Factsheet: Governance components for deep decarbonization

Is your municipality in the process of developing a climate action plan for deep decarbonization? As an elected official or senior staff member, you may be involved with overseeing and championing your municipal climate action team as they plan and implement decarbonization efforts. As a senior leader, you play a key role in ensuring your municipality has a supportive governance structure to reach its deep emissions reduction targets.

Read this webpage to learn:

• The differences between corporate-level governance and community-wide governance
• The importance of good governance for deep decarbonization
• Key structural governance components for deep decarbonization and priority actions to implement them
• Examples from local governments that are implementing good governance

What is the difference between corporate-level governance and community-wide governance for deep decarbonization?

Corporate-level governance addresses greenhouse gas (GHG) emissions that are within a municipality’s control and can be conducted through municipal efforts alone. Within the municipality, the corporate-level governance structure affects communications, internal collaboration, and decision-making for GHG emissions reduction.

Community-wide governance addresses all GHG emissions within the municipal boundary and cannot be accomplished through municipal efforts alone. Deep decarbonization requires significant community investment and collaboration.

Both corporate-level and community-wide governance structures are critical for decarbonization planning and implementation. And while the same staff might support both, corporate-level governance and community-wide governance should be considered separately to enable independent monitoring, implementation and appropriate stakeholder involvement.

What are the key components of a good governance structure for deep decarbonization?

Corporate-level and community-wide governance structures have similar components. These are:

• Coordination and oversight
• Communication
• Monitoring and reporting
• An integrated approach
• Budgeting and financing

As outlined below, some of these components can be implemented in similar ways into both corporate-level and community-wide governance structures, while others will require different approaches.

Coordination and oversight

Who coordinates the climate action plan for deep decarbonization?

1. Corporate climate action plan: development and implementation is typically done by a climate change staff person or team. In smaller municipalities, it is common for climate change staff to be situated in the chief administrative officer’s office. This means that decisions made by climate change staff will have a direct influence on the entire organization and increases the likelihood that the overall municipal strategy or plan will be aligned with climate action plan.

Larger municipalities tend to have their climate team situated in various departments across the municipality. Each department takes ownership of and plays a key role in implementing the climate action plan. This makes it easier to pursue cross-departmental mandates and collaboration and enables knowledge sharing between policy and service departments. In this setup, the climate change team plays a supportive role in steering and overseeing progress toward deep decarbonization.

2. Community-wide climate action plan: Generally, a municipal-led secretariat or a third-party multi-stakeholder partnership/organization coordinates community-wide GHG emissions planning and reduction efforts. This includes enabling partner engagement and supporting the plan renewal process.

• Municipal-led secretariats should include key representatives from municipal government and external partner organizations.
• Third-party multi-stakeholder partnerships or organizations should include key representatives from utilities; Indigenous organizations; environmental non-governmental organizations; equity-seeking groups; chambers of commerce; and large employers from industry, commerce, institutions and other organizations relevant to the specific municipality. Typically, multi-stakeholder partnerships or organizations receive core funding or staff support from the municipality and reports to the municipal council.

Who oversees implementation of the plan?

Ideally, a diverse committee of internal actors from different departments would oversee the implementation of the corporate climate action plan. Depending on the municipality, these actors may include staff or managers from corporate services, finance, transportation, planning, or other relevant departments. FCM’s Municipal Climate Change Staff Guide can be used as a resource to identify potential internal actors and the type of support they may be able to offer to the internal oversight committee. This committee would likely also oversee the renewal process when it is time to update the corporate climate action plan. Oversight of the implementation of the community-wide climate action plan should be led by a multi-stakeholder entity (e.g., multi-stakeholder committee or board). However, ultimate oversight for all corporate plans rest with the municipal council.

Priority actions to implement effective coordination and oversight for deep decarbonization

Corporate-level governance

Community-wide governance

Situate the climate staff position(s) into the appropriate department(s) to influence change within the municipality and offer the necessary coordination. Identify an interdepartmental governing committee and internal technical group. Identify the responsibilities and mandate of the oversight committee (e.g., maintaining continuous momentum on decarbonization; aligning priorities, resources and funding to advance decarbonization efforts). Institute formal reporting to council.

Establish an entity (e.g., a municipal-led secretariat, a third-party organization) to coordinate community-wide GHG emissions planning and reduction efforts. Conduct a stakeholder assessment to ensure diverse representation on key committees. Identify a core leadership team of cross-sectoral representatives from key municipal and partner organizations to oversee the implementation of the community-wide plan. Identify the responsibilities of the oversight entity (e.g., maintain continuous momentum by partner organizations, align community-wide actions with targets, attract funding and investment to advance decarbonization efforts).

Examples of effective coordination and oversight for deep decarbonization

Corporate-level governance

• In the Town of Bauline, NL (population 475), climate change staff are part of the town manager’s office, enabling them to work directly with the chief administrative officer/town manager to implement the plan to decarbonize the electricity supply to 100 percent renewable energy. 
• The City of Vancouver, BC (population 631,486) has partially decentralized its decarbonization efforts by embedding responsibilities into various departments. The sustainability department steers the direction of the Greenest City Action Plan while each departmental team is responsible for implementing relevant climate action and strategies.

Community-wide governance

• ClimateActionWR is an organization funded by the Regional Municipality of Waterloo along with the cities of Waterloo, Kitchener and Cambridge (regional population 583,500) to implement climate change mitigation initiatives in the region. ClimateActionWR leads the creation and implementation of the community-wide climate action plan. The four municipal governments and two lead organizations (REEP Green Solutions and Sustainable Waterloo Region) form the management committee.

• In partnership with Sheridan College and the Region of Peel, the City of Brampton, ON (population 656,900) is setting up a Centre for Community Energy Transformation. This non-profit organization, at arm’s length from the city, will work with community residents, institutions, and local businesses to achieve Brampton’s GHG emissions reduction targets.

Communications

Communication is a key component of planning and implementing decarbonization action at the corporate level. Establishing formal and regular communication channels between various departments can build trust and transparency.

At the community-wide level, establishing formal communication channels enables information and knowledge exchange between all stakeholders and partners.

Ideas to improve communication include creating a website to encourage partner or public engagement, recognizing significant achievements, providing progress updates through e-newsletters and/or social media, offering training sessions, and arranging public or sector-specific information campaigns.

Priority actions to implement effective communication for deep decarbonization

Corporate-level governance

Community-wide governance

Establish a regular communication channel for information and knowledge exchange between departments. Establish a public consultation and information-sharing process and structure. Conduct staff training and profile success stories.

Establish regular communication channels to disseminate information and enable knowledge exchange among all stakeholders. Identify communication strategies to attract new partners who will commit to supporting decarbonization in their organizations. Offer training opportunities for capacity building (e.g., lunch and learn). Recognize significant undertakings or achievements (e.g., through awards or galas).

Example of effective communication for deep decarbonization

• The City of Montreal, QC (population 1,704,694) hosts mandatory online training on the carbon-neutral transition for its municipal staff and plans to create an expertise hub to promote knowledge-sharing for the municipality and local stakeholders. The city has also launched initiatives to recognize the efforts of municipal staff and highlight successes.

Monitoring and reporting

Monitoring and reporting can be implemented in similar ways in both corporate-level and community-wide governance structures. For example, a supportive governance structure for deep decarbonization would always include regular reports to council and a formal monitoring and reporting system to track progress, ensure accountability and enable adjustments as needed to meet 2050 climate targets.

Who monitors the corporate and community-wide climate action plans?

To varying degrees, monitoring of the corporate or community-wide climate action plan is done by the respective coordination team and oversight body. In larger municipalities that have multiple departments working on decarbonization, monitoring generally occurs in the individual departments and is reported to the oversight committee for consolidation.

How is progress on corporate-level and community-wide targets reported?

The municipality and its partners determine the frequency of reporting and adopt standardized performance indicators to report on progress toward corporate-level and community-wide targets. Progress on specific decarbonization initiatives, both within the local government and in partner organizations, is also reported.

Reporting on progress is often public and done at regular intervals. The focus of reporting is usually on GHG inventories and progress toward 2050 and interim climate targets, but it may also talk about decarbonization actions that have been taken; environmental, social or economic co-benefits that have been achieved; and indicator data such as citizen groups consulted. Integrating reports on climate mitigation into broader sustainability performance measurement can further show the interconnections between climate actions and other municipal goals.

Priority actions to implement effective monitoring and reporting for deep decarbonization

Corporate-level governance	Community-wide governance
Establish a formal internal reporting structure to track progress among various municipal departments. Use input and feedback from stakeholders to the improve monitoring and decision-making processes.	Adopt a standardized assessment framework and reporting structure to track emissions over time. Create a monitoring and reporting process to track community-wide actions and outcomes related to partner commitments.

Example of effective monitoring and reporting for deep decarbonization

• The City of Guelph, ON (population 131,794) is working to comply with ISO 50001 and use the ISO standard to optimize energy management system practices and ensure credibility and compliance. Community-scale GHG inventories will be updated annually. Our Energy Guelph reports quarterly to the city council on community-wide progress; three of the updates report on qualitative progress while the fourth provides updates on quantitative metrics. Progress toward the 2050 climate targets is reported and updated annually.

An integrated approach

To achieve deep emissions reductions at the corporate and community-wide levels, decarbonization efforts should be integrated into all municipal planning, services and operations. This can be referred to as embedding a “climate lens” throughout the organization.

At the community-wide level, municipalities and other stakeholders can work collaboratively to align organizational initiatives with community-wide climate targets. Community stakeholders and potential partners can also identify areas where they can take action in their organizations. Sector-specific multi-stakeholder working groups and/or joint projects are a common approach to identify sector-specific emissions reduction opportunities.

In addition to incorporating a climate lens, inclusivity and equity should also be embedded into municipal plans. Aligning social and environmental goals with corporate and community-wide decarbonization efforts and plans can help address potential equity deficits.

Priority actions to integrate deep decarbonization efforts into governance structures

Corporate-level governance

Community-wide governance

Establish cross-departmental implementation in the organization. Strategically align decarbonization efforts with the municipal strategy and plan. Adopt a climate lens for decision-making in all municipal departments and integrate other priorities with climate actions. Integrate asset management and the decarbonization plan. Develop a carbon budget. Identify areas where strategies and initiatives can be implemented in each department.

Identify stakeholders and potential partners who can take action in their organizations. Launch sector-specific, multi-stakeholder working groups. Establish a collaborative process to undertake joint decarbonization actions.

Examples of an integrated approach to deep decarbonization

Corporate-level governance

• The City of Guelph, ON (population 131,794) continues to work on integrating a climate lens in all city departments for decision-making through the “Sustaining our Future” pillar of its corporate strategic plan. 
• The City of Toronto, ON (population 2,956,024) is developing a climate lens that evaluates the climate impact of all major decisions, including financial decisions, made by the city.
• The City of Montreal, QC (population 1,704,694) has adopted a climate test strategy, similar to the climate lens, to minimize GHG emissions and maximize climate adaptation in all city decisions.
• The Town of Whitby, ON (population 128,377) hired the Sustainability Solutions Group to develop a carbon budget and carbon management framework. Titled Zero Carbon Whitby, the framework will help the town reach its corporate carbon goal of net-zero by 2045.

Community-wide governance

• Our Energy Guelph, in Guelph, ON (population 131,794), implemented a collaborative governance structure for community-wide implementation, where each action is implemented by a task force that has representation from community organizations, businesses and the municipality.
• The City of Victoriaville, QC (population 47,796) collaborated with the Chamber of Commerce, Economic Development Corporation, Cégep de Victoriaville, the University of Quebec and other community organizations to advance climate-related projects.
• The City of Saskatoon, SK (population 245,181) engaged the public and other stakeholders to design a Home Energy Loan Program (HELP). Through the Retrofit Roundtable, a collaboration with the Saskatoon & Region Home Builders' Association, the city engaged the building industry, mechanical trades and the realtors' association to identify how these stakeholders could inform and use the program.
• 

Budgeting and financing

Implementing a deep decarbonization plan requires internal and external funding. Along with tax revenue and provincial and federal funding, other options include revolving funds, public/private investments and green bonds. In addition, decarbonization initiatives should be planned ahead of the budgeting cycle and resources and funding aligned with current and future climate objectives.

Corporate-level governance

Community-wide governance

Align with the budgeting cycle to fund initiatives and projects. Establish a revolving fund for capital projects. Adopt lifespan costing and commit to projects with a longer timeframe. Consider innovative funding options such as public/private partnerships and green bonds.

Identify opportunities for private sector investment (e.g., electric vehicle charging stations). Encourage partners to fund internal initiatives that further community-wide goals (e.g., greening their fleet). Encourage corporate partnerships (e.g., solar installation by one company on another company’s roof; electric vehicle charging stations by one company on another company’s property). Provide core funding for multi-stakeholder entities.

Municipal examples of effective budgeting and financing for deep decarbonization

• Since 2011, the City of Markham, ON (population 353,000) has had strategies to reinvest financial savings from emissions reductions directly into upcoming energy conservation and climate mitigation projects.
• The City of Toronto, ON (population 2,956,024) established a green debenture program to finance or refinance new and existing capital projects that contribute to environmental sustainability.
• The Town of Bauline, NL (population 475) re-allocated some of its budget and invested provincial and federal funding in renewable energy infrastructure.

Assess your current governance structure

The questions below can help you and other members of your municipal climate action team reflect on and assess your governance structure for deep decarbonization

• How are you involved in the decarbonization planning process? How do you intend to be involved in decarbonization governance of your municipality?
• Are you involved in municipal climate action networks for local leaders (e.g., Climate Caucus)? If you are already a member, have you shared your learnings with other senior leaders and members of your municipal climate action team? Does your corporate-level or community-wide governance structure address the five governance components, namely coordination and oversight, communication, monitoring and reporting, integrated approach to decarbonization, and budgeting and financing?
• Where are climate staff situated in your municipal structure? Is this the ideal location to support coordination, communication, monitoring and action?
• If you are in a medium to large size municipality, is there a cross-departmental group overseeing the progress and implementation of the corporate climate action plan?
• What barriers do you face in implementing your plan? Is your community-wide governance structure set up to address these barriers? Does it include a diverse range of stakeholders?
• Does your governance structure allow for continuous improvement if adjustments are needed to achieve your targets?

Key terms

Climate lens: A perspective that adds consideration of climate impacts into planning and approval processes. Using a carbon budget is one tool to bring a climate lens to municipal decision-making.

Corporate climate action plan: A plan that focuses on reducing GHG emissions that are directly controlled by the local government (e.g., municipal operations and fleets).

Community-wide climate action plan: A plan that focuses on reducing GHG emissions within the boundaries of the community, requiring commitment and effort from many actors in the community.

Deep decarbonization: The process of reducing carbon dioxide and other GHG emissions at a rate that ensures net-zero emissions at the community level by the year 2050 and significant reductions by 2030.

Deep decarbonization plan: A corporate or community-wide climate action plan that aims for at least 80 percent reduction of GHG emissions by 2050. (Note: Although the word carbon (in the sense of carbon dioxide equivalent) is often used, all GHGs are considered as part of deep decarbonization plans and carbon neutrality goals.

Stakeholders: Persons or groups who are directly or indirectly affected by a project. They may also have interests in the project or influence positive or negative) on the project outcome.

Equity-seeking groups: Communities that experience significant systemic barriers to participating in society; these are often barriers to equal access to opportunities and resources due to systemic discrimination. The barrier may be due to factors such as age, ethnicity, race, nationality, disability, gender, sexual orientation, nationality, or economic status. It is important that communities include diverse groups in their decision-making to make meaningful and just decisions about their governance approach.

Municipal carbon budgeting: A tool that tracks GHG emissions with municipal finances, where municipalities create a carbon budget within which their GHG emissions must fit. A carbon allocation is added to each proposed project and ongoing operational cost to assess its climate mitigation potential against the municipality’s remaining carbon budget. This approach holds municipalities accountable for their long-term climate targets and allows for transparent and accurate monitoring of decarbonization efforts.

About this factsheet

This factsheet was created through a partnership between FCM’s Municipalities for Climate Innovation Program (MCIP) and the University of Waterloo’s Dr. Amelia Clarke and Ying Zhou. The information is based on literature reviews and interviews with 11 partner organizations and 51 local governments that were part of MCIP’s Transition 2050 (T2050) initiative. T2050 provided grants to regions of all sizes in Canada to help them reach significant carbon emissions reduction targets.

The factsheet also draws on Deep Decarbonization in Cities: Pathways, Strategies, Governance Mechanisms and Actors for Transformative Climate Action, by Samantha Hall Linton.