National Defence fully agrees with the recommendation of the Commissioner.
We are committed through our Management Action Plan to take concrete steps in the short and medium-term.
By March 2023, we will formalize a risk management approach.
In fact, we are already moving ahead to update our Corporate Risk Profile and by March 2023 we expect to finalise the methodology and tools.
This will also help in our efforts to categorize our 10,000 Real Property (non-housing) assets so that we can establish clear opportunities, challenges and mitigations to target significant greenhouse gas reductions.
As of 2021/22, DND has reduced its (real property and light fleet) emissions 36% below its 2005 baseline. We are on track to meet or exceed the 40% target by 2025.
By March 2024, we expect to complete a roadmap to reduce Real Property greenhouse gas emissions by 90% from the 2005 baseline, and to attain a net-zero portfolio by 2050.
To do so, we will need to ensure that we are systematically identifying the impacts of planned capital projects, long term Real Property requirements, and commitments related to Strong, Secure, Engaged on our greenhouse gas reduction roadmap.
With the largest infrastructure portfolio in the federal government, we appreciate the Commissioner’s insights, as risk management can also help organisations identify previously unseen opportunities.
Ultimately, National Defence is committed to environmental sustainability, and we continue to evolve as an environmentally responsible organization.
Key Facts
Report 2 seeks to determine whether the Treasury Board Secretariat led the Greening Government Strategy in a manner that supported progress in reducing federal government greenhouse gas emissions.
It also focuses on Transport Canada and National Defence, who are the largest government emitters of greenhouse gas.
Both National Defence and Transport Canada fully agree with the OAG's recommendation on developing a risk management approach.
TBS fully agrees to four recommendations; partially agrees with one recommendation related to its approach on tracking costs and savings and reporting to Parliament, noting current practices in place to meet both objectives.
Details
In April 2022, the Commissioner of the Environment and Sustainable Development tabled his 2022 Spring Reports, which included audits on the following five topics:
Government's carbon pricing and hydrogen strategies;
The transition to a low-carbon economy and supports for affected workers;
Efforts to achieve net-zero emissions by 2050;
Investments in climate-ready infrastructure; and
The Greening Government Strategy.
On the latter, the Report concludes that at the five year mark, the federal government's efforts to green government operations have fallen short in several areas, including planning, reporting and risk management.
While the Report concludes that the results on emissions reductions that National Defence and Transport Canada reported were supported by the Departments' implementation of internal controls and that the Departments took appropriate measures to reduce greenhouse gas emissions in their areas of responsibility, the Departments did not have a risk management approach that defined significant risks and corresponding mitigation measures.
In particular, the Report states that National Defence's emission reduction plan needs further information about the activities required to meet the 2050 net-zero target.
The Report goes on to note that this "lack of information makes it difficult for decision-makers, Parliament, and Canadians to know whether the Government will meet its 2050 target and whether Canada is actually being the global leader in greening government that it has set out to be."
Overall, the Commissioner of the Environment and Sustainable Development report made six recommendations, one of which involves National Defence (limited risk management) in a joint recommendation with Transport Canada.
Indeed, on April 26, 2022, Mr. Jerry DeMarco, the federal environment and sustainable development commissioner, held a news conference on Parliament Hill following the tabling of his latest spring reports.
During the press conference, Mr. DeMarco reiterated his findings for Report 2 – Greening Government Strategy, noting that "More work is needed to ensure that the Greening Government Strategy delivers the desired results and that complete plans and methods are put in place to track and report on emission reductions."
Mr. DeMarco did note that of all five of today's reports, he was most pleased with Report 2 – Greening Government Strategy as "even though the results were not good in terms of some of the Government programs… the recommendations were all agreed to, except one," with TBS partially agreeing to "develop an approach to track costs and savings to provide decision makers, parliamentarians and Canadians with sufficient information about the estimated costs and savings to achieve the 2050 net-zero target."
Key Findings Implicating National Defence
Reducing and reporting on emissions: The Report found that National Defence and Transport Canada aligned their greenhouse gas emission reduction plans with the 2017 Greening Government Strategy, reduced their emissions, and reported their results annually.
However, National Defence’s analyses did not show how the Department’s short-term actions were contributing to the 2050 net-zero target.
The Report found that a 7% reduction in emission for fiscal years 2019–20 to 2020–21, from the 2005-06 baseline, was partly the result of a drop in operational activity during the COVID 19 pandemic. National Defence is cited in the Report as stating that it assumes that emissions may increase again when normal operations resume.
Of note, despite a slight increase in GHG emissions with operational activities returning to pre-pandemic levels, National Defence remains on track to meet or exceed the 40% target by 2025 through various carbon reduction initiatives including energy performance contracts, green/smart building technology and clean electricity contracts.
While no recommendations were made related to this finding, the Report stresses the importance of this finding, noting that "if federal Departments do not carry out their plans with enough strategy and urgency, the Government of Canada will not succeed in reducing its greenhouse gas emissions to net zero by 2050." As such, the Report recommends that Departments monitor and report on their emission reduction efforts to understand whether they are making enough progress. If not, the Report stresses that Departments will need to take appropriate steps and report on the circumstances.
Gender-based analysis plus: The Report found that when National Defence hired 27 energy managers and energy efficiency engineers to help reduce its emissions, it conducted gender-based analysis plus to ensure gender diversity among these new staff members.
Indeed, National Defence noted that it applies gender-based analysis plus when required by program funding requests or procedures, such as those related to building design, equipment purchase, and hiring practices.
The Department indicated that it did not receive direction from the Treasury Board Secretariat of Canada on gender-based analysis plus with respect to the Greening Government Strategy.
Limited risk management: The Report found that National Defence identified some of the significant risks that could prevent it from achieving its emission reduction targets. However, it did not have an approach to mitigate some of these risks. For example:
The Department estimated a reduction in its scope 1 and 2 emissions of 63% by 2050 with current funding (83% with additional funding). Therefore, there is a risk of not meeting the 2050 net-zero target.
The Department may need to purchase carbon removals starting in 2050 to achieve net zero, but it did not know what quantities will be required or what the cost will be.
The Department did not know what advanced technologies may become available to reduce emissions.
The Department was relying on multiple levels of government to build the infrastructure, such as power lines, required to access renewable energy.
The Report stresses the importance of this finding, noting that "a risk management approach would help departments to identify and address any significant risks that could affect their ability to achieve the 2050 net-zero target."
Recommendation
Limited Risk Management: National Defence and Transport Canada should:
Continually identify new activities that will significantly contribute to emission reductions and prioritize them based on risk.
Develop a risk management approach that defines significant risks and corresponding mitigation measures.
Response from National Defence
Agreed. National Defence accepts the recommendation and recognizes the need for increased prioritization and risk management. National Defence will formalize a risk management approach that is integrated with its Corporate Risk Profile. This will include identifying significant risks, options, and mitigations for senior management to consider, by March 2023.
National Defence will complete a roadmap to reduce real property greenhouse gas emissions by 90% of the 2005 baseline and attain a net-zero portfolio by 2050. The roadmap will identify opportunities (and challenges) to achieving net-zero along with associated costs and risks, by March 2024.
Updates on MAP Progress
National Defence is consolidating risks identified to reducing GHG emissions through Departmental Reporting documents, such as the Departmental Plan, Departmental Results Report and the Assistant Deputy Minister (Infrastructure and Environment) Risk Profile. Once consolidated, risks and mitigation measures will be used to update the National Defence Corporate Risk Profile. This work is expected to be completed in 2022-23, in collaboration with external resources.
National Defence anticipates completion of the milestone to develop GHG emissions reduction risk assessment methodology and tools by March 2023. The original target of October 31, 2022 could not be achieved due to procurement delays.
The final risk assessment which is on track to be completed by end of December 2023 will inform the Real Property GHG Emissions Reduction Roadmap to 2050.
