Investor groups in Canada are preparing to launch a national shareholder engagement programme targeting the country’s heaviest emitters.
Ceres, the Responsible Investment Association of Canada (RIA) and investor association SHARE are among those spearheading the initiative, currently known as Climate Engagement Canada.
It will mirror the well-known global engagement network Climate Action 100+, which coordinates hundreds of investors to undertake collaborative engagement with 167 of the world’s most polluting companies, in a bid to steer them towards Net Zero. Research released this week shows CA100+ investors have filed 37 resolutions at North American companies in the run up to this year’s AGM season, requesting disclosure on climate risks, Paris-aligned business strategies and political lobbying.
“We are engaging with multiple institutions and stakeholders across the Canadian finance industry to enable a market-wide dialogue, rather than working in silos” – RIA’s Dustyn Lanz
The new project is a response to a proposal by Canada’s Expert Panel on Sustainable Finance, a government-appointed advisory body that issued a series of recommendations in 2019 on how to foster green finance in the country. One of those recommendations was to establish a domestic engagement programme to mobilise investors and companies around climate risks and opportunities.
“The RIA and Share are now working in collaboration with Expert Panel member Barb Zvan and several associations to bring that programme to life,” explained Dustyn Lanz, CEO of RIA. Zvan was one of four members of the panel during her time as Chief Risk and Strategy Officer at the Ontario Teachers’ Pension Plan. Last year, she became President and CEO of the province’s newly-created University Pension Plan.
“We are engaging with multiple institutions and stakeholders across the Canadian finance industry to enable a market-wide dialogue, rather than working in silos,” continued Lanz. “The scope, depth, and structure of the initiative are still being developed, but our hope is that it can provide additional engagement in key Canadian sectors and companies that are not covered by larger global programmes.”
Despite Canada’s resource-heavy economy, only six of the 167 firms on the target list of CA100+ are headquartered in Canada: Canadian Natural Resources, Teck Resources, TC Energy, Suncor Energy, Imperial Oil and Enbridge.
Today also saw the formation of the University Network for Investor Engagement (UNIE), a coalition of Canadian university endowments and pension plans focused on encouraging companies to reduce greenhouse gas emissions and accelerate the transition to a low-carbon economy.
Ten universities – Carleton, Concordia, McGill, McMaster, Mount Alison, Victoria, York, Université de Montreal, the University of St Michael’s College and University of Toronto Asset Management – will work with SHARE to engage with the North American listed companies in their portfolios.
“The UNIE initiative will focus on key sectors where advocacy can make the biggest difference, including finance, transportation, energy and utilities, and manufacturing,” SHARE said in a statement, adding that the network is open to new members.
Deidre Henne, Chief Financial Officer at McMaster University, said the project is “one clear and focused way university endowments and pension plans can make a difference together”.
“It allows us to influence how, and how fast, that low carbon transition takes place,” she added. “I invite other Canadian universities to join us.”
There has been a flurry of green finance activity in Canada over the past 12 months.
The Office of the Superintendent of Financial Institutions, an Ottawa-based federal agency, is currently consulting on a discussion paper about the implications of climate risk on financial institutions and pension funds. Feedback will “guide the development of regulatory and supervisory approaches”, the agency said in a statement last month, hinting at potential changes to capital requirements.
The Canadian federal government will soon reveal the members of its new Sustainable Finance Action Council, which it announced in November as part of its Fall Economic Statement.
“The government has committed C$7.3m over three years for the Department of Finance Canada and Environment and Climate Change Canada to create a public-private Sustainable Finance Action Council aimed at developing a well-functioning sustainable finance market in Canada,” it said at the time. “The Action Council will make recommendations on critical market infrastructure needed to attract and scale sustainable finance in Canada, including enhancing climate disclosures, ensuring access to useful data on sustainability and climate risks, and developing standards for investments to be identified as sustainable. The government will launch the Action Council in early 2021.”
Just like Climate Engagement Canada, the Sustainable Finance Action Council has been created in response to the recommendations of the country’s Expert Panel on Sustainable Finance. As well as Zvan, the four-strong panel included Tiff Macklem, now Governor of the Bank of Canada; Kim Thomassin, now Executive Vice-President and Head of Québec Investments and Stewardship Investing for pension fund Caisse de dépôt et placement du Québec; and Andy Chisholm, Corporate Director at RBC.