Canada’s push to diversify its trade relationships has taken on new urgency.
Canadian businesses are being encouraged to look beyond the United States and pursue opportunities in established and emerging markets around the world. Canada already has preferential access to 1.5 billion consumers through 15 free trade agreements covering 51 countries.
That creates enormous opportunity.
But access to a market and being ready to compete in it are two different things.
Businesses entering new markets encounter different customer expectations, procurement requirements, supply-chain practices, financing considerations, regulations, and commercial norms.
Sustainability is increasingly woven into many of these areas. A business may encounter sustainability expectations not because a foreign regulation applies directly to it, but because the companies it wants to do business with are facing their own requirements and expectations.
Those pressures can extend through supply chains and business relationships, as customers seek information from suppliers, procurement processes incorporate sustainability criteria, lenders and investors assess sustainability-related risks, and business partners seek information they need to meet their own obligations.
For SMEs in particular, this distinction matters. A company doesn’t need to be a large multinational or subject to a major reporting requirement for sustainability to become relevant to a new opportunity.
And what businesses encounter will differ from one market to another.
In the European Union, Canadian companies can encounter sustainability expectations through customers and value chains, even when EU reporting requirements don’t apply directly to them.
ASEAN provides a different example. Its 11 member countries are distinct markets, but the region has developed sustainability guidance specifically for SMEs in supply chains.
Sustainability can also shape where new business opportunities are emerging. Japan’s transition toward a lower-carbon economy creates demand for technologies, expertise, products, and solutions that support decarbonization. In the United Kingdom, sustainability is increasingly connected with investment and financial decision-making, while Scotland incorporates sustainable growth into its proposition for attracting international investment.
For Canadian businesses, sustainability can become part of what the company is selling, how it differentiates itself, or why it is well positioned for an opportunity.
So how should businesses prepare?
Not by trying to anticipate every sustainability requirement in every country.
There are foundational capabilities that can travel with a business: understanding its environmental performance and emissions; knowing its workforce and supply-chain practices; having appropriate policies and governance; tracking relevant information; and being able to demonstrate what it is doing.
That foundation won’t answer every question a customer, investor, lender, or business partner might ask. But it gives the company somewhere to start and adapt when a new opportunity emerges.
This is why market readiness needs to be part of Canada’s trade diversification conversation.
Opening new markets is essential; so are the capabilities to compete when companies get there.
Understand where the gaps are, strengthen the capabilities that will travel across markets, then adapt to the specific country, customer, investor, partner, or opportunity.
Different markets. Different requirements. A common foundation.
