The officially disclosed carbon footprints of Canada’s largest oil companies could balloon in size if tough new climate rules proposed earlier this year by a U.S. regulator come into effect.
The U.S. Securities and Exchange Commission’s proposal — which at this point has not been enacted and faces stiff opposition from industry groups and conservative lawmakers — would require publicly listed companies to account for their total “life-cycle” greenhouse gas emissions.
The rules would apply not only to publicly listed companies south of the border, but also to the more than 230 Canadian companies that are listed on U.S. stock exchanges. (Among these are Canadian energy giants like Enbridge Inc., Suncor Energy Inc., Imperial Oil Ltd. and Canadian Natural Resources Ltd.)
Under the new proposal, companies would have to disclose their Scope One and Scope Two emissions (terms that encompass the greenhouse gases produced directly by a company’s operations, as well as indirectly through the generation of energy the company purchases such as electricity to power the business).
But they would also have to publicly account for their Scope Three emissions, meaning all the other greenhouse gases they produce indirectly, including emissions produced by customers when they use a company’s product.
In other words, for oil producers, Scope One and Two emissions are the emissions the company makes itself (the methane emitted directly from a well, for example, or the electricity an oilsands producer uses to power its massive facilities). Scope Three emissions are the emissions an oil company causes when it sells its product (when a driver burns gasoline in a car, for example).
“The moment we ask companies to report Scope Three, we’re now focusing on the carbon intensity of the product itself,” said Tima Bansal, Canada research chair in business sustainability at the University of Western Ontario’s Ivey Business School.”It’s not the carbon intensity of their process — which they can reduce and can reduce quite substantially — it’s the carbon intensity of their product.”
Industry emission reduction targets focus on Scope One and Two
Many Canadian energy producers have begun reporting their Scope One and Scope Two emissions in the years since the 2015 U.N. Paris agreement on climate change.
These numbers often form the basis of some of the industry’s own aggressive emissions reduction targets, such as Pathways to Net Zero — an alliance of the country’s biggest oilsands producers that have jointly set the goal of reaching net-zero carbon emissions by 2050.
The companies behind that initiative (Suncor, Cenovus, CNRL, Imperial, MEG Energy, and ConocoPhillips Canada) have laid out a road map to net-zero that includes the large-scale deployment of carbon capture and storage technology, and they’re asking for government support to help do it.
However, their plan only addresses Scope One and Two emissions. In fact, the oil and gas industry as whole has been very reluctant to talk about the emissions produced by the combustion of its product itself.
“Reporting Scope 3 emissions continues to be a challenge at this time and will prove difficult to provide in a timely manner, if at all,” wrote the Canadian Association of Petroleum Producers in a recent submission to the Canadian Securities Administrators. (The CSA is currently mulling its own set of proposed climate disclosure rules, though the Canadian version would allow companies to opt out of Scope 2 and 3 disclosures as long as they explain their reason for doing so.)
“We believe this (Scope 3 disclosure) would not only add additional burden to industry, but is also not practical in that upstream oil and gas producers don’t have knowledge or control over the end use of their sales products,” the industry lobby group wrote.
Company’s problem or consumer’s choice?
While only a very small minority of Canadian oil and gas firms are even attempting to report Scope 3 emissions right now, it’s already apparent that having to disclose these numbers would massively increase the size of the carbon footprint that companies must report to investors and the public.
For example, Cenovus Energy — which began disclosing its estimated Scope Three emissions in 2020 — says its Scope One and Two emissions in 2019 amounted to 23.94 million tonnes of C02. But Scope Three emissions, generated by the final use of the company’s products by customers, amounted to an estimated 113 million tonnes.
Duncan Kenyon, director of corporate engagement with climate change activist group Investors for Paris Compliance, said more than 80 per cent of emissions from fossil fuels fall under the umbrella of Scope Three — that is, they’re produced when the product is consumed.
“I hear it all the time from (oil companies), that Scope Three is ‘not our problem, it’s the consumers choice,’ ” Kenyon said. “But you can’t be a Paris-aligned, climate believer if you’re going to say that 80 per cent is someone else’s problem.”
“It also undermines the claims that `oh well, if we capture it all and put it underground, we’ll be OK for 2050,’ ” he added. “Because no, you won’t.”
Oil and gas companies have been returning major dividends to shareholders in the past year thanks to surging global energy demand, so it’s easy to question why investors would care about the Scope Three issue at all.
But Kenyon said ESG (environmental, social and governance) focused investors view climate change as a real business risk, and want to know how prepared a company is to adapt to what is coming. For example, an energy company actively working to reduce its Scope Three emissions would aim to increase the percentage of renewables in its portfolio.
“If you do bring in Scope Three disclosure, it becomes apparent really fast where your company is in the decarbonization game,” he said. “And then you have to decide what kind of a company you want to be in five years, 10 years or 25 years.”
In issuing the regulator’s proposal in March, SEC chair Gary Gensler said greenhouse gas emissions have become a commonly used metric to assess a company’s exposure to climate-related risks that are reasonably likely to have a material impact on its business.
“Investors get to decide which risks to take, as long as public companies provide full and fair disclosure and are truthful in those disclosures,” Gensler said in a news release. “Today, investors representing literally tens of trillions of dollars support climate-related disclosures because they recognize that climate risks can pose significant financial risks to companies, and investors need reliable information about climate risks to make informed investment decisions.”
VANCOUVER – Contract negotiations resume today in Vancouver in a labour dispute that has paralyzed container cargo shipping at British Columbia’s ports since Monday.
The BC Maritime Employers Association and International Longshore and Warehouse Union Local 514 are scheduled to meet for the next three days in mediated talks to try to break a deadlock in negotiations.
The union, which represents more than 700 longshore supervisors at ports, including Vancouver, Prince Rupert and Nanaimo, has been without a contract since March last year.
The latest talks come after employers locked out workers in response to what it said was “strike activity” by union members.
The start of the lockout was then followed by several days of no engagement between the two parties, prompting federal Labour Minister Steven MacKinnon to speak with leaders on both sides, asking them to restart talks.
MacKinnon had said that the talks were “progressing at an insufficient pace, indicating a concerning absence of urgency from the parties involved” — a sentiment echoed by several business groups across Canada.
In a joint letter, more than 100 organizations, including the Canadian Chamber of Commerce, Business Council of Canada and associations representing industries from automotive and fertilizer to retail and mining, urged the government to do whatever it takes to end the work stoppage.
“While we acknowledge efforts to continue with mediation, parties have not been able to come to a negotiated agreement,” the letter says. “So, the federal government must take decisive action, using every tool at its disposal to resolve this dispute and limit the damage caused by this disruption.
“We simply cannot afford to once again put Canadian businesses at risk, which in turn puts Canadian livelihoods at risk.”
In the meantime, the union says it has filed a complaint to the Canada Industrial Relations Board against the employers, alleging the association threatened to pull existing conditions out of the last contract in direct contact with its members.
“The BCMEA is trying to undermine the union by attempting to turn members against its democratically elected leadership and bargaining committee — despite the fact that the BCMEA knows full well we received a 96 per cent mandate to take job action if needed,” union president Frank Morena said in a statement.
The employers have responded by calling the complaint “another meritless claim,” adding the final offer to the union that includes a 19.2 per cent wage increase over a four-year term remains on the table.
“The final offer has been on the table for over a week and represents a fair and balanced proposal for employees, and if accepted would end this dispute,” the employers’ statement says. “The offer does not require any concessions from the union.”
The union says the offer does not address the key issue of staffing requirement at the terminals as the port introduces more automation to cargo loading and unloading, which could potentially require fewer workers to operate than older systems.
The Port of Vancouver is the largest in Canada and has seen a number of labour disruptions, including two instances involving the rail and grain storage sectors earlier this year.
A 13-day strike by another group of workers at the port last year resulted in the disruption of a significant amount of shipping and trade.
This report by The Canadian Press was first published Nov. 9, 2024.
The Royal Canadian Legion says a new partnership with e-commerce giant Amazon is helping boost its veterans’ fund, and will hopefully expand its donor base in the digital world.
Since the Oct. 25 launch of its Amazon.ca storefront, the legion says it has received nearly 10,000 orders for poppies.
Online shoppers can order lapel poppies on Amazon in exchange for donations or buy items such as “We Remember” lawn signs, Remembrance Day pins and other accessories, with all proceeds going to the legion’s Poppy Trust Fund for Canadian veterans and their families.
Nujma Bond, the legion’s national spokesperson, said the organization sees this move as keeping up with modern purchasing habits.
“As the world around us evolves we have been looking at different ways to distribute poppies and to make it easier for people to access them,” she said in an interview.
“This is definitely a way to reach a wider number of Canadians of all ages. And certainly younger Canadians are much more active on the web, on social media in general, so we’re also engaging in that way.”
Al Plume, a member of a legion branch in Trenton, Ont., said the online store can also help with outreach to veterans who are far from home.
“For veterans that are overseas and are away, (or) can’t get to a store they can order them online, it’s Amazon.” Plume said.
Plume spent 35 years in the military with the Royal Engineers, and retired eight years ago. He said making sure veterans are looked after is his passion.
“I’ve seen the struggles that our veterans have had with Veterans Affairs … and that’s why I got involved, with making sure that the people get to them and help the veterans with their paperwork.”
But the message about the Amazon storefront didn’t appear to reach all of the legion’s locations, with volunteers at Branch 179 on Vancouver’s Commercial Drive saying they hadn’t heard about the online push.
Holly Paddon, the branch’s poppy campaign co-ordinator and bartender, said the Amazon partnership never came up in meetings with other legion volunteers and officials.
“I work at the legion, I work with the Vancouver poppy office and I go to the meetings for the Vancouver poppy campaign — which includes all the legions in Vancouver — and not once has this been mentioned,” she said.
Paddon said the initiative is a great idea, but she would like to have known more about it.
The legion also sells a larger collection of items at poppystore.ca.
This report by The Canadian Press was first published Nov. 9, 2024.
