Canadian Investors Unveil Climate Alignment Expectations for Portfolio Companies
A coalition of Canadian investors, representing $5.5 trillion in assets, set out a broad series of expectations for investee companies to align with global climate goals, covering topics including target setting, disclosure and lobbying activities.
The expectations were outlined in a statement coordinated by the Responsible Investment Association (RIA), and signed by leading Canadian investors including the asset management divisions of five of the country’s largest banks. The statement also includes a set of climate commitments for the investor signatories.
In the “Canadian Investor Statement on Climate Change,” the investors express their recognition of climate risks to the economy and to asset values:
“As stewards of capital, we have a fiduciary responsibility to consider all material factors that may impact the risk-adjusted returns of our investments, including climate-related financial risks and opportunities. The value of financial assets could be impacted by the physical effects of climate change – known as physical risks, and by an adjustment toward a net-zero economy – known as transition risks.”
The investors also expressed support and promised action to promote a Just Transition, protecting those who are vulnerable from the major economic shifts involved from the transition to net zero, with a particular focus on Indigenous Peoples.
Expectations for portfolio companies include the establishment science-based 2050 net zero-aligned short and long-term emissions reduction targets, creating robust board and management oversight of climate-related risks, opportunities, and strategies, providing TCFD recommendation-based disclosure of emissions data and climate transition plans, and aligning lobbying with climate and just transition goals.
Priti Shokeen, Head of ESG Research and Engagement, TD Asset Management, said:
“The Canadian Investor Statement on Climate Change sends an important message to the Canadian business community that climate change poses a systemic risk to the Canadian economy, and as investors, we are hopeful that the businesses we invest in put forward credible plans to achieve net zero carbon emissions by 2050.”
The investors’ own commitments include pledges to integrate climate risks into the investment process, to develop climate action plans, and to align stewardship and engagement activities with global net zero climate goals. The investors will also ensure that their own climate-related policy advocacy supports a just transition and 2050 net zero goals, and to provide TCFD-aligned disclosures, including reporting on financed emissions.
Nalini Feuilloley, Head of Responsible Investment, BMO GAM, said:
“BMO GAM has a long history of active involvement in global climate initiatives, and we are pleased to show our support through this statement alongside many of our Canadian peers. We look forward to continuing to advance climate action in our investments, engagements, and industry.”
Click here to view the Canadian Investor Statement on Climate Change and to see the full list of signatories and supporting organizations.