(Calgary) Energy giant Enbridge is urging its shareholders at its next annual meeting to vote against a shareholder proposal calling on it to do more to disclose the climate impact of its pipeline operations.
The shareholder proposal filed by Investors For Paris, a group that aims to hold publicly traded companies accountable for their promise to reach net zero emissions, calls on Enbridge to disclose its Scope 3 emissions, it is that is to say the emissions produced by the oil and natural gas that it transports in its pipeline network.
“If a company’s financial viability depends on releasing Scope 3 emissions — as is the case for Enbridge — then it is essential that investors have a complete picture of these emissions,” we can read in the proposal.
Scope 3 emissions are those for which a company is indirectly responsible, such as greenhouse gases generated when a customer uses its products.
Most major Canadian energy companies currently disclose the emissions they themselves produce in their daily business operations, but are much more reluctant to take responsibility for final emissions, such as those produced when consumers burn fuels. fossils in their cars.
Including Scope 3 emissions in their climate reports would significantly increase the size of the carbon footprint that energy companies must report to investors and the public.
Enbridge currently discloses Scope 3 emissions produced by its natural gas utility operations, accounting for emissions generated when customers burn natural gas to heat their homes.
But it does not provide an accounting of the end use of the fossil fuel products it transports in its pipeline business.
Director of corporate engagement at Investors For Paris, Duncan Kenyon, believes this situation is problematic, as shareholders need to know whether the company’s portfolio is aligned with a future that will be increasingly dependent on energy. renewables and other forms of clean energy.
“Many shareholders know that Scope 3 emissions are not just a metric that demonstrates a company’s impact on greenhouse gases. They also serve to observe where the company is heading in the context of the energy transition,” he explained.
“This is a measure that highlights the company’s risk of exposure to the energy transition. »
More and more common
Scope 3 emissions are increasingly scrutinized in shareholder proposals. Over the past two years, according to a database from Ceres, an organization that tracks climate-related shareholder resolutions, more than 30 proposals related to scope 3 emissions have been presented at general meetings of large listed companies in stock market in North America.
Investors for Paris presented a similar resolution at Enbridge’s annual meeting last year, where approximately 25% of shareholders voted in favor of the company adopting disclosure practices. more extensive scope 3 emissions.
In its response to the proposal presented this year, Enbridge noted that it is currently unable to accurately and reliably track third-party use of the oil and natural gas it transports for its customers.
The company added that it takes Scope 3 emissions seriously and in 2021 began reporting the “emissions intensity” of the energy it transports by pipeline.
But it raised that there are no clear regulatory guidelines or widely accepted methodologies for accounting for end-use emissions from the products it transports.
“We will make further improvements to our Scope 3 emissions where accepted definitions for our business exist and decision-useful data is available,” the company said.
In urging shareholders to vote against the proposal, Enbridge also warned investors to be wary of environmental activists who acquire shares in a company for the sole purpose of presenting a proposal to campaign for change.
“Shareholder proposals have become one of the tools used by some environmental activists to gain publicity,” the company argued.
Enbridge’s annual general meeting will take place on May 8.