The lobby group representing CEOs of Canada’s biggest corporations is calling on businesses to disclose the long-term risks they face as a result of the climate crisis.
Companies “have an obligation to demonstrate how they are incorporating the risks of a changing climate into their long-term business strategy,” the Business Council of Canada concluded, in a report released October 30 that called for a “national resource and climate strategy” to meet growing demand for low-carbon energy, National Observer reports.
“There’s increasing demands from shareholders, from regulatory authorities, and so on,” said John Dillon, the council’s senior vice-president for policy and corporate counsel. While businesses “have traditional risks in terms of securities, to disclose any material risks to their business,” he added, climate-related risk “is a growing field of endeavour and study, without necessarily having clear guidelines on how exactly one assesses the risks that a changing climate may create to a business.”
But that newfound interest didn’t stop the Council from touting expansion of the industry most closely tied to climate-related business risk. The report “also recommends that the government ‘prioritize’ infrastructure projects like oil and gas pipelines,” Observer writes. “And it suggests, without providing specific evidence, that Canada can ‘help communities around the world cut their emissions’ by exporting liquefied natural gas, a fossil fuel, to replace coal-fired power plants abroad.”
“All Canadians have paid the price for inadequate pipeline infrastructure, which seriously constrains energy exports,” the report stated.
But Observer notes that climate change and its impacts “will change how Canadian companies can do business in the future—or even whether they can stay in business. Canada’s financial regulator has said firms may be forced to pay for damages caused by climate-driven extreme weather, watch their oil and gas holdings devalued, or be hit with class-action lawsuits trying to recover losses from misrepresented assets.”
Dillon said questions about climate-related risk are spreading, with big institutional investors like BlackRock and the Canada Pension Plan leading the way. “That’s what companies have to assess, that’s what their boards (of directors) are asking for, that’s what institutional investors and others are asking for,” he said. “It’s an area where it’s somewhat different from what companies are traditionally focused on.”