Your pot is not as green as you think

The cannabis giant Canopy Growth used a lot of energy in 2020 to grow its pot. The company emitted more than £ 65 million worth of coal, according to newly released data.

The data was released last week as part of the Canopy Growth Environmental, Social and Governance (ESG) report, the first time the company has released emissions data.

Canopy Growth’s environmental reports follow a similar release from other pottery companies last year. Vancouver-based Rubicon Organics released its first ESG report in June, and Toronto-based Khiron Life Sciences Corp. published its first ESG report in August.

“As we work to create sustainable, long-term profitability, we are aware of the link between business models that create common value for a wider range of stakeholders that are more likely to succeed over time than those that seek only to make a profit. ”Said Hilary Black, a Canopy attorney, explains why the company publishes ESG information.

ESGTree CEO Majid Mirza said National Observer for Canada that investors, be they large asset managers or individuals, are increasingly allocating capital based on the company’s ESG rating. The better the rating, the easier it is to attract investors.

Mirza said that European experience with the introduction of the Sustainable Financial Disclosure Regulation shows that companies that have previously disclosed often perform well. The regulation aims to try to channel money into sustainable projects by integrating climate change issues into the financial system.

“The rating of companies with a good rating for ESG disclosure will naturally rise because investors expect some reward system to be in place due to the new regulation,” he said.

In North America, “now that regulation is imminent on disclosure, what will happen is for companies to take a proactive stance,” he said.

This means that companies will need disclosures in order for financial agencies to receive a favorable rating. In this way, when climate disclosures are needed, companies are well placed to forge capital from investors who want to invest their dollars.

In May, Canada launched the Sustainable Finance Action Council to steer the country’s financial sector towards a greener economy by “integrating sustainable finance into standard industry practice”. Climate-related financial disclosure is the Council’s number one priority.

Growing industrial-scale tiles requires a lot of energy, and #cannabis companies are starting to tell you how much they want to attract investors. #cdnpoli

The council includes representatives from five major banks – BMO, RBC, TD, Scotiabank and CIBC – as well as groups such as the Canada Pension Plan, the Ontario Teachers’ Pension Plan, the Caisse de dépôt et placement du Quebec, insurance companies and others. .

Research in the United States has shown that there is a strong link between the emissions of an indoor cannabis production site and the energy sources available on the power grid. This is because a lot of energy is needed to maintain the right temperature and humidity to maintain optimal growing conditions. Carbon dioxide is also often used to promote photosynthesis in the plant, which helps to harvest higher yields.

Studying more than 1,000 sites in the United States, researchers at Colorado State University estimated that the median emissions from growing one kilogram of cannabis are about 3,600 kilograms of CO2-equivalent emissions. The amount varies between roughly 2,300 and 5,200 kilograms per kilogram grown, depending on the location. Perspectively, a kilogram of tomatoes grown in a British Columbia greenhouse heated by natural gas emits roughly two kilograms of emissions.

Extrapolation of the results to Canada suggests that in provinces such as BC and Quebec, where electricity grids are dominated by water, cannabis emissions would be lower than in provinces such as Alberta and Saskatchewan, where huge amounts of coal and they burn natural gas. electricity.

Canopy’s emissions figures, which are calculated to be just 59,000 tonnes of carbon dioxide equivalent, represent only Scope’s emissions from Scope 1 and 2, referring directly to emissions from its operations, such as generators and company vehicles. , and emissions related to the use of electricity. . Scope 3 emissions, such as truck products placed on the market, are not included.

Canopy’s natural gas, biomass, fuel oil and fugitive emissions totaled about 36,500 tonnes of greenhouse gases. Meanwhile, the energy it uses was reported to be just over 22,000 tonnes of greenhouse gases.

The company is cutting costs to make it profitable by downsizing its production sites. When sites closed in 2020 are subtracted from the equation, total emissions will fall to about 46,500 tonnes of greenhouse gases, suggesting what the emissions reports will look like in the coming years.

Today, Canopy grows its cannabis primarily in Ontario, headquartered in Smiths Falls. It also has a research plant in Scarborough and several production sites in North America and Europe, including Saskatchewan, California, Colorado, Illinois and Germany. Canadian operations accounted for 86 percent of the company’s emissions, while 12 percent of EU sites and the remaining two percent came from the United States.

The company reports on some energy-saving projects, such as a biomass boiler at its Mirabel (Que) site, and uses efficient air heating and cooling technologies at its indoor production sites.

“In total, in 2021, our energy conservation projects resulted in 2974 MWh of electricity and 7957 MWh of natural gas savings per year,” Black said.

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