Canadian Investor Statement on Climate Change by Jarislowsky Fraser OCTOBER 25 2021 Canadian Investors Representing $5.2 Trillion Send an Unprecedented Call for Increased Climate Accountability in the Corporate Sector Toronto, ON – October 25, 2021 – Citing their fiduciary responsibility, 35 institutional investors managing more than $5.2 trillion in assets have signed a new Canadian Investor Statement on Climate Change. The Statement, signed by the asset management divisions of four of Canada’s largest banks along with major institutional investors such as the Ontario Pension Board, calls on companies to act on material climate risks including through their industry association and lobbying activities. Coordinated by the Responsible Investment Association (RIA), the Statement also makes clear the actions major Canadian investors will take to advance the global pursuit of net zero ahead of the most important climate gathering in history – COP26. This includes disclosing their financed emissions and setting an expectation that their investees will establish emissions targets and report on their progress. “By centering reconciliation and a just transition, this statement adds a Canadian perspective that is missing from the global conversation,” says Dustyn Lanz, RIA CEO. “The signatories recognize that Canada’s path to net zero depends on a transition that leaves no one behind and supports the transformation of every sector, while aligning itself with Indigenous rights for self-determination.” RIA worked closely with the Reconciliation and Responsible Investment Initiative (RRII) in the development of the Statement to ensure Indigenous perspectives are incorporated into the Statement. “Despite Indigenous Peoples often being the first and most affected by the climate crisis, Indigenous perspectives and voices are often left out of investors’ decision-making on climate action,” says Mark Sevestre, Founding Member of NATOA. “This raises the stakes of the transition to a low carbon economy for Indigenous Peoples. For the transition to be just in Canada, Indigenous Peoples’ rights and perspectives need to be centred and prioritized.” Like their counterparts across the world, Canadian investors are also sending an unequivocal message to companies and governments that disclosure is key to maintaining and growing private investment in the low-carbon transition of our industries. “For the investment community, clear, comprehensive, comparable data isn’t a nice to have, it’s a must,” says Lanz. “Ultimately, this is an invitation from Canadian investors to Canadian businesses to navigate this transition together,” explains Lanz. “The investment community is stepping up its game, so that the business community steps up theirs.” The Statement remains open to additional investor signatories and Lanz expects this list will continue to grow as we approach a “tipping point” for sustainable finance momentum in Canada. For complete details, please visit RIA Canada website. Canadian Investor Statement on Climate Change We, the undersigned institutional investors, recognize that climate change presents a major threat to long-term growth and prosperity, and that there is an urgent need to accelerate the transition towards a net-zero economy. The Intergovernmental Panel on Climate Change (IPCC) has reported that, in order to avoid catastrophic impacts from climate change, we must limit the average global temperature rise to no more than 1.5°C above the preindustrial era. To achieve this target, global carbon emissions must decline by approximately 45% relative to 2010 levels by 2030, and reach net zero around 2050. Consequently, Canada has committed to achieve net-zero emissions by 2050, and aims to reduce emissions by 40 to 45% relative to 2005 levels by 2030. Within this context, we support the goal of achieving net-zero emissions by 2050 as well as the broader goal of keeping planetary warming to no more than 1.5°C. As stewards of capital, we have a fiduciary responsibility to consider all material factors that may impact the risk-adjusted returns of our investments, including climate-related financial risks and opportunities. The value of financial assets could be impacted by the physical effects of climate change – known as physical risks, and by an adjustment toward a net-zero economy – known as transition risks. While climate change poses a systemic and unprecedented risk to the global economy, the impacts on specific markets, regions, communities, and investments are complex, dynamic, and uncertain. The complexity and uncertainty of climate-related risks points to the importance of clear, comprehensive, and high-quality data on how issuers are addressing climate change. We therefore support robust climate-related financial disclosures in alignment with the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD). We recognize that a transition to a net-zero economy will involve a major transformation of sectors and industries. We encourage all companies and stakeholders to facilitate a just transition that does not leave workers or communities behind. We also recognize that the financing required for transition activities and climate solutions presents an investment opportunity. We further recognize that Indigenous Peoples have managed collective wealth for millennia – including lands, waters, and resources – with a strong sense of stewardship and consideration for future generations. Indigenous Peoples have faced disproportionate burdens and adverse impacts of economic and political transitions throughout Canada’s history. We support a transition to a net-zero economy informed by Indigenous perspectives, that supports Indigenous economic opportunities, and encourages business practices that align with the principles of the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP). This Statement identifies the actions we, as Canadian institutional investors, are taking to support the transition to a net-zero economy. In this context, my institution commits to the following actions. With due regard to the materiality of climate change risks and opportunities to their business, we expect investees to: Establish robust board and management oversight of climate-related risks, opportunities, strategies, and performance to support the company’s reduction of emissions. Establish long-term and interim greenhouse gas (GHG) emissions reduction targets that are based on climate science and are aligned with the ambition of achieving net-zero emissions by 2050 or sooner. Collaborate and consult with stakeholders to identify opportunities that support the transition to net zero and mitigate the potential negative impacts of a transition to net zero on workers, communities and Indigenous Peoples. Provide annual disclosures that align with the recommendations of the TCFD, including disclosures of emissions data, detailed transition plans, and progress against stated GHG emissions reduction targets. Ensure that lobbying activities and industry association memberships are aligned with a just transition and the ambition of achieving global net-zero emissions by 2050 or sooner. As institutional investors, we will take the following actions to support the goal of achieving global net-zero emissions by 2050 or sooner: Integrate climate-related risks and opportunities into our investment processes. Develop a climate action plan that details the actions we are taking to support the global goal of achieving net-zero emissions by 2050 or sooner. Implement a stewardship and engagement strategy to advance our expectations of investees described in this Statement. Ensure that any climate-related policy advocacy we undertake supports a just transition and the ambition of achieving global net-zero emissions by 2050 or sooner, and engage with our industry associations to encourage climate advocacy efforts that are consistent with these goals. Finally, provide annual disclosures that align with the recommendations of the TCFD to report on our progress. This includes best-efforts reporting on our financed emissions. We recognize that expectations, frameworks, standards, and methodologies related to climate change continue to evolve. We are committed to reviewing and monitoring climate science, technologies, frameworks, standards, methodologies and policies to ensure that we remain aligned with best practices. Where possible, we will work together and with our investees to standardize climate-related disclosures and to promote a common and consistent understanding of climate-related data and best practices. We invite other institutional investors to join us and share experiences and best practices to support the goal of achieving a just transition to global net-zero emissions by 2050 or sooner. About Institutional Private Wealth Global Research News & Insights Contact Client Portal Careers Privacy & Legal Accessibility CONTACT US © 2021 Jarislowsky, Fraser Limited. Canada - English Canada - Français United States - English International - English International - Español