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Norah Murphy

Roundtable Summary: Using Scenario Analysis to Address Climate-Related Risks and Opportunities

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Since 2012, SHARE has engaged with Canada’s five largest banks on behalf of shareholders to discuss how they are measuring and managing the physical and transition risks associated with climate change. While calls from investors for improved climate-related disclosure have continued to escalate, the banks  raised the concern that effective scenario planning tools that would help them determine the impacts on their businesses of different climate change scenarios are still not well developed and tested. Given the central role banks play in Canada’s economy, overcoming the challenges of incorporating climate change risks into bank decision-making is essential, and SHARE saw that it was not going to be solved in isolation.

In December of 2016 the Financial Stability Board’s Task Force on Climate-Related Financial Disclosures (TCFD) released their recommendations on climate-related financial disclosures applicable to organizations across sectors and jurisdictions, including the financial sector. The TCFD further focused the international financial sector’s attention on the need for disclosure of the potential impacts of climate-related risks and opportunities on an organization’s businesses, strategies, and financial planning under different potential future states (scenarios), and brought together significant technical expertise to guide its thinking.

Using the TFCD’s recommendations as a stepping-off point, last week SHARE and the Global Risk Institute (GRI) convened a collaborative roundtable with Canadian financial institutions on using scenario analysis to address climate-related risk and opportunities.

The workshop brought together 25 senior risk management personnel from Canada’s major banks, insurance companies and asset owners as well as representatives from the TCFD, the 2° Investing Initiative, the United Nations Environment Programme Finance Initiative (UNEP FI), Mercer and JP Morgan Chase, to identify tools, data and methods to understand and incorporate climate-related scenario analysis and stress testing into business planning and risk mitigation practices.

Speakers and participants discussed some of the key challenges associated with using scenario analysis, including:

  • Identifying which scenarios are most relevant (i.e. event-based scenarios, temperature-based scenarios, regulatory scenarios);
  • Addressing the discrepancy in time horizons between climate change-related risks and traditional financial risk models;
  • Determining the extent to which scenarios can address risk interdependencies;
  • Identifying the most relevant metrics and addressing the gaps in data availability.

In addition, participants considered opportunities to collaborate with other financial institutions to continue to build capacity around implementing the TCFD recommendations.

SHARE is committed to supporting this ongoing dialogue with Canadian financial institutions, which we view as a critical step in developing practical and meaningful planning for a 2-degree transition.

Parent company of Tim Horton’s to face gender diversity proposal for second year in a row

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Toronto, ON, June 1, 2017 – Shareholders will once again push for corporate gender diversity at Restaurant Brands International (RBI) (TSX: QSR), the parent company of Tim Horton’s and Burger King. A shareholder proposal on the issue, the second in as many years, will go to a vote at the company’s annual meeting on June 5.

Filed by OceanRock Investments Inc. (Meritas Jantzi Social Index® Fund) with support from the Shareholder Association for Research and Education (SHARE), the resolution asks Restaurant Brands to adopt and publish a policy and plan aimed at improving gender diversity at the board and executive level.

Last year, SHARE worked with OceanRock Investments Inc. to file a similar diversity proposal at RBI which received majority support from independent shareholders. Although the company has since added one woman to its board, she is the daughter of another director, the founder of the hedge fund that is RBI’s majority shareholder. This suggests that the new appointment does not fully address shareholders’ concerns about increasing diversity and independence on the board.

“The purpose of pushing for gender diversity on boards and amongst senior management is not just to address inequity – although that is one of our goals,” says Fred Pinto, CEO of OceanRock Investments Inc. “We also believe that a diversity of backgrounds and independent director viewpoints is a check against groupthink on boards and therefore makes for better companies. RBI’s actions to date don’t meet that test.”

So far this year, gender diversity proposals filed by SHARE clients have resulted in positive commitments from two Canadian companies. A shareholder resolution on board gender diversity at Canfor Corporation received 32% shareholder support leading the company to commit to developing a diversity policy by the end of the year. And on April 28th, 42% of shareholders at Constellation Software voted in favour of a board diversity proposal, prompting Constellation President Mark Leonard to vow to address the issue in a “meaningful way”.

“The results at Canfor and Constellation Software indicate that active shareholders are finally getting results on the issue of gender diversity in the boardroom,” says Delaney Greig, Engagement Analyst at SHARE. “However, progress is slow and there is much work to be done at the top echelons of Canadian companies and throughout the workforce to close the gender gap. This vote at Restaurant Brands International is a chance for shareholders to speak up and send a clear signal to the company that better diversity leads to better companies.”

SHARE is committed to pushing for progress by engaging companies on gender diversity issues on behalf of institutional investors. SHARE also understands that diversity goes beyond gender and is companies to include Indigenous heritage or identity as a board diversity criterion, in keeping with the recommendations of the Truth & Reconciliation Commission.

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Notes for Editors

Interviews available with:

  • Delaney Greig, Shareholder Engagement Analyst, SHARE
    contact: 416-306-6463 or dgreig@share.ca
  • Fred Pinto, CEO, OceanRock Investments Inc.

The Restaurant Brands International AGM will take place at 8:00am on Monday, June 5 at 226 Wyecroft Road, Oakville, Ontario.

The complete shareholder proposal is available on SHARE’s website here.
SHARE’s proxy alert regarding this proposal is available on SHARE’s website here.

 

About SHARE (Shareholder Association for Research & Education)

SHARE is a Canadian leader in responsible investment services, research and education for institutional investors. Since its creation as a non-profit organization in 2000, SHARE has provided proxy voting analysis, shareholder engagement, education, policy advocacy, and practical research on issues related to responsible investment. SHARE’s clients include pension funds, mutual funds, foundations, faith-based organizations and asset managers across Canada. www.share.ca / @share_ca

 

About OceanRock Investments Inc.

OceanRock Investments Inc. is one of Canada’s fastest-growing Investment management organizations, managing $1.4 billion on behalf of Canadian investors. OceanRock offers a comprehensive range of managed portfolio solutions and individual funds to meet the needs of individual and institutional investors. OceanRock is dedicated to offering disciplined, risk-controlled diversified investment solutions to Canadian individual and institutional investors and has a core commitment to Responsible Investing through its Meritas SRI Funds. OceanRock Investments Inc. is a wholly owned subsidiary of Qtrade Financial Group, which is a member of Desjardins Group, Canada’s largest and the world’s fifth largest cooperative financial group. OceanRock is a Sustaining Member of the Responsible Investment Association. https://www.qtrade.ca/funds.jsp

 

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For more information please contact: 

Norah Murphy, Communications Coordinator, SHARE
Telephone: (604) 695-2026
nmurphy@share.ca

Say on Pay gains ground

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Shareholders at TransAlta Corporation used an advisory vote on executive compensation to send a message to the board on April 20th when they defeated the board’s motion to endorse its approach to paying top executives. TransAlta’s “say on pay” vote…

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