While Canadian companies are committed to climate-related disclosures, few have clear ambitions to reach net-zero emissions, according to a report from a group of institutional investors.
Climate Engagement Canada (CEC), whose members manage over $5.1 trillion in assets, released its first report on the climate-related actions of 40 Canadian companies in the oil and gas, utilities, mining, agriculture, transportation and industrial sectors.
The CEC’s Net Zero Benchmark measured 10 climate indicators, such as net-zero ambitions, decarbonization and climate governance, and determined whether each company had fulfilled, partially fulfilled or not fulfilled each indicator. Companies were assessed on public disclosures between June 2022 and June 2023.
The results show just 18 companies have any net-zero ambitions. Only 15 firms have partially aligned their short-term emission reduction targets to limit the rise in global temperatures to 1.5 degrees Celsius above pre-industrial levels, a target set by the Paris Agreement.
“These results acknowledge areas of positive progress among corporate issuers while identifying where additional strategic guidance and support are needed,” Pat Fletcher, chief executive officer of the Responsible Investment Association and CEC steering committee member, said in a release.
Almost all of the companies committed to align disclosures with the Task Force on Climate-Related Financial Disclosure (TCFD) recommendations or publicly supported the TCFD.
Grocery giant Empire Company Ltd. and Canadian National Railway Co. were top scorers fulfilling three indicators — setting a net-zero emissions goal by 2050 and medium- and long-term aims to meet the Paris Agreement’s temperature target. In contrast, Hamilton, Ont.-based steel company Stelco Holdings Inc. was the only company that has not fulfilled any of the 10 indicators.
Though the transparency is encouraging, the report revealed that none of the 40 firms made capital available to help them meet the emissions reduction. In addition, only two companies committed to a just transition where decarbonization will occur in a fair and inclusive way.