Sustained and growing opposition in British Columbia may turn out to be the least of Kinder Morgan Canada’s problems, after the Alberta Securities Commission (ASC) agreed Monday to review Greenpeace’s complaint that the company failed to adequately disclose the climate risks it faces when it issued its first annual report.
“Under Alberta’s securities law, a failure to fully disclose risks to shareholders can result in fraud charges or class action lawsuits,” Greenpeace Canada notes in a release.
“The opposition of the B.C. government is only one ripple in a sea of troubles facing Kinder Morgan Canada (KML),” said Senior Energy Strategist Keith Stewart. “In its report to shareholders, the company admits that climate change threatens its facilities, and that the alliance of Indigenous and environmental climate protectors may block construction of its Trans Mountain Expansion Pipeline.” But “despite these disclosures, we believe the company is still underplaying the risk that a successful transition to a low-carbon economy would pose to their business model.”
Monday’s release, a summary of Greenpeace’s 13-page assessment of KML’s 2017 annual report, says the company acknowledged public opposition to the Trans Mountain pipeline expansion, technology and policy changes resulting in reduced fossil fuel demand, and climate impacts like sea level rise and extreme weather, as threats to the project.
However, Kinder failed to disclose legal and fraud investigations facing fossil companies that have bought space on the pipeline, or include a low-carbon scenario in its public analysis. The recent Task Force on Climate-Related Financial Disclosure (TCFD) “recommended that all organizations exposed to climate-related risks use scenario analysis to help inform their strategic and financial planning process—and to disclose how resilient their strategies are to a range of plausible climate-related scenarios,” including compliance with the Paris agreement, Greenpeace notes.
“KML acknowledges that it is exposed to a range of climate-related risks, but does not provide a coherent assessment of how these risks inform their planning or how resilient their business strategy is” in a low-carbon future.
“What is Kinder Morgan’s Plan B for the scenario where the world stops global warming?” Stewart asked. “Whether it’s acknowledging the threat posed by the lawsuits alleging oil companies hid what they knew about climate change, or spelling out what management would do if new technology and climate policies reduce the demand for oil, Kinder Morgan needs to come clean with its investors and the public.”
In another call for disclosure, a shareholder motion in late March instructed Kinder Morgan Canada’s Houston-based parent company to set methane reduction targets by this fall. The proposal “says a strong program of measurement, mitigation, target-setting, and disclosure would reduce the company’s regulatory and legal risk,” the Seeking Alpha blog reports.
In a shocking, truly shocking development, “KMI’s board recommends shareholders vote against the proposal, saying such a report would duplicate other efforts the company is making to reduce its carbon footprint.”