Canada’s climate engagement initiative names 40 target companies

CEC looks to CA100+ model but stresses the need to respect Indigenous rights and achieve a Just Transition.

Climate Engagement Canada (CEC) has named the 40 Toronto Stock Exchange-listed companies that will be targeted for engagement by investors. 

Launched in October 2021, CEC is coordinated by Canada’s Responsible Investment Association, the Shareholder Association for Research and Education (SHARE) and Ceres.

The aim of the initiative is to drive dialogue between the financial community and corporate issuers to promote a just transition to a net zero economy. Its 27 founding members include RBC Global Asset Management, Alberta Investment Management Corporation, Manulife Investment Management, BMO Global Asset Management, Scotiabank and University Pension Plan Ontario. 

The 40 firms selected for engagement operate across the Canadian economy in the oil and gas, utilities, mining, agriculture and food, transportation, materials, industrials and consumer discretionary sectors. 

They include Barrick Gold, Cenovus Energy, Pembina Pipeline Corp, Hudbay Minerals, Air Canada, Canadian National Railway Company (CN), and Canadian Pacific Railway. 

“There are no sidelines in the climate transition. No Canadian sector will be untouched by climate change, and they each have a role to play”

Kevin Thomas

Six Canadian companies – CNRL, Enbridge, Imperial Oil, Suncor, TC Energy and Teck – are already subject to engagement under Climate Action 100+, the global initiative that served as an inspiration for CEC. 

The focus companies announced this week are “the top reporting or estimated emitters on the Toronto Stock Exchange (TSX) and/or with a significant opportunity to contribute to the transition to a low-carbon future and become a sectoral and corporate climate action leader in Canada”, according to a statement from CEC. 

The companies will be encouraged to:

  • disclose climate data in alignment with the best-in-class standard of the TCFD;
  • develop and implement strategies to reduce GHG emissions across value chains;
  • align advocacy activities with the goals of the Paris Agreement;
  • define accountability and oversight of climate change risks and opportunities;
  • and set measurable targets of relevance to their sectors. 

Kevin Thomas, CEO of SHARE and part of the CEC Joint Secretariat, said: “There are no sidelines in the climate transition. No Canadian sector will be untouched by climate change, and they each have a role to play. We’ll be expecting ambitious climate action plans from every focus company, in every sector. Our participants are serious about this, and we expect the companies on our focus list to get serious as well. It’s time to move fast and fix things.” 

Asked whether CEC will disclose which investors will lead engagements with individual firms, Thomas told Responsible Investor: The CEC is a collective effort and its participants are all publicly named. We haven’t yet made any decisions about disclosing the specific participants on each engagement team.  

CA100+’s policy is not to disclose the names of lead investors. A spokesperson previously told Responsible Investor: “To allow investors to engage as effectively as possible and deliver the best possible outcomes, Climate Action 100+ has agreed not to publish details of which signatories engage with which focus companies, and to leave the choice to do so to individual investors. The initiative includes signatories from across the globe, many of whom operate in different regulatory environments and have their own policies on disclosure of engagements, so their appetite for engaging publicly varies.” 

Indigenous rights

Thomas said that, while CEC will mirror the CA100+ benchmarks as far as possible, there will be local variations. One of the critical [issues] we wanted to explore from the start is the question of Indigenous rights and the Indigenous economy here in Canada, so that our just transition benchmarks are built on right relations and contribute to growing that economy.

He added that the CEC’s benchmarks will be developed with Indigenous experts at the table and will be an important part of the engagements undertaken by CEC. We’ve also brought labour experts to the table so that workers are not being sidelined in discussions that affect their jobs and their future.