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Coalitions of Investors and Environmental Groups Call on Ontario Securities Commission to Improve Climate Risk Disclosure

New Study Reveals Low Levels of Disclosure by Canadian Corporations

October 14, 2009 – Using survey results to bolster their request, Canadian and U.S. networks of investors and environmental groups, and climate change lawyers, have asked the Ontario Securities Commission (OSC) to address poor rates of climate risk disclosure in securities filings.
TORONTO, ON Oct 14, 2009

Using survey results to bolster their request, Canadian and U.S. networks of investors and environmental groups, and climate change lawyers, have asked the Ontario Securities Commission (OSC) to address poor rates of climate risk disclosure in securities filings.

Today’s submission to the OSC includes a survey of disclosure in 2008 annual reports by 35 companies in 9 affected sectors. Conducted by the signatories, the survey found low levels of reporting on issues important to investors including total greenhouse gas emissions, financial risks assessments, and actions to mitigate risks. The signatories recommend that the OSC work with the Canadian Securities Administrators to improve disclosure on a national level of material climate risks and related corporate governance actions.

The request provides input to the OSC’s first-ever consultation into best practice on environmental, social and governance (ESG) reporting standards, mandated by the Ontario legislature in April of this year. The government called on the OSC, already a leader in recommending improved environmental disclosure by issuers, to “develop . . . an enhanced standardized reporting framework” for ESG information, and provide recommendations to the Minister of Finance by January 1, 2010 on implementing the framework.

“This submission sets out some very reasonable recommendations for how the OSC can better guide companies on their climate risk disclosure. The goal of the recommended guidance is to ensure that high quality and comparable information on the business implications of climate change is provided to investors so we can make more informed investment decisions,” said Susan Enefer, Manager of Shareholder Engagement at British Columbia Investment Management Corporation (bcIMC).

The signatories’ review of reporting by Canadian companies found rates of climate risk disclosure in OSC filings were weak or nonexistent among the 35 companies surveyed. Even in impacted sectors such as oil and gas and utilities, companies failed to provide the level of detail that investors require on the risks they face from climate change.

"Our survey sends a clear signal that the OSC should make better climate risk disclosure a key part of its review,” said Mindy Lubber, president of Ceres and director of the Investor Network on Climate Risk, comprised of 80 institutional investors managing over $7 trillion in assets. "Climate change is an increasingly important issue to investors worldwide. They need to know which companies are best positioned for the emerging clean energy economy."

“Existing reporting standards developed by investors provide the OSC a framework for issuing guidance,” said Graham Erion, an attorney with the Climate Change Lawyers Network, a signatory to the submission. “The Global Framework for Climate Risk Disclosure can help the OSC develop standardized guidance that provides a level playing field for public companies.”

“Climate change will affect major industrial sectors across Canada and our securities regulators need to ensure that companies in these sectors are made aware of the responsibility they have to the public to address this crisis in a transparent manner,” said Graham Saul, Executive Director of the Climate Action Network Canada. “Our member organizations are looking for leadership on this issue and the OSC has an important opportunity to move in the right direction.”

In addition to providing guidance based on the Global Framework, the submission also encourages the OSC to improve corporate governance disclosure of how companies are addressing their climate change risk at board and management levels. This level of accountability can help ensure that companies integrate climate risk management throughout their operations.

About Ceres
Ceres is a leading coalition of investors, environmental groups and other public interest organizations working with companies to address sustainability challenges such as global climate change. Ceres also directs the Investor Network on Climate Risk, a network of 80 institutional investors with collective assets totaling more than $8 trillion.>

About Climate Change Lawyers Network
The Climate Change Lawyers Network is a network of Canadian lawyers from the private, public, and non-profit sectors that seeks to further the development of Canadian law and policy in response to climate change and create opportunities for lawyers to engage in climate change issues in Canada and internationally.

About Climate Action Network Canada
Climate Action Network Canada - Réseau action climat Canada (CAN Canada - RAC Canada) is composed of member organizations committed to preventing dangerous levels of human interference with the global climate system, protecting environmental sustainability and public health, while upholding principles of just transition, equity and social justice.

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