Proposal calls on Enbridge to disclose indirect pipeline emissions
Energy giant Enbridge Inc. is urging shareholders at its upcoming annual meeting to vote against a proposal calling on the company to do more to disclose the climate impact of its pipeline business.
The shareholder proposal filed by Investors for Paris, a group that aims to hold publicly traded companies accountable for their net-zero promises, calls on Enbridge to disclose the “Scope 3” or end-use emissions produced by the oil and natural gas it transports in its pipeline network.
“If a company’s financial viability is dependent on Scope 3 emissions being released — as is the case with Enbridge — then it is critical that investors have a complete picture of these emissions,” the proposal states.
The term “Scope 3” refers to emissions that a company is indirectly responsible for, such as the greenhouse gases generated when a customer uses the company’s product.
Most major Canadian energy firms currently disclose the emissions they produce themselves in their day-to-day business operations, but have been far more reluctant to take accountability for end-use emissions, such as those produced when consumers burn fossil fuels in their cars.
Including Scope 3 emissions in their climate disclosures would massively increase the size of the carbon footprint that energy companies must report to investors and the public.
Enbridge itself currently discloses the Scope 3 emissions produced by its natural gas utility business, by tallying the emissions generated when customers burn natural gas to heat their homes.
But it doesn’t provide an accounting of the end use of the fossil fuel products it transports in its pipeline business.
Duncan Kenyon, director of corporate engagement with Investors for Paris, said that’s a problem because shareholders need to know whether the company’s portfolio is aligned with a future that will increasingly depend on renewables and other forms of clean energy.
“Many shareholders actually understand that Scope 3 isn’t just a greenhouse gas reporting metric, it’s actually a trend metric showing where the company is going in terms of adopting and responding to the energy transition,” Kenyon said.
“It’s a metric that highlights the exposure risk of the company to energy transition.”
Scope 3 emissions are an increasing area of focus for shareholder proposals. In the past two years, according to a database by Ceres, an organization that tracks climate-related shareholder resolutions, more than 30 proposals related to Scope 3 disclosures have been brought forward at the general meetings of major North American publicly traded companies.
Investors for Paris brought a similar resolution to Enbridge’s annual meeting last year, at which time about 25% of shareholders voted in favour of the company adopting more extensive Scope 3 disclosure practices.