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Numbers matter – why we filed net zero resolutions with Suncor and Enbridge

This season we filed two numbers-related net zero shareholder proposals – this one with Suncor on capital expenditures, and this one with Enbridge on scope 3 emissions reporting.

Here is our investor brief regarding the Suncor resolution, and here is our rebuttal of the company’s opposition statement. Similarly, here is our Enbridge investor brief and rebuttal.

Most major Canadian oil and gas companies now have net zero commitments, but none of them are on track to meet them. CA100+ scores five of the largest ones and finds major gaps in their plans.

The resolutions we filed hone in on two metrics that are key to determining whether a company is on track to meet its own net zero commitment.

In the case of Enbridge, our resolution calls for the company to annually report its scope 3 emissions using accepted definitions and in absolute terms. Currently the company uses a narrow definition and reports on an intensity basis, both of which mask the scale of Enbridge’s scope 3 emissions and their trend line.

Scope 3 emissions reporting is critical to get right since it’s a surrogate for demand. Enbridge’s business plans call for expansion of its fossil fuel assets, but in a net zero world demand for fossil fuels will drop, leaving the company exposed to the risk of stranded assets. Failing to properly report on scope 3 emissions leaves investors in the dark regarding this risk.

In the case of Suncor, our resolution calls for the company to disclose more information regarding its low carbon capital expenditures. The bottom line for net zero is the bottom line – what a company spends money on will determine whether it reduces or increases emissions.

To its credit, Suncor has said that it will allocate 10% of its capital expenditures to low carbon business lines. But, the company has not explained how it came up with this number or how specifically it will spend that money and how that will meet its emissions reductions targets. Suncor also does not disclose the emissions impacts of the remaining 90% of its capital expenditures, and whether this will take the company in the opposite direction to its net zero commitment.

In sum, numbers matter. It is one thing to claim adherence to net zero. But unless key metrics align with that commitment, investors will rightly question a company’s preparation and readiness. We encourage investors to vote FOR the resolutions.

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