Tag: ESG investments

That has implications for all of us. As the Bank of Canada puts it, “whatever path is chosen, delaying action heightens the risks to the financial sector and to the entire economy.” But thanks to a new report, Canadian investors now have greater insight into which companies are lagging.

Climate Engagement Canada introduces Net Zero Benchmark assessments

To help both individual and institutional investors in Canada make informed investment decisions, multiple industry initiatives are working to create and improve reporting on how companies approach climate and other ESG (environmental, social and governance) issues. Historically, both in Canada and globally, ESG reporting has been limited at best. But now, as demand for rigorous, usable data grows, fresh resources are emerging. One of these is the new Net Zero Benchmark Company Assessments from Climate Engagement Canada (CEC).

The 41 participants in the CEC initiative include major organizations such as Canada Post, Hydro Québec and McGill University, as well as financial companies like BMO Global Asset Management, AGF Investments and Vancity. CEC’s focus is to engage with publicly traded Canadian corporations that have the highest direct and indirect GHG emissions—among them large grocery chains and transportation and energy companies—and its goal is to measure these organizations’ commitment to climate action and progress toward net-zero.

“This is an attempt to understand what actions companies have taken so that investors can be more effective in pinpointing what companies they should target and on what specific climate issues,” says Tim Nash, founder of Good Investing, a Toronto firm that offers research and coaching to support DIY sustainable investors. “The more specific investors can be in saying to companies, ‘this is what we want,’ the easier it’s going to be for corporations to be able to meet those investor expectations.”

Nash adds that it’s no surprise that “a lot of investors right now want to see strong climate change policies and leadership from Canadian corporations.” A 2023 survey by the Responsible Investment Association found that among a group of Canadian institutional asset managers and asset owners, 76% said that minimizing investment risk over time was among their top three reasons to choose responsible investing, and 93% said they consider a company’s greenhouse gas (GHG) emissions when making investment decisions.

What’s in the Net Zero assessments?

The Net Zero Assessments focus on the top reporting or estimated GHG emitters on the Toronto Stock Exchange (TSX). Nash describes the assessments as “robust and comprehensive”—there’s a lot of detail involved. The key documents released in December are an outline of what the benchmark’s 10 indicators mean and a colour-coded spreadsheet ranking each company on each indicator as either Yes (green), Partial (yellow) or No (red) for 2023. Spoiler alert: there’s not a lot of green. Most of the 41 companies on the list have at least partially set medium-term GHG reduction targets, while only 15 have set short-term targets—all of them partial. Other indicators include whether the company has a decarbonization strategy, a goal to reach net-zero by 2050 and a climate advocacy position in line with the goals of the Paris Agreement, among others.

Which Canadian public companies have net zero ambitions and targets?

Below is part of the Net Zero Assessments colour-coded spreadsheet, displaying the first four indicators (net-zero ambitions, long-term targets, medium-term targets and short-term targets), to give you a glimpse of how the 41 companies are faring. (View the full spreadsheet at Climate Engagement Canada.)

Slide the columns right or left using your fingers or mouse to see even more data, including returns and strategy. You can download the data to your device in Excel, CSV and PDF formats. To reorder the data, tap the header’s arrow you want to compare.