ESG (Environment, Social and Governance)
HISTORY OF ESG
Environment, Social and Governance or ESG term was first coined in 2004 by the United Nations Global
Compact. However, the concept has been around for much longer. The history of ESG evolved from early
corporate social responsibility (CSR) efforts and socially responsible investing (SRI) in the 1960s and 1970s.
During this time the public movements for civil rights and environmental protection urged companies to
consider their overall societal impact. Investors began screening out companies involved in controversial
industries. By the 1990s, people started realizing that social and environmental factors could directly impact
financial performance. Later in 2006, the UN launched the Principles for Responsible Investment (PRI),
urging the institutional investors to adopt ESG frameworks. Despite its rapid growth, ESG has faced criticism,
including accusations of greenwashing and inconsistent rating standards. However, with increasing
regulatory scrutiny and demand for transparency, ESG continues to evolve.
Loblaw Companies Limited
CURRENT TRENDS
Here are some key trends shaping ESG in 2025:
1. ESG in Financial Decision-Making
Companies are now looking beyond just profits; they are also considering their impact on the
environment, society, and how they are managed. Investors and regulators want businesses to include ESG
factors in their financial reports, giving a full picture of their sustainability efforts.
2. Changing the Way ESG Affects Executive Pay
Many big companies are rethinking how they link executive salaries to ESG goals. Some, like UBS and
HSBC, are reducing ESG-related bonuses because investors feel that some of these goals are too easy to
achieve and don’t make a real difference. The focus is now on making ESG targets more meaningful and
impactful rather than just symbolic.
3. Stricter ESG Rules from Governments
Governments worldwide are making ESG reporting mandatory, meaning companies must clearly
disclose their sustainability efforts in a standardized way. The EU now requires detailed ESG reports, and the
U.S. is enforcing stricter climate risk disclosures. Many Asian countries are also introducing rules to track
corporate sustainability, focusing on carbon emissions and governance transparency.
Loblaw Companies Limited
CURRENT TRENDS
4. More Investment in Ethical and Sustainable Businesses
Sustainable investing is growing rapidly, and ESG-related assets are expected to exceed $40 trillion by 2030.
Investors prefer companies that focus on reducing their carbon footprint, treating workers fairly, and maintaining
transparent business practices. Green Bonds and ESG-friendly ETFs are becoming popular investment choices.
5. Political Disagreements Over ESG
Not everyone supports ESG policies. In the U.S., some states have introduced laws limiting the use of ESG
criteria in investments. Over 150 anti-ESG bills have been proposed, creating uncertainty for ESG-focused
businesses. However, despite these political challenges, companies and investors continue to push for
sustainability because consumers and shareholders demand it.
6. ESG and the Supply Chain Challenge
Businesses, especially in fashion and retail, are struggling to maintain sustainable supply chains due to
increasing tariffs and trade restrictions. Sourcing eco-friendly materials has become more expensive. To deal with
this, companies are moving towards local suppliers and circular economy models, which reduce waste and lower
costs in the long run.
7. Investors Demanding More ESG Accountability
Shareholders are putting pressure on companies to take their ESG commitments seriously. Investors are
demanding better climate policies, fair labor practices, and responsible executive pay structures. In 2025, major
companies like Starbucks, Apple, and Tesla faced strong shareholder activism pushing for ESG improvements.
Loblaw Companies Limited
ABOUT THE COMPANY
Loblaw is Canada’s food and pharmacy leader, and the nation’s largest retailer. Loblaw provides
Canadians with grocery, pharmacy, health and beauty, apparel, general merchandise, financial services
and wireless mobile products and services. With more than 2,500 locations, Loblaw, its franchisees and
associate owners employ approximately 220,000 full- and part-time colleagues and employees.
Loblaw’s purpose – helping Canadians Live Life Well® – is focused on the needs and well-being of
Canadians who have billions of interactions with our business every year. Loblaw is positioned to meet
those needs in many ways, from our convenient locations with more than 1,100 grocery stores that span
the value spectrum from hard discount to specialty, to our full-pharmacies at more than 1,300 Shoppers
Drug Mart® and Pharmaprix® locations which carry Canada’s top consumer brands: President’s
Choice®, Farmer’s Market™, no name® and Life Brand®, to the hundreds of stores offering services like
PC Financial®, and our affordable fashion apparel brand, Joe Fresh
Loblaw Companies Limited
COMPANY APPLICATION
ESG PLAN
Fighting Climate Change
Advancing Social Equity
 Net-Zero Goals: Loblaw aims to achieve net-zero
 Inclusive Leadership: Loblaw has achieved 39.5%
emissions for its operations by 2040 and for its entire
representation of women and 28% of visible minorities in
value chain by 2050.
executive roles, showing a commitment to diversity
 Plastic Waste Reduction: They plan to make all control
 Children's Food Program: President's Choice Children's
brand and in-store plastic packaging recyclable or
Charity aims to raise $150 million by 2027 to support
reusable by 2025.
school food programs, feeding 1 million children annually
 Food Waste Elimination: Loblaw is committed to
by 2025
sending zero food waste to landfills by 2030 and aims to
 Women's Health Investment: Shoppers Foundation for
reduce measurable food waste in stores by the end of
Women’s Health plans to invest $50 million by 2026 to
2023.
improve equitable and accessible healthcare for women
in Canada.
Loblaw Companies Limited
COMPANY APPLICATION
Carbon Net-Zero
• Reduce their enterprise operating footprint2 (Scope 1 and 2) by 50% by 2030 from a 2020 baseline
• Operate a zero emissions short-haul outbound corporately owned and operated truck fleet by 2030
• Achieve net-zero for their enterprise operating footprint2 (Scope 1 and 2) by 2040
• Achieve net-zero for scope 3 emissions by 2050
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COMPANY APPLICATION
Tackling Plastic Waste
• Ensure control brand and in-store plastic packaging is recyclable or reusable in accordance with the inscope Golden Design Rules by 2025
Eliminating Food Waste
• Send zero food to landfill by 2030
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COMPANY APPLICATION
Inclusive Leadership
• Aim to be Canada’s Most Diverse and Inclusive Employer
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COMPANY APPLICATION
Supporting the Health and Well-Being of Children and Women
• Loblaw commits to $150 million in corporate and fundraising support to President’s Choice Children’s
Charity to help address childhood hunger and improve food skills by 2027
• Shoppers Foundation for Women’s Health aims to support initiatives that improve women’s access to
care through providing $50 million by 2026
Loblaw Companies Limited
COMPANY APPLICATION
Governance
Loblaw Companies Limited
RECOMMENDATIONS
1. Environmental Sustainability – Strategic Integration
Critique: Loblaw has implemented numerous environmental initiatives, including a notable 11% reduction in
carbon emissions relative to its 2020 baseline and an investment of nearly $44 million in 490 carbon reduction
projects. Additionally, the company has made significant progress in making its control brand plastic packaging
recyclable or reusable, achieving almost two-thirds compliance toward its 2025 goal. While these efforts are
substantial, they may benefit from a more integrated approach that aligns environmental objectives with the company's
broader business strategy.
Recommendation: To enhance environmental sustainability, Loblaw could embed environmental goals more
deeply into its overall business strategy. This could involve setting science-based targets for carbon reduction,
investing in renewable energy across operations, and incorporating environmental key performance indicators (KPIs)
into executive performance evaluations. Such integration would ensure that environmental considerations are a
fundamental part of decision-making processes, fostering a culture of sustainability throughout the organization.
Loblaw Companies Limited
RECOMMENDATIONS
2. Social Responsibility – Stakeholder Engagement
Critique: Loblaw's social initiatives, such as raising and donating a record $180 million to support research,
charities, and non-profits across Canada, and feeding over 990,000 children through the President’s Choice Children’s
Charity, reflect a strong commitment to community engagement. However, these initiatives could be further enhanced
by adopting a more proactive and inclusive approach to stakeholder engagement.
Recommendation: Loblaw should consider establishing a robust stakeholder engagement framework that involves
regular consultations with community members, employees, and other key stakeholders. This approach would ensure
that social initiatives are not only responsive but also anticipatory of community needs. By co-developing programs
with stakeholders and measuring their social return on investment (ROI), Loblaw can create more impactful and
sustainable social programs that resonate deeply with the communities it serves.​
Loblaw Companies Limited
RECOMMENDATIONS
3. Governance – Transparency and Accountability
Critique: Loblaw has made strides in governance, including increasing the representation of women in executive
roles to 46% and in management roles to 39%, with a goal to reach 40% by the end of 2024. The representation of
visible minorities in management roles now stands at 32%, and in executive positions at 28%, surpassing the
company’s 2024 targets. While these achievements are noteworthy, there is an opportunity to further enhance
transparency and accountability within the organization's governance structures.
Recommendation: To strengthen governance practices, Loblaw could establish an ESG-specific committee at the
board level to oversee and guide sustainability initiatives. Publishing detailed, data-driven ESG performance reports
that include both successes and areas for improvement would enhance transparency. Additionally, implementing
mechanisms such as whistleblower protection and adopting integrated reporting standards would further demonstrate
Loblaw's commitment to ethical conduct and accountability.
Loblaw Companies Limited
REFERENCE
• Harvard Law School Forum on Corporate Governance. (2020, March 2). Top 10 ESG trends for the new
decade. Harvard Law School Forum on Corporate Governance.
https://corpgov.law.harvard.edu/2020/03/02/top-10-esg-trends-for-the-new-decade/
• IBM. (2024, February 8). Environmental, social, and governance history. IBM.
https://www.ibm.com/think/topics/environmental-social-and-governance-history
• Loblaw Companies Limited. (2025, February 20). ESG strategy and focus areas: Fighting climate change and
advancing social equity. Loblaw Companies Limited. https://dis-
prod.assetful.loblaw.ca/content/dam/loblaw-companies-limited/creative-assets/loblaw-ca/responsibility/LCL-2024%20ESG%20February%20Disclosure_EN%20AODA.pdf
Loblaw Companies Limited
REFERENCE
• The Corporate Governance Institute. (n.d.). 10 ESG trends to watch. The Corporate Governance Institute.
https://www.thecorporategovernanceinstitute.com/insights/guides/10-esg-trends-towatch/?srsltid=AfmBOor1ZqVpBNag8vnzbJ0sjfrs0V_mcrvlv_gIN1n1pxnzPJ7TiguR
• Wang, Luna. (2023). Environmental, Social, and Corporate Governance: A History of ESG Standardization
from 1970s to the Present. Undergraduate Senior Thesis. Columbia University.
https://sites.asit.columbia.edu/historydept/wp-content/uploads/sites/29/2023/05/WangLuna_thesis.pdfBottom
Loblaw Companies Limited
THANK YOU
THANK YOU
Loblaw Companies Limited