Investors for Paris Compliance executive director Matt Price at Bright Angel Regional Park near Duncan, B.C., on July 19. Price and his group are seen as both a thorn in the side of some of Canada's largest companies and a positive force to others.Chad Hipolito/The Globe and Mail
Matt Price doesn’t wield the financial clout of a big-time investor, but when it comes to efforts to hold major companies to account for their environmental pledges, he has quickly made a name for himself in boardrooms across the country.
Mr. Price and his climate advocacy group, Investors for Paris Compliance (I4PC), have elbowed their way into Corporate Canada over the past three years using the tools of shareholder activism to push for more rigorous disclosure and tougher net-zero targets. They are seen as both a thorn in the side of some of the country’s largest companies and a positive force to others.
The group aims to break through a culture among companies and investors that it says tends to be too cozy, and fill a gap left by regulators that have been lenient when it comes to setting realistic climate targets.
I4PC, named for the 2015 international pact on emissions reduction, pushes its objectives by launching shareholder proposals at annual meetings in partnership with other investors. Mr. Price leads the outfit as a veteran of numerous environmental campaigns.
“Three or four years ago, there were a lot of companies in Canada starting to make net-zero commitments or pledges, and my question was, ‘Who’s watching? Who’s tracking that stuff?’ ” he said. “It just felt like there was a real gap in the landscape on that.”
I4PC is part of a growing global movement of increasingly sophisticated activists putting emissions-reduction and energy-transition demands in front of shareholders of oil and gas companies, banks and insurers, among others.
In this year’s proxy season, the group got seven resolutions onto meeting agendas, targeting Power Corp., Suncor Energy Inc., Toronto-Dominion Bank and Enbridge Inc.
It attracts media and investor interest with reports into companies and industries. In early July, it released a study into the property and casualty-insurance industry’s record, saying that in many cases, insurers have underwritten and invested in the high-carbon fossil-fuel industry. In turn, it says, consumers are paying the price in the form of rising premiums owing to more severe weather.
I4PC has also called on regulators to get tough on corporate climate assertions. The group made waves early this year when it lodged complaints with securities commissions about the sustainable finance policies of the country’s five biggest banks, calling them a “$2-trillion-dollar placebo” with little impact on emissions reduction.
The federal government’s recently passed Bill C-59 includes anti-greenwashing provisions that put companies at risk of penalties if their climate-related promises do not stand up to scrutiny. However, Mr. Price said “securities regulators should not be hiding behind C-59,” arguing the securities law still exists and they need to police greenwashing as a key part of their mandate.
Have the activist efforts made a difference? It depends on how you measure it. So far, I4PC has yet to defeat management in proxy contests. But its vote counts have increased from its early days, in some cases reaching percentages in the high 20s. I4PC has also withdrawn proposals after meeting with senior executives and being satisfied that their companies are moving toward the climate-friendly policies the group is pushing for.
Now, Mr. Price said, I4PC may have reached its peak in terms of support for its proposals, unless major institutional investors that dominate the shareholder ranks of large corporations back its campaigns.
“We’re better in the language that we use in our proposals, and we’ve started to establish more relationships with other institutional investors by doing outreach and those kinds of things,” he said.
“So, for us it’s held steady. We have questions as to whether anything over 30 per cent is really structurally possible. Like any community, there’s a progressive element and I think we’re kind of hitting a ceiling there.”
Mr. Price, 54, got his start far from the financial world. After university, he became an activist for non-governmental organizations, jumping into campaigns against salmon farming on the B.C. coast, then fights over logging on Clayoquot Sound and in the Great Bear Rainforest. He spent time in the U.S., trying to persuade lumber customers to exert their influence to get Canadian loggers to stop clear-cutting.
From there, he moved to decarbonization concerns. He says he came to the realization that the problems originated not in the streets, but in corporate boardrooms, where capital-investment decisions drive action or inaction on achieving net zero. He formed I4PC, with funding from such charitable foundations as the Trottier Family Foundation and the McConnell Foundation. It has now been active for three annual meeting cycles, and has attracted a small team to join in talks and dig into data.
“I’m not really a numbers person myself. I’ll do the numbers if I need to, but now we have five people. We’re lucky that we’ve got some people who have studied economics and law,” he said. “My job these days is more at the macro level and strategy level, and leaving number crunching to people who are better at it than I am.”
I4PC sought to push Enbridge, a perennial focus of the group, to tally the emissions from hydrocarbons that flow through its pipelines as Scope 3 – indirect emissions – arguing that the oil and gas shipments are material to Enbridge’s business. Not doing so, it asserts, vastly underplays what’s required to meet its net-zero goal.
Enbridge ENB-T opposed the resolution. It said definitions of such emissions have not been adequately established, especially for pipeline companies that do not own the products that flow through their infrastructure. It pointed out that disclosure rules recently set by the U.S. Securities and Exchange Commission do not require Scope 3 emissions, partly because of measurement uncertainty.
It was the second time in as many years that I4PC got the proposal up for a vote. In 2023, 24.4 per cent of shareholders supported it, and another 4 per cent abstained. This time around, 27.3 per cent voted in favour and another 1 per cent abstained.
Relations between the two are anything but warm.
Pete Sheffield, Enbridge’s chief sustainability officer, said company officials first met with I4CP in 2021, and had several subsequent discussions aimed at avoiding a shareholder resolution. They explained the company’s net-zero plan, business strategy, ways that Enbridge was trying to reduce emissions while helping its customers do the same, and how it is allocating capital, he said.
Company officials also described how Enbridge was looking for sustainable business opportunities. The two sides failed to see eye to eye.
Eventually, meetings became less focused on seeking common ground concerning Enbridge’s policies and more on I4PC confirming the deadline to file shareholder proposals, Mr. Sheffield said.
“Candidly, as their supporting statements became a bit more incendiary, there was less practical rationale for engaging directly with I4PC,” he said. “From our perspective, we remain open to dialogue. Certainly leading into this last proxy season, they did not reach out directly to us.”
Mr. Sheffield said that the voting results, while not enough to change corporate policies, show that Enbridge has more work to do in explaining its climate and sustainability programs, and making sure it helps investors make buy and sell decisions.
Mr. Price says he believes Enbridge does not see his group as legitimate actors. He criticizes the company for what he calls its “own bespoke approach to Scope 3 emissions.”
“So for us, their claim is it’s not material and that kind of makes me fall off my chair. It’s like, well, that’s your entire business,” he said.
Kyra Bell-Pasht, a lawyer and former Ontario bureaucrat who is I4PC’s director of research and policy, points out that some engagements with other companies have proved less acrimonious. At times, it has pulled resolutions before they came to a vote.
“We see policies evolving and disclosures evolving in what appeared to be direct relation to our engagements” with companies, she said.
Manulife Financial Corp.’s top executives, including chief executive officer Roy Gori, have met with I4PC in recent years over the impact of climate change on life and health, the insurer’s exposure to the fossil-fuel industry and its disclosure practices.
The company explained that it had developed a strategy of not investing in thermal coal or oil and gas not covered by decarbonization plans, and had earmarked $690-million toward energy-transition-related equity investments. It has not committed to full divestment of fossil-fuel holdings, however.
Still, meetings were constructive, and I4PC opted not to launch a shareholder proposal. Manulife officials declined to comment for this story, but a source familiar with the company’s thinking said senior executives believe there is healthy tension between activists and the insurer and, ultimately, both sides appear to want a similar long-term outcome. The Globe and Mail is not naming the source, as they are not authorized to speak publicly about the discussions.
“They’re not there yet, but they actually made some pretty decent announcements in their last climate report,” Mr. Price said.
“So more of that would add up to, I think, a bit of hope that it gets into the structure of the Canadian financial system.”
Jeffrey Jones writes about sustainable finance and the ESG sector for The Globe and Mail. E-mail him at jeffjones@globeandmail.com.