic/site/cipointernet-internetopic.nsf/eng/wr03718.html?Open&wt_src=cipo-tm-main

[20] 93 Notre Dame L. Rev. 709 (2018), available at: https://scholarship.law.nd.edu/cgi/viewcontent.cgi?article=4765&context=ndlr.

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