Climate Engagement Canada’s Net Zero Benchmark will assess Canadian corporate issuers on their progress against climate goals, driving alignment with the Paris agreement.
TORONTO | Traditional territories of the Mississaugas of the Credit, the Anishinaabeg, the Haudenosaunee, and the Huron-Wendat – Climate Engagement Canada (CEC), an investor-led collaborative engagement initiative, has announced its Net Zero Benchmark Criteria. The Benchmark will serve as a tool to support the “Just Transition” among Canada’s corporate issuers towards a Net Zero economy by standardizing expectations from the financial community.
The CEC Net Zero Benchmark provides a set of common standards for investors to evaluate corporate issuers’ progress towards aligning with the Paris Agreement’s ambition: limiting global warming to well below 2 degrees Celsius, while pursuing efforts to limit the increase to 1.5 degrees. The Benchmark allows CEC Participant Investors to frame, and soon measure, their engagements with Canada’s top emitters, inclusive of corporate issuers. With this framework in place, Participant Investors can identify areas for discussion with CEC Focus List companies and identify areas for additional improvement in their Net Zero transition.
“With the Net Zero Benchmark, CEC continues to push the standard for collaborative stakeholder engagement. The Benchmark will provide participating investors with a collective view of key engagement developments and themes in the Canadian context, which helps inform focused and consistent dialogue between Canadian companies and investors,” said Barbara Zvan, President & CEO, UPP, and CEC Steering Committee Chair. “It is a much-needed tool along the path towards a Net Zero economy.”
“Think of this as the Google Maps for the Canadian climate transition,” said Kevin Thomas, CEO of SHARE. “Rigorously tracking our collective progress along this route is how we make sure we all get to our destination. It keeps us honest and it keeps us effective.”
“The current climate trajectory presents a systemic risk to investment portfolios and long-term returns to pension fund beneficiaries. Investors are intensifying their engagement with companies, calling for near-term action from the companies they are invested in,” said Karen Lockridge, Director of ESG Investing at Canada Post Pension Plan, and CEC Technical Committee Chair. “The CEC Net Zero Benchmark will be a valuable tool for companies to understand investor expectations. It guides transparency around credible net zero emissions strategies and can support constructive dialogue between companies and investors.”
“The CEC Net Zero Benchmark is a crucial step on the path towards a Net Zero economy in Canada, providing corporate issuers with a clear and consistent framework to identify opportunities for climate action,” said Patricia Fletcher, CEO of Canada’s Responsible Investment Association. “The Benchmark will underpin the conversations between investors and large corporate emitters as they work to measure and advance decarbonization across key sectors in Canada’s economy.”
“As a founding signatory to the CEC initiative and fiduciaries of our clients’ assets, RBC Global Asset Management recognizes the importance of the global goal of achieving net-zero emissions by 2050 or sooner in order to mitigate climate-related risks,” said Maia Becker, Senior Director, Corporate Governance and Responsible Investment, RBC Global Asset Management, and CEC Technical Committee Vice Chair. “We believe the CEC Net Zero Benchmark will be an important tool for investors to advance dialogue and develop a consistent framework when engaging with Canadian corporate issuers on the actions they are taking to address climate change.”
The CEC Net Zero Benchmark is closely aligned with the Benchmark developed by Climate Action 100+, the current global standard for collaborative shareholder engagement. The CEC Net Zero Benchmark follows this example whilst layering in additional context specific to Canada’s unique economy, developed with the expertise of the CEC Technical Committee and SHARE. It was further refined by incorporating feedback from a public consultation period, which involved CEC Participant Investors—including some of Canada’s largest asset managers and asset owners—NGOs, and Indigenous representation.
In the fall, investors can expect to see evaluations of all CEC Focus List companies based on the CEC Net Zero Benchmark, highlighting areas of strength and areas for further improvement. This will help define objectives for future climate engagements.
About Climate Engagement Canada (CEC)
Climate Engagement Canada (CEC) is a finance-led initiative that drives dialogue between the financial community and corporate issuers to promote a just transition to a Net Zero economy – to the benefit of investors, companies, employees, and consumers. CEC is coordinated by its Joint Secretariat: the Responsible Investment Association (RIA) and the Shareholder Association for Research and Education (SHARE). The initiative is also supported by international investor networks, the UN Principles for Responsible Investment (UNPRI) and Ceres.