Canadian Companies Failing to Disclose Greenhouse Gas Emissions
Study finds Canadian companies well behind EU and UK in reporting emissions
- Written by Banking Exchange staff
Canadian companies are lagging way behind their international counterparts when it comes to disclosing greenhouse gas (GHG) emissions.
This is according to a new report from the Institute for Sustainable Finance. The report – Assessing Current Canadian Corporate Performance on GHG Emissions, Disclosures and Target Setting – highlights the need for corporations to boost their reporting on environmental issues.
The report is the first comprehensive review of the performance of firms on the S&P/TSX Composite Index, which includes over 200 of Canada’s largest companies.
The research shows that only two thirds of Canada’s publicly traded firms disclose GHG emissions, which is a similar proportion to US firms, but well below those in the EU and the UK. Meanwhile, only a quarter of Canadian companies have set climate targets compared to more than half of companies on the S&P 500, and two-thirds of large UK listed companies.
“Despite progress from Corporate Canada, investors are still facing real limitations in getting the information they need from Canadian corporations as they try to assess their carbon exposure,” said Sean Cleary, co-author of the report and chair of the Institute for Sustainable Finance at Smith School of Business, Queen’s University in Kingston, Ontario.
“This lack of required information creates very real impediments to financial institutions with respect to their capital allocation decisions and their risk management processes.”
The report also notes that among the TSX companies with targets, 15% have published a detailed plan to reach them, while another 62% provide less detail but do communicate some relevant information about how they plan to hit their goal. In addition, a quarter of these companies link achieving climate targets to executive compensation, while another 47% have incentives that are more loosely tied to climate-related issues.
“Canadian firms need to come to terms with what the market is demanding,” added Jim Leech, chancellor of Queen’s University and former president and CEO of the Ontario Teachers’ Pension Plan. “Investors and financial institutions want not only more climate disclosure data, they also want ambitious climate targets that are supported by credible plans to achieve them.”