Proxy Alert

Proxy Alert: Management and Disclosure of Water-related Risks

Imperial Oil Limited
Symbol: IMO (TSX/IMO)
Annual Meeting Date: April 27, 2018
Filer: Fonds de Solidarité des Travailleurs du Québec (FTQ), (Supported by the Shareholder Association for Research and Education)

FOR shareholder proposals at Imperial Oil Limited

Water is integral to Imperial Oil Ltd.’s operations.  As one of the largest oil producing and refining companies in Canada, Imperial’s reliance on water withdrawals and high volume of wastewater production means the company is exposed to potential physical, regulatory and reputational water-related risks across its business segments.

In Canada, a changing climate and increasing demand for water resources are impacting water availability and quality, which could disrupt Imperial’s business operations. For instance, Imperial could face greater limits and higher cost for access to freshwater, more stringent regulations for wastewater treatment, or increased potential for conflict with other water users.

The CDP’s water information request, backed by 643 investors with over US$67 trillion in assets, helps investors assess the risks a company’s operations may pose to ecosystem and community health, as well as the water management policies and practices that help mitigate these risks.

Currently, Imperial Oil is not providing enough information for shareholders to understand the water-related risks and impacts of Imperial’s operations and assess whether the company is appropriately mitigating those risks.

The proposal filed by Fonds de Solidarité des Travailleurs du Québec (FTQ), represented by the Shareholder Association for Research and Education (SHARE), seeks disclosure of comprehensive, comparable, meaningful and measurable information about Imperial’s exposure to and management of water-related risks, either through the CDP or in the company’s own reports:


That Imperial Oil Limited (“Imperial”) respond to the CDP Water information request in 2018 or issue a standalone report to shareholders (at a reasonable cost and omitting proprietary information) detailing the company’s assessment of its water related-risks and its mitigation plan related to those risks.

The report should include the following elements:

Vote recommendation rationale

The company currently reports its overall freshwater consumption and freshwater consumption intensity, but does not provide shareholders any localized or facility level information, or information about withdrawals and discharges. Water risks are specific to geographic location, therefore, reporting on these risks should reflect location-specific challenges. Some information is available through regulatory bodies, but this does not give a comprehensive picture of the company’s water use and impacts across all operations.

The company notes that it identifies and manages water resource risks through its Operations Integrity Management System (OIMS), but has not disclosed any information on how this system identifies water risks, what water risks the company is facing, and what is being done to mitigate them.

The company mentions its support for collaborative industry initiatives, but does not provide shareholders any information regarding the company’s oversight and governance of water-related risks. The company has not disclosed a policy statement that refers to clear guidelines for water use and impact, or any target or goal related to water.

In 2017, many of the company’s peers responded to the CDP water questionnaire, including Cenovus Energy and Husky Energy.  Imperial lags behind, having declined to answer the CDP water questionnaire since 2010.


Laura Gosset

[email protected] | 416-306-6463

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