In response to our lobbying shareholder proposal, Enbridge replied in its proxy circular (pp. 123-124). This is I4PC’s rebuttal of its reply.
Overall, Enbridge replied in vague terms and ignored most of the substance of the proposal, using references to its existing systems that are clearly inadequate given the evidence presented. Enbridge mainly talks about its current lobbying disclosure practices without acknowledging that these same practices have not prevented the many controversies listed in the proposal’s supporting statement.
Enbridge also accuses the proponents of covertly aiming to change and direct Enbridge’s climate-lobbying policies and practices. Enbridge should instead stick to the language of the resolution rather than accuse the proponents of covert intentions. It is also ironic given that a key shortcoming for Enbridge is the failure to disclose its activities via political front groups (something the company does not deny) despite the risk that is entailed in practicing this type of action and approach.
Enbridge statement: “Our advocacy activities closely align with our corporate strategy and include advocacy efforts to bolster our emissions reduction and net zero goals. We support the goals of the Paris Agreement and advocate for efficient and effective public policies designed to reduce emissions.”
Response: Enbridge presents no examples of pro-climate lobbying to prove this claim. In fact, as the proposal documents, Enbridge is lobbying against implementation of New York’s Climate Leadership and Community Protection Act via its membership in New Yorkers for Affordable Energy. Or, Enbridge’s CEO has lately been advocating for increased fossil fuel infrastructure in Canada, which would raise the country’s emissions, the opposite of the goal of the Paris Agreement.
Enbridge statement: “In 2021, Enbridge published its initial Trade Association Climate Review which provides detailed assessments of the alignment between our climate-related policy positions and those of key industry associations to which we contribute $50,000 or more in dues.”
Response: The proposal details Enbridge’s participation in the front groups ‘Great Lakes. Michigan Jobs.’, ‘Minnesotans for Line 3,’ and ‘New Yorkers for Affordable Energy.’ With its narrow focus on “industry associations,” none of this activity nor associated costs are disclosed by Enbridge, despite the political risk associated with them.
Enbridge statement: “Enbridge will update and enhance our earlier Trade Association Climate Review.”
Response: This is encouraging, but without expanding the scope to include Enbridge’s participation in political organizations like those detailed above, investors will remain in the dark about the company’s political activities that create risk.
Enbridge statement: (Paraphrasing) It did not fund Minnesota police activities during Line 3 protests – it paid into an escrow account managed by the Minnesota Public Utilities Commission that was used for policing.
Response: This distinction, while correct, does not address the issue: there was widespread media coverage that Enbridge was the ultimate source of this funding, causing controversy and raising political risk for Enbridge as the company became associated with police action that was reported as violent and aggressive.
Enbridge Statement: “The proponent is not simply seeking more climate-related lobbying information from the Company for the benefit of shareholders. On the contrary, its submission is based on disputed facts and is covertly aimed at changing and directing our climate-lobbying policies and practices, without due consideration of our strategy and business risks.”
Response: Enbridge needs to stick to the language of the resolution rather than accuse the proponents of covert intentions. Greater disclosure of Enbridge’s U.S. activities – including participation in front groups and a forthright assessment of associated political risk – would serve not only to arm the Board with better information, but also allow shareholders to make their own more accurate assessment of Enbridge’s political positioning.
Enbridge statement: “It is clear that the shareholder proponent has not assessed the risks and consequences of its request in the way that we, the Board of Directors, prudently and dutifully have.”
Response: We believe that it is prudent for the Board to assess and explain to shareholders the risks associated with higher risk political activities. For example the board would be well served to assess and explain to shareholders what are the reputational and political risks associated with having a major U.S. media outlet like Politico writing a headline accusing Enbridge of looking to disrupt the Michigan Governor’s re-election campaign.
Enbridge’s response fails to talk about key aspects of the proposal:
- Enbridge’s assertive practices have clearly alienated key political and other stakeholders, to the point where the Michigan administration continues to fight the company in court, and where the Line 3 expansion in Minnesota was the site of one of the largest civil disobedience protests in recent U.S. history.
- Enbridge has not explained how making political donations to climate obstructionist politicians like Joe Manchin is consistent with net zero.
- Enbridge does not discuss or dispute the D grade it is awarded on climate-aligned lobbying by InfluenceMap, an information provider to the CA100+. Enbridge’s lobbying activities are further elaborated on in InfluenceMap’s recent report on the Canadian oil and gas sector.
1 We find evidence of bad faith in Enbridge’s publication of our shareholder resolution in the management circular as the shareholder proposal was altered (removed spacing, smaller italicised font) by Enbridge to make it hard for voting investors to read the resolution. This re-formatting of our resolution contrasts greatly with the clear formatting used for the company’s response.