New investor grouping inspired by Climate Action 100+ to develop consistent dialogue with carbon-intensive firms.
A coalition of investor associations has launched an initiative to spur dialogue between the financial community and Canadian corporations to promote a just transition to a net zero economy.
Founded by 27 institutional investors with C$3 trillion in assets, the Climate Engagement Canada (CEC) is coordinated by investor networks including the Responsible Investment Association (RIA), Shareholder Association for Research and Education (SHARE) and Ceres.
CEC’s launch follows a 2019 recommendation by Canada’s Expert Panel on Sustainable Finance to establish a national engagement programme along similar lines to the global Climate Action 100+ initiative, to drive a broader and more consistent dialogue with Canadian issuers around climate risks and opportunities.
Climate Action 100+ is a global coalition of investors with US$55 trillion AUM focused on engagement with the world’s most carbon intensive firms to improve climate change governance, cut emissions and strengthen climate-related financial disclosures.
CEC participants will identify approximately 40 of Canada’s highest greenhouse gas-emitting corporations, then work collaboratively to engage with the companies to encourage leading practices.
“Climate Action 100+ set a clear precedent for collaborative shareholder engagement,” said Barbara Zvan, CEO of University Pension Plan and a former member of Canada’s Expert Panel on Sustainable Finance, who will lead the CEC initiative.
“The question for the Expert Panel was how to adapt this successful model to the Canadian context to amplify climate ambition and action at home. What CEC delivers is a unified vision from Canada’s financial community and support for our businesses in finding competitive advantage in the transitioning economy,” she added.
The RIA and SHARE will serve as the joint secretariat for the CEC, which is also backed by the UN-convened Principles for Responsible Investment (PRI).
“As a country heavily dependent on fossil fuels, Canada’s transition to net-zero by 2050 is especially challenging. Collaborative engagements like CEC are crucial to harnessing the collective climate ambition of Canada’s financial community required for the country to fulfil its commitments to the Paris Agreement and undergo a just transition to a zero-carbon economy,’ said Fiona Reynolds, CEO of the UN-supported Principles for Responsible Investment.
Canadian pension schemes were recently asked to step up their efforts to address the climate risks in their portfolios. The ten largest pension fund boards in Canada were recently sent letters requesting information on how they are meeting their legal fiduciary obligations in the face of growing climate-related financial risks as part of a campaign by Shift: Action for Pension Wealth and Planet Health, Canadian environmental organisation Environmental Defence and law charity Ecojustice.