{"id":64649,"date":"2024-08-20T10:11:57","date_gmt":"2024-08-20T17:11:57","guid":{"rendered":"https:\/\/energi.media\/?p=64649"},"modified":"2024-08-20T10:11:57","modified_gmt":"2024-08-20T17:11:57","slug":"canada-may-lose-out-as-fossil-companies-alienate-investors-on-sustainability-standards","status":"publish","type":"post","link":"https:\/\/energi.media\/news\/canada-may-lose-out-as-fossil-companies-alienate-investors-on-sustainability-standards\/","title":{"rendered":"Canada may lose out as fossil companies alienate investors on sustainability standards"},"content":{"rendered":"<p><em>This article was published by <a href=\"https:\/\/www.theenergymix.com\/canada-may-lose-out-as-fossil-companies-alienate-investors-on-sustainability-standards\/\" target=\"_blank\" rel=\"noopener\">The Energy Mix<\/a> on Aug. 20, 2024.<\/em><\/p>\n<p><em><strong>By Mitchell Beer<\/strong><\/em><\/p>\n<p>Fossil fuel and mining companies in Canada are beginning to alienate the institutional investors they depend on with their steadfast refusal to adopt sustainability disclosure standards that are already in effect in 164 countries around the world,\u00a0<em>The Energy Mix<\/em>\u00a0has learned.<\/p>\n<p>The initial signs of discord are showing up as the federal government inches closer to announcing a sustainable finance taxonomy that may\u00a0<a href=\"https:\/\/www.theenergymix.com\/breaking-green-taxonomy-coming-soon-with-tough-rules-for-transition-investments\/\">exclude<\/a>\u00a0new fossil fuel investment and set strict criteria for attaching a green label to \u201ctransition\u201d projects in high-emitting industries. But while they wait for Finance Canada to take action on a standard that has been under development for half a decade, some investors are thinking about voting with their feet.<\/p>\n<p>\u201cAfter\u00a0<a href=\"https:\/\/www.theenergymix.com\/canadian-pension-fund-rejects-divestment-takes-fire-for-fossil-entanglements\/\">doing engagement<\/a>\u00a0for so many years,\u201d said Barbara Zvan, president and CEO of University Pension Plan Ontario (UPP), \u201cpeople who\u2019ve been a part of those engagements are starting to morph their portfolios.\u201d While there is no move afoot to pull investment dollars out of whole sectors like fossil fuels or mining, institutional investors like pension funds \u201cwill make more and more of those decisions\u201d as the target dates for meaningful emission reductions get closer, she told\u00a0<em>The Mix.<\/em><\/p>\n<p>Zvan cited shareholders\u2019\u00a0<a href=\"https:\/\/www.theguardian.com\/australia-news\/2024\/apr\/24\/woodside-energy-climate-plan-rejected-shareholders-annual-general-meeting-protest-vote\">overwhelming rejection<\/a>\u00a0of the climate plan put forward last April by Perth, Australia-based Woodside Energy as a sign of things to come. \u201cInvestors said no, not good enough,\u201d she said. \u201cWe will see more and more of that,\u201d as well as an uptick in shareholders\u00a0<a href=\"https:\/\/www.theenergymix.com\/cataclysm-for-industry-good-day-for-life-on-earth-as-fossils-lose-legal-shareholder-battles\/\">voting against corporate directors<\/a>\u00a0if their response to climate change falls short.<\/p>\n<p>After a couple of years of record profits, driven by the COVID-19 recovery and Russia\u2019s war in Ukraine, the evolution in investors\u2019 attitudes won\u2019t lead to an immediate change in corporate behaviour. \u201cThe challenge right now is that oil and gas companies have lots of money,\u201d Zvan said.<\/p>\n<p>Moreover, UPP Director of Stewardship Delaney Greig said the last decade has seen a shift in hiring practices in many Canadian fossil companies: rather than bringing in outside experts in stakeholder issues or mediation to fill senior sustainability positions, they\u2019re hiring executives whose past experience is \u201csquarely within the industry\u201d to address sustainability \u201cas part of a portfolio role.\u201d<\/p>\n<p>But that complacency won\u2019t help them draw the international investment Canada needs, Zvan said. From the point of view of international investors, with 164 countries already adhering to international standards for sustainability disclosures, \u201ca lot of them just say no, because Canada is not a focus\u201d when natural resource companies fail to step up.<\/p>\n<p>\u201cWhen you look at the data, Canadian companies are woefully behind\u201d compared to their counterparts in Australia and Asia, and \u201cI find it boggling,\u201d Zvan added. In an email, she cited Climate Engagement Canada analysis that\u00a0<a href=\"https:\/\/climateengagement.ca\/cec-benchmark\/cec-net-zero-benchmark-company-assessments\/\">showed<\/a>\u00a0a focus list of Canadian companies falling behind their global peers in short- and medium-term emission reduction targets and far behind on long-term and net-zero targets, decarbonization strategies, and alignment of their capital allocation with a net-zero future. Mining companies received a similar bleak assessment for their corporate climate policy engagement.<\/p>\n<p>\u201cWhat is going on here that makes us think we\u2019re special?\u201d Zvan asked.<\/p>\n<p>The Globe and Mail\u00a0<a href=\"https:\/\/www.theglobeandmail.com\/business\/article-investors-support-proposed-canadian-sustainability-disclosures-but\/\">reported<\/a>\u00a0late last month that the 169 responses the Canadian Sustainability Standards Board received on the sustainability reporting standards showed \u201ca stark divide between investors such as pension funds and asset managers demanding detailed comparable data and companies that say some factors are still too uncertain and implementation too burdensome.\u201d The news story cited two Calgary-based companies, utility and industrial conglomerate ATCO and pipeliner Enbridge, as well as Toronto-based Barrick Gold, opposing the detailed reporting the financial sector increasingly expects.<\/p>\n<p>Financial Reporting &amp; Assurance Standards Canada has the full series of responses\u00a0<a href=\"https:\/\/www.frascanada.ca\/en\/sustainability\/documents\/2024_csds1_2_responses\">here<\/a>.<\/p>\n<p>In April, Zvan led a sign-on in which 230 members of Canada\u2019s Clean50 urged Finance Minister Chrystia Freeland, Environment Minister Steven Guilbeault, and Natural Resources Minister Jonathan Wilkinson to get on with the job of adopting a sustainable finance taxonomy that has been under development since 2019.<\/p>\n<p>\u201cWe are concerned that Canada has become an outlier amongst its G-7 peers and most of our other trading partners, and is falling further behind with every passing day,\u201d the letter\u00a0<a href=\"https:\/\/www.theenergymix.com\/duelling-letters-urge-ottawa-to-finish-sustainable-finance-rules-with-or-without-fossil-fuels\/\">stated<\/a>. \u201cA Canadian taxonomy can make Canada a more attractive global investment destination, accelerating much needed transition finance and facilitating the deployment of new climate innovations,\u201d while helping companies to \u201cfinance their transition plans and decarbonize operations at a faster pace.\u201d<\/p>\n<p>Clean50 founder Gavin Pitchford, who coordinated the sign-on along with Zvan, said Canadian companies will miss out on international investment unless the country adopts a robust taxonomy. \u201cNo one in Europe is going to call Canadian companies and whine about lack of disclosure,\u201d he told\u00a0<em>The Mix\u00a0<\/em>in an email. \u201cThey\u2019re just going to send their capital somewhere else and Canadian companies across the board will lose.\u201d<\/p>\n<p>The sign-on drew support from more than a dozen major investment firms and pension funds with many billions of dollars under management, as well as seven venture capital firms and the CEOs of more than 50 cleantech firms that \u201cclearly benefit once a taxonomy is implemented because they will be eligible for greater investment,\u201d Pitchford wrote. \u201cIt will unlock capital to which they presently have no access,\u201d the lack of which \u201cis starving emerging Canadian cleantech firms of the capital they need to expand. Capital their foreign competitors\u00a0<em>can<\/em>\u00a0access.\u201d<\/p>\n<p>And \u201cmeanwhile, not a single signer from any of the Big Five banks or anyone presently or previously employed by a resource extraction firm. Not one.\u201d<\/p>\n<p>Pitchford said that wasn\u2019t entirely surprising. \u201cObfuscation and endlessly kicking the can down the road is what they do,\u201d he wrote. \u201cThey think a Poilievre government will buy them another four years of pain-free [resource] extraction, so they\u2019ll leverage that as best they can.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"<div class=\"mh-excerpt\"><p>This article was published by The Energy Mix on Aug. 20, 2024. By Mitchell Beer Fossil fuel and mining companies in Canada are beginning to alienate the institutional investors they depend on with their steadfast <a class=\"mh-excerpt-more\" href=\"https:\/\/energi.media\/news\/canada-may-lose-out-as-fossil-companies-alienate-investors-on-sustainability-standards\/\" title=\"Canada may lose out as fossil companies alienate investors on sustainability standards\">[Read more]<\/a><\/p>\n<\/div>","protected":false},"author":6,"featured_media":64650,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"give_campaign_id":0,"footnotes":""},"categories":[1],"tags":[322,13,80,14,266,542,16,529],"class_list":{"0":"post-64649","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-news","8":"tag-business","9":"tag-canada","10":"tag-environment","11":"tag-featured","12":"tag-government","13":"tag-investment","14":"tag-oil-and-gas","15":"tag-policy"},"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - 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