Toronto, ON, January 10, 2017 – Despite growing attention to the physical, financial and regulatory impacts of global climate change, a new report from the Shareholder Association for Research and Education (SHARE) finds that companies in Canada’s most carbon-intensive sectors are not demonstrating “climate competency” in the boardroom.
Investors are increasingly concerned about the risks associated with climate change and what impacts these risks may have on companies in their portfolios across the short, medium and long-term.
“Risk management and long-term strategy are fundamental responsibilities of boards of directors, and climate risk represents a major challenge to Canadian companies,” says SHARE Engagement Analyst, Laura Gosset, who co-authored the report. “Boards of directors have to think about a very different future as we transition to a lower-carbon economy. Investors need boards to demonstrate that they are “climate-competent” – that they understand and prioritize climate change risks to long-term value, including the physical, legal, reputational, stranded asset and regulatory risks related to climate change.”
SHARE reviewed disclosures from 52 companies across Canada’s energy and utilities sectors according to three aspects: board skills and experience, oversight, and risk disclosure. While more companies are starting to talk about climate change in their reporting, only three boards disclosed any expertise amongst their members on the issue, and no board included climate change knowledge in its board competency matrix.
The report, “Taking Climate on Board: Are Canadian energy and utilities company boards equipped to address climate change?” urges boards at publicly-traded corporations to speak more openly about their efforts to address one of the most serious challenges of our times. Boards of directors that devote the time and resources to fully understand the climate risk they face will be better prepared to both meet the challenge and seize the opportunities.
To shed some light on board climate competency, SHARE is approaching the companies surveyed in its report on behalf of its institutional shareholder clients to prioritize climate change competency in board development and risk assessment processes.
– 30 –
Notes for Editors
Interviews available with Laura Gosset, Engagement Analyst
Contact: Norah Murphy, 604.695.2026 or [email protected]
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.
SHARE is a signatory to the U.N. Principles for Responsible Investment (UN PRI).
www.share.ca / @share_ca