The backlash against diversity and sustainable development programs in the United States is likely to make waves in Quebec. Many business leaders and entrepreneurs could adjust their strategies as a result.
Many U.S. companies have announced that they are reviewing their approach to diversity and sustainability in the wake of the election of Donald Trump, a recent U.S. Supreme Court ruling against affirmative action and interventions by conservative activist investors.
The Quebec business community is not isolated from this trend, notes Quebec Chambers of Commerce Federation (FCCQ) president and CEO Véronique Proulx in an interview: “Will it become widespread? We’ll have to see over time, but we’re certainly hearing it already (that companies are reviewing their approach).”
If American companies lower their sustainability or diversity criteria, their Quebec suppliers will inevitably adjust their strategy accordingly, she explains.
“If you come from the American side, it’s not a requirement, it’s not a demand, and the majority of your customers are in the United States, you may choose not to pursue that or not to invest in it. Not that it’s not important, but it’s one of many priorities.”
In Canada, the environmental aspect is more at risk than diversity, believes Michel Séguin, a professor at UQAM.
If the expectations of governments and customers are lowered when it comes to the environment, companies that do less will have a competitive advantage, since their costs will be lower, explains the specialist in corporate governance and ethics.
“The minute you have a free-rider movement, well that discourages those who respect the standards,” he stressed.
That’s why the government needs to regulate to encourage companies to fight climate change, says Séguin: “If we want to control global warming and avoid causing more damage, we have to get on with it and apply all the rules.”
Environment Minister Benoit Charette told a press scrum on Tuesday that the Plan for a Green Economy, which is due to be updated in the coming months, will take account of the political context south of the border.
“We don’t want to penalize the Quebec economy, so if ever there are major tariffs imposed on Quebec businesses and industries, we won’t add another layer of environmental constraints,” he said.
When the economic climate is gloomier, companies sometimes have less appetite for social responsibility, notes Celia Chui, assistant professor at HEC Montréal and a specialist in corporate ethics.
“When things are going well, when the economy is doing well, I think people are more in favour of sustainability and diversity,” she said. “They are seen as good things that can help a company create value. In more difficult times, companies are more concerned about their profitability.”
The same can be said for consumers who are concerned about the rising cost of living and the security of their jobs, she adds.
Businesses will not be able to turn their backs on this issue for long, she warns.
“The environment is not waiting for us to be ready,” she said. “We’re seeing it with forest fires and droughts all over the world (...) I don’t think it’s possible for businesses to ignore it. Otherwise, there will be no resources left to create value.”
For her part, Rosalie Vendette, a director at Quinn & Associates, a firm specialising in sustainable finance and responsible investment, does not believe that Canadian and Quebec companies will shy away from their environmental objectives.
“On the contrary, what we’re seeing on the environmental front is an increase in the action being taken by companies, given the disclosure obligations we’re seeing around the world,” said Vendette.
She points out that Europe continues to have stricter standards, and that Canadian companies must meet these requirements to remain competitive in the marketplace.
Diversity more valued in Canada
Séguin believes that companies' diversity efforts would be immune to the backlash south of the border: “It’s something that’s positive for the organisation, even if others aren’t doing it.”
Diversity and inclusion policies enable companies to hire the best talent, he adds: “If they can go out and find the best resource, regardless of colour, gender, sexual orientation, religion or whatever, it can enable the organisation to perform better and more effectively.”
Vendette agrees: “There really is a huge amount of academic research showing all the benefits of diversity.”
The legislative context is also different in Canada, stresses the expert in sustainable finance.
The U.S. Supreme Court’s ruling against positive discrimination in universities in June 2023 has prompted American companies to review their practices in order to avoid potential lawsuits, she points out.
Companies are being advised by their lawyers to act cautiously because they could in fact be the target of legal action by different groups.
There are different cultural sensitivities about diversity in Canada, Vendette believes. She also stresses the importance of reconciliation with First Nations.
“It’s going to become more and more a condition for doing business in certain areas, with certain communities. So that’s important for Canadian companies, and not to be overlooked.”
This report by The Canadian Press was first published in French on Jan. 22, 2025.
