AN OPEN LETTER TO BAY ST
Dear Bay St – The Job’s All Yours (as it should be)
You are major asset owners and asset managers – pension funds, banks, and insurance companies. Canadians look to you to provide for their security.
But now their homes and neighbourhoods are burning and flooding, with worse to come if we don’t change quickly.
To your credit, most of you have committed to reaching net zero in your financed emissions, a necessary step for a secure climate.
And, most of you also rely primarily on the strategy of “engagement” with high-carbon companies in your portfolio in order to meet your net zero commitment.
But, it’s not working.
Canada’s biggest companies in the oil and gas industry are expanding production and emissions – the opposite direction to net zero. Tellingly, they are also complaining loudly about new anti-greenwashing rules.
Their proposed solution, carbon capture, even if it works, will only put a small dent in emissions, and at great cost to taxpayers (your clients).
It’s the products themselves that are the issue, and there is no move to diversify. Indeed, these companies are doubling down on fossil fuels.
For years we have filed shareholder proposals at these companies to expose the risks of falling to transition. Some of you have voted for these proposals, and for that we thank you.
But we have concluded that overall our work is doing more harm than good by providing an excuse for institutional investors to sit on the sidelines because someone else “has it covered.”
This means, with a few exceptions, we are yet to see you step up in a consistent way to press for net zero compliance.
For this reason we are announcing today that we will no longer file shareholder proposals at oil and gas companies.
Instead, if you are committed to achieving net zero, you will implement robust escalation programs for major polluters in your portfolios.
This means publicly calling out plans to increase emissions. It means filing your own shareholder proposals. It means holding Directors accountable when companies fail to act.
And it means dropping companies that aren’t transitioning. Engagement without consequences isn’t taken seriously, and holding on to such companies is undermining your net zero commitment.
It’s time to get serious about results.
Backgrounder – I4PC Challenges Institutional Investors To Live Up To Engagement Commitments
Investors for Paris Compliance (I4PC) has filed shareholder proposals at Canadian oil and gas companies for the past three years, with relatively strong votes ranging from 12% to 98% (in the case of Cenovus where management supported our proposal):
During that time, we saw only one major institutional investor – BCI – file a climate-related shareholder proposal with any Canadian oil and gas company.
Many of Canada’s institutional investors point to their involvement in Climate Engagement Canada and Climate Action 100+ as evidence they are following through on their net zero commitment, but none of them are yet to use the assessments by those bodies to speak out publicly regarding lack of compliance, file shareholder proposals, hold Directors accountable, or to divest.
As a result, Canada’s major polluters continue to remain off track for net zero, and Canadian oil and gas companies in particular are going in the opposite direction to the energy transition by doubling down on fossil fuel expansion.
The key metric in evaluating whether a company is serious about net zero is to “follow the money.” This is known as “CapEx,” or capital expenditures, which show whether a company is actually investing in doing something different as opposed to just talking about it.
The following chart demonstrates that Canada’s largest oil and gas companies are tracking away from net zero, thus far tacitly supported by their major Canadian institutional investors. It should be noted that most of this money is not theirs – they are investing on behalf of Canadians who trust them to plan for their security.
Canada’s Top 5 Oil and Gas Companies By Revenue
| Company | Fossil Expansion Plans | CapEx Alignment | Largest Cdn Owners |
| Cenovus | Approx. 150,000 BOE/d growth in five-year plan, mainly from oil sands (source). | CEC: “No, does not meet any criteria.” | RBC, TD |
| Imperial | No data – Imperial has taken down disclosure documents, but is “breaking production records.” (source) | CA100+: “No, does not meet any criteria.” | RBC, Manulife, TD, BMO, Connor Clark & Lunn |
| Suncor | Plans to grow production by 100,000 bpd within three years (source). | CA100+: “No, does not meet any criteria.” | RBC, TD, BMO, Manulife. |
| Enbridge | Spending plans: USD 18.7 B on new fossil fuels vs. 1.6 B on renewables (source). | CEC: “No, does not meet any criteria.” | RBC, BMO, TD, 1832 (Scotia), CIBC, Scotia |
| CNRL | Company expects 4-5% production in increase in 2025 vs 2024 (Source). Horizon project alone with potential to increase by 76% (source). | CA100+: “No, does not meet any criteria.” | RBC, BMO, TD |