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Introducing the Morningstar Sustainalytics Low-Carbon Transition Rating, a guide to understanding how Canadian companies are managing the shift to a net-zero future

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Illustration by Dushan Milic/The Globe and Mail

What is TCFD?

The Taskforce on Climate-related Financial Disclosures is the gold standard for climate-related risk reporting, created by the Financial Stability Board to help investors, lenders, underwriters and other stakeholders assess the risks and financial impacts of climate change.

The disclosures—around governance, strategy, risk management and metrics—have been embraced by governments and were incorporated into the International Financial Reporting Standards’ International Sustainability Standards Board (ISSB) framework for reporting on climate risk.

What’s an internal carbon price?

That’s the price of emissions businesses and other organizations use to weigh options, and it’s key to ensuring that future carbon costs are considered when making investments and operating decisions. It will also serve to discourage putting capital into high-carbon ventures. Companies are less likely to invest in highly carbon-intensive activities when the carbon price is fully accounted for.

Ranking 30 Canadian companies on the Road to Net Zero

Canada’s financial sector is lagging when it comes to real climate action. How do we catch up before it’s too late?

Scotiabank: 73.2

Bank (Toronto)

Best practices: Scotiabank BNS-T is seen as a leader in managing risk, using comprehensive target setting and scenario analysis—predicting how its business will fare under a range of climate-related regulatory, policy and economic changes. Its actions are aligned with a 1.7°C temperature rise, which is above the most ambitious target under the Paris Agreement, but close. It also employs a well-defined internal carbon pricing system, which will help assess future costs and opportunities. The bank has committed to following TCFD standards, achieving full reporting within the framework, and it links sustainability factors to executive pay. Scotiabank also has a program to help clients set and achieve emission reduction targets, key to cutting its Scope 3 emissions—those stemming from companies it finances.

Needs improvement: The bank is exposed to sizeable risks from the high-emitting businesses of some of its clients, which could leave it vulnerable to future economic and policy shifts as carbon gets drained from the economy. Meanwhile, it should take steps to further integrate climate issues into its overall strategy.

From the company: “Scotiabank is here to support our clients in the transition to a low-carbon economy. Through our voluntary reporting, we strive to provide insight into the bank’s approach to addressing climate change, including our efforts to reduce our own emissions, and how we are helping our clients as they navigate climate-related challenges, risks and opportunities.”

— Meigan Terry, chief sustainability, social impact and communications officer

CP Rail: 69.8

Rail transport (Montreal)

Best practices: The result of a merger completed last year between Canadian Pacific and Kansas City Southern, CPKC CP-T has set new targets since Sustainalytics assessed its disclosures last year. The railway aims to reduce emissions from its locomotives (per gross ton-mile) by nearly 37% by 2030, as compared to 2020. Sustainalytics praised CP for aligning its emissions targets with the Business Ambition for 1.5°C campaign of the Science Based Targets Initiative.

Needs improvement: CP has only set targets to reduce its Scope 1 and 2 emissions, and the company hasn’t revealed details about how it incorporates low-carbon innovations into its operational processes.

From the company: CPKC points to a program introduced in 2022 to retrofit freight locomotives with hydrogen fuel cells and batteries. Two locomotives have been transformed to date and are being tested out of Calgary—including in temperatures below -40°C. CPKC has also begun installing hydrogen production and fuelling facilities—part of its efforts to test their operational performance.

BCE Inc.: 69.5

Telecom (Toronto)

Best practices: BCE BCE-T follows best practices in setting climate targets by covering all scopes of emissions and aligning its targets to the 1.5°C pathway. The company has relatively strong performance in achieving its targets, has set a specific target aimed at reducing supply-chain emissions, and actively discloses pertinent upstream Scope 3 emissions. BCE’s board has committed to reducing emissions within the supply chain, and its policy explicitly addresses and outlines measures for targeting, monitoring and measuring supply chain emissions. Finally, the remuneration structure for the CEO and board is tied to emissions reductions and broader climate-related targets. Specifically, a segment of the short-term incentives for its top executives, including the chief executive, is directly linked to hitting ESG objectives, particularly such environmental goals as reducing waste and achieving a lower carbon footprint.

Needs improvement: BCE hasn’t defined an internal carbon price or doesn’t disclose the price it uses. It has also not disclosed its affiliation with an organization or group of companies advocating for science-based climate policy. Additionally, there is no disclosure regarding BCE explicitly expressing support for pro-climate policy.

From the company: “BCE welcomes the increased demand for transparency regarding our climate-related risks and opportunities. We take seriously our responsibility to disclose our performance and initiatives. BCE linked remuneration for the CEO and board to its ESG objectives to ensure those objectives are embedded into the overall strategy. We are exploring internal carbon pricing. We are members of the Business Ambition for 1.5°C campaign, and we also supported the Action Declaration on Climate Policy Engagement at COP27.”

Power Corp. of Canada: 66.5

Financial (Montreal)

Best practices: Power Corp. POW-T has pledged support for TCFD, as have its three subsidiaries: Great-West Lifeco, IGM Financial (which also appears on this list) and Groupe Bruxelles Lambert. The conglomerate is using six scenarios within the framework set out by the Network for Greening the Financial System. The NGFS scenarios help central banks, supervisors and other financial players explore various potential outcomes of climate change and the transition to low-carbon energy, from orderly to disorderly to “hot house,” or well above a 2°C threshold. Power discloses its process for identifying and managing risks, and says none significantly impacts its business strategy, financial planning or resource allocation.

Needs improvement: Power has not disclosed information about its low-carbon transition investments or green bonds and loans, and these investments are seen as key to a 1.5°C and net-zero pathway. In addition, it has not disclosed fossil fuel investment management. Financial institutions that invest in high-emitting companies have the power, with investments in emitting companies, to demand decarbonization. Simultaneously, climate-focused institutions drive the momentum for further decarbonization.

From the company: “While at the holding company level our environmental footprint is very limited, and we do not invest in companies involved in fossil fuels, our publicly traded operating companies are active participants in the global climate transition movement. They are investing significant resources toward meeting their climate ambitions, which include, as applicable, net zero commitments for operations and investments, science-based targets, and participation in the Net Zero Asset Management initiative.”

—Stéphane Lemay, vice-president, general counsel and ESG lead

Manulife Financial: 66.2

Insurance (Toronto)

Best practices: Manulife MFC-T has been a supporter of the TCFD since 2017 and has disclosed comprehensive data as per recommendations. In 2021, it committed to Business Ambition for 1.5°C, a global initiative led by the Science Based Targets Initiative, along with the UN Global Compact and We Mean Business Coalition. Due to the company’s vast holdings of forests globally, Manulife says its operations are net zero, and it has committed to reducing absolute Scope 1 and 2 emissions by 40% by 2035.

Needs improvement: Manulife hasn’t reported on the Low-Carbon Transition Resilience Program, and has not provided disclosure about the scenario analysis through which the company explores the potential range of low-carbon transition risks, opportunities and implications. This analysis serves as an important tool for financial institutions to reduce transition risk in their investments and support the transition to a low-carbon economy.

From the company: “As the world’s largest investor in natural capital, 100% of our global forests continue to achieve third-party sustainability certifications for the way we address biodiversity, water access and quality, forest health and conservation value, and Indigenous people’s rights to training and education.”

—Sarah Chapman, global chief sustainability officer

Bank of Montreal: 65.8

Bank (Toronto)

Best practices: BMO BMO-T has committed to a net zero target that includes all emissions scopes, disclosing both absolute and intensity-based emission-reduction goals. This shows transparency in emissions accounting. The bank’s program aligns with a 1.8°C increase in global temperatures. It has strong adherence to the TCFD framework, with an 86% sufficiency score. Governance is rated as robust. The bank links sustainability to executive pay, and it takes into account ESG factors in investment decisions. Importantly, BMO is transparent with its policy and government lobbying activities.

Needs improvement: BMO has yet to report on its internal carbon price projections and low-carbon lending, especially for renewable energy projects and for small and mid-size business. It should compare these disclosures to industry benchmarks.

From the company: “We are pleased that BMO’s strong climate-related management approach was recognized in the Sustainalytics analysis. We will continue to play our part to support our clients and manage climate risks, as part of our climate ambition to be our clients’ lead partner in the transition to a net zero world.”

—Michael Torrance, chief sustainability officer

TD Bank: 64

Bank (Toronto)

Best practices: TD TD-T has implemented detailed policies and standards tailored to its credit and loan business, which shows a sophisticated approach to risk management. It has also set a holistic net zero target, including all emissions scopes, using both absolute and intensity-based reduction metrics. The bank has shown a commitment to TCFD standards and employs qualitative scenario analysis to explore how a range of low-carbon transition risks and opportunities would affect its long-term business prospects. It assists fossil fuel producers and companies that are big greenhouse-gas emitters making the transition to lower-emitting operations, and it links sustainability targets to executive compensation.

Needs improvement: There’s room for TD to bolster its board and management oversight of climate-related issues. It could also integrate climate factors more fully into overall strategy.

From the company: “As outlined in our climate action plan, we are focused on supporting our clients to help them meet the needs of today while building the resilience to succeed in the economy of tomorrow. We reference a variety of industry benchmarks and guidelines, as well as our own analysis, as we seek to further integrate sustainability considerations across the bank, striving to enhance our reporting as per industry standards.”

—Janice Farrell Jones, senior vice-president, sustainability and corporate citizenship

IGM Financial: 63.7

Wealth and asset management (Winnipeg)

Best practices: IGM IGM-T has been a supporter of the TCFD since 2019 and has been implementing its disclosure recommendations over the past several years. Since 2013, it has been reporting to CDP, the global not-for-profit formerly known as the Carbon Disclosure Project. IGM also measures and reports Scope 1, 2 and 3 emissions. The company has set Scope 1 and 2 targets to reduce emissions by 100% by 2030, from a 2013 baseline.

Needs improvement: IGM has not yet defined an internal carbon price or disclosed the price it uses, and has reported via CDP that it does not anticipate doing so within the next two years.

From the company: IGM’s senior vice-president of enterprise sustainability and financial risk, Andrea Carlson says the company has a “longstanding” commitment to responsible management and sustainability. For example, its asset and wealth divisions, Mackenzie Investments and IG Wealth Management, both follow the Principles for Responsible Investment and have launched several climate-focused products, such as its Greenchip funds and IG Climate Action Portfolios. Carlson says Mackenzie is also a signatory to the Net Zero Asset Managers initiative and has committed to manage 24% of assets under management in line with net zero, and has a target to increase the amount of committed assets with validated science-based targets to 50% by 2030.

TransAlta Corp.: 63.2

Electricity power generator (Calgary)

Best practices: GHG risk management is overseen at the highest level—by the president and CEO, and the board of directors. And the executive team reviews and reports on climate-related issues and targets each quarter. TransAlta’s TA-T various business units also collaborate closely to figure out climate-related risks and opportunities. TransAlta’s reporting on its climate change management has been guided by the TCFD recommendations since 2018, which helps facilitate discussions and provide context on how climate change affects its business.

Needs improvement: TransAlta has not yet defined an internal carbon price or disclosed the price it uses, which is crucial to ensuring it avoids investing in highly carbon-intensive activities. Additionally, the company hasn’t disclosed information on carbon offsetting, which should only be used as a final step in a carbon-reduction strategy to mitigate residual emissions.

From the company: “It is accurate to say that TransAlta has not yet disclosed an internal carbon price. However, we have undertaken scenario analysis that included a net-zero-by-2050 scenario, which contemplated a carbon price of US$205/tonne CO2e. We will assess deployment of nature-based or engineered solutions to neutralize unabated gas-fired generation where appropriate. Additionally, we will neutralize residual emissions from gas-fired generation through fuel switching, new technologies or nature-based solutions as part of our transition plan.”

National Bank of Canada: 62.8

Bank (Montreal)

Best practices: National Bank NA-T taps into the knowledge of internal and external experts to understand how its business model will be transformed by climate-related factors. Some of its board members and senior executives are among those with climate expertise. The bank set a goal to reduce its carbon footprint annually, with an interim target of cutting all emission scopes by 25% by 2025 from 2019 levels. This is an absolute, science-based target that aligns with a 1.5°C warming limit, rather than an intensity-based target. The distinction is important, as intensity targets can have a lower overall impact if revenues, or other economic units the reductions are measured against, climb at a faster rate than greenhouse gases fall. National Bank has been a TCFD supporter since 2018 and is implementing its recommendations.

Needs Improvement: The bank has yet to set an internal carbon price and has reported to CDP that it may not do so in the next two years.

Stantec: 62

Engineering services (Edmonton)

Best practices: Stantec STN-T has established a goal of reducing its Scope 1 and 2 emissions by 47% by 2030, and its Scope 3 business-travel emissions by the same amount, through a combination of cutting its real estate footprint, purchasing renewable energy, investing in sustainable aviation fuel and reducing travel. It has linked climate-related assessments to its CEO’s short-term incentive scorecard, recently establishing objectives linked to 1.5°C targets, carbon-neutral commitments and net-zero pledges. At the board level, the company ties ESG objectives to compensation, and ties them to annual career development and bonuses. The company’s annual sustainability report is compliant with TCFD reporting standards.

Needs improvement: Stantec isn’t currently using a carbon price but expects to use one within two years.

Sun Life Financial: 61.4

Insurance (Toronto)

Best practices: Sun Life SLF-T has set a goal to reduce absolute GHG emissions from its operations by 50% by 2030, from a 2019 baseline, largely by reducing emissions from its offices and corporate travel. It also has a medium- to long-term target to reduce emissions in its global real estate portfolio by 30% by 2030, as compared to 2014 levels. Sun Life has supported the TCFD since 2018, and over the past three years has consistently published disclosures based on TCFD recommendations. Last year, Sun Life’s board approved the addition of sustainability performance goals for senior executive leadership, including goals relating to sustainable investing and emissions reduction in Sun Life’s operations.

Needs improvement: It has yet to define an internal carbon price or disclose the price it uses.

The company says: “While we have made progress, we continue to challenge ourselves to do better....We’ve been working diligently to make progress. This includes educating our board, leaders and employees on climate change, and in alignment with regulatory expectations and our sustainability strategy, working on our sustainable investing objectives and development of our climate transition plan.”

—Alanna Boyd, chief sustainability officer

Emera Inc.: 61.2

Electric and natural gas utilities, gas pipelines (Halifax)

Best practices: Emera EMA-T is involved in the GHG performance incentive plan, adopting a scorecard approach to translate corporate strategies into measurable goals. Senior management also participates in a long-term incentive program. Emera’s strategy focuses on safely delivering cleaner, affordable and reliable energy to its customers. The Halifax-based utility is aligned with the TCFD framework and continues to enhance climate disclosures.

Needs improvement: Emera has not defined an internal carbon price and does not disclose the price it uses. The company has not disclosed information on low-carbon innovation.

The company says: “Our focus on sustainability reinforces our strategy and demonstrates the values we live by across Emera. We continue working toward our vision to achieve net-zero CO2 emissions by 2050 and we’re committed to continual improvement in all of our sustainability priority areas.”

—Bruce Marchand, chief risk and sustainability officer

CN Rail: 61.1

Rail transport (Montreal)

Best practices: CN CNR-T separately reports its Scope 1, 2 and 3 emissions, and sets explicit targets for all three: a 43% reduction in emissions intensity for Scope 1 and 2, and a 40% reduction for Scope 3, by 2030 compared to 2019 levels. CN’s reporting claims the railway had already achieved nearly one-fifth of its target by 2022, in part through purchasing the most fuel-efficient locomotives available; Sustainalytics said CN “demonstrates notable efficacy” in attaining its targets. The railway is working with partners like Chevron to test new renewable fuels including “up to 100% bio-based diesel fuel” to lower emissions. A key question is how such biofuels perform in cold weather.

Needs improvement: CN hasn’t disclosed a dedicated program for reducing emissions in its supply chain—nor has it revealed a target for its supply chain, period. And its work on biofuels notwithstanding, Sustainalytics also criticizes the company for not revealing details “about the incorporation of low-carbon innovations in its operational processes.”

The company says: “In our sustainability report published in December 2023, we highlight our phased approach to decarbonize our activities. Our public targets commit us to reduce our fuel-and-energy-related activities, our largest share of Scope 3 emissions, by 40% by 2030 from a 2019 baseline, and net zero by 2050.”

Royal Bank of Canada: 59.4

Bank (Toronto)

Best practices: RBC RY-T approved a GHG performance incentive plan, tying CEO and group executive compensation to environmental sustainability, social and governance practices. In 2023, it instituted incentive programs for meeting medium- and long-term climate-related objectives. In 2020, it established two key goals: reducing absolute emissions by 70% from 2018 and increasing the sourcing of electricity from renewable and non-emitting sources to 100%, both targeted for 2025. The bank aims to achieve net zero in its lending by 2050.

Needs improvement: Despite that vow, Canada’s largest bank has yet to disclose its fossil-fuel investment management. It has been a target of environmentalists, who hold RBC up as one of the largest funders of oil and gas companies worldwide. The bank counters by saying it will have a greater impact by working with its high-emitting clients to decarbonize. RBC also hasn’t defined an internal carbon price or disclosed the price it uses.

Gildan Activewear: 59

Clothing manufacture (Montreal)

Best practices: Despite a current battle between directors and investors over who should lead the company, Gildan GIL-T rates highly in a number of climate-related areas, including emissions reduction and improvements in manufacturing processes. It has set a target of reducing Scope 1 and 2 emissions by 30% from 2018 levels by 2030, and Scope 3 emissions by 13.5% in the same time frame. The Scope 1 and 2 targets put Gildan on a path to an average temperature increase of less than 2°C. The company uses its waste as biomass energy and also recovers waste heat for use in its boilers. It has a performance incentive plan that is partly linked to ESG, including emissions reduction targets.

Needs improvement: The company has not disclosed information on a positive engagement program for policymakers or membership in any organizations that advocate for science-based climate policy. In addition, Gildan has not disclosed an internal carbon price.

The company says: “Gildan is committed to using energy efficiency initiatives to minimize our greenhouse gas emissions whenever and wherever possible. That’s why we work to increase energy efficiency across our operations by reducing our reliance on fossil fuels and favouring more sustainable alternative energy sources and production processes.”

Telus Corp.: 58.8

Telecom (Vancouver)

Best practices: Telus T-T has set climate targets by covering all scopes of emissions and aligning its targets to the 1.5°C pathway, with “relatively strong performance” in hitting those targets. It has also established distinct targets for emissions within its value chain, which highlights its commitment to addressing its environmental impact and fostering sustainability across its operations.

Needs improvement: Telus has either not yet defined an internal carbon price or doesn’t disclose the price it uses. Telus also hasn’t revealed details about how it incorporates low-carbon innovations into its operational processes, which signals a commitment to reducing emissions and embracing environmentally sustainable practices.

The company says: “We are incredibly proud to have reduced our absolute Scope 1 and 2 emissions by 46% since 2010. Having exceeded our 2020 targets in 2019, we set new, ambitious targets to have carbon-neutral operations by 2030, and we were the first national telecom in Canada to set science-based targets for our Scope 1, 2 and 3 emissions. We incorporate the price of carbon into our planning and decision-making processes in several ways. This includes consideration for the real price on carbon pollution in Canada in our capital expenditure decision making—$65 per ton of CO2e in 2023, increasing to $170 in 2030....And we are continuously working to identify and implement low-carbon innovations into our operational processes, including energy management programs; investing in LED retrofits and innovative lighting technologies; enabling new solar and wind power facilities; working toward a lower-carbon fleet; working toward decarbonizing our building heating systems; and annual operational programs to create energy efficiency.”

Loblaw Cos. Ltd.: 58.7

Retailer (Toronto)

Best practices: Canada’s largest grocer L-T has set a GHG emissions reduction target of 50% of Scope 1 emissions by 2030, net zero on Scope 1 and 2 emissions by 2040, and net zero on Scope 3 emissions by 2050. It has partnered with a biogas company to repurpose food waste to generate electricity. It has also launched a product line that eliminated synthetic fertilizers in its agricultural processes. And its incentive plan for executives and board members is partly tied to fighting climate change.

Needs improvement: Loblaw has not disclosed information about whether it plans to use internal carbon pricing. Sustainalytics also noted that the company has not provided details on its use of green bonds or loans.

The company says: “We incorporate ESG impacts (both positive and negative) into strategic and capital decision-making and continue to evaluate whether there is a need for a formal internal carbon pricing model. We continue to define our approach with respect to green financing.”

CIBC: 57.9

Bank (Toronto)

Best practices: CIBC CM-T has a comprehensive net-zero target that includes all three emission scopes, and a program that helps client corporations shift to cleaner energy. It regularly reviews its clients’ performance in shifting to lower-carbon operations. The paycheques of the CEO and some board members are tied to meeting emissions cuts and other climate goals through bonuses and other incentives. CIBC aligns fully with the key tenets of the TCFD, and the bank’s risk-management committee oversees climate-related concerns. The bank is shooting for net zero by 2050 for operational and financing activities, and is targeting low-emissions technologies and services in its corporate finance business. It has also made strides in its power-generation lending portfolio, where 34% is zero-emission or renewable.

Needs Improvement: The bank has yet to disclose its carbon pricing and low-carbon lending data, concentrating on the share dedicated to renewable energy and other emissions-free projects. It also needs to report on transition financing for small and mid-size enterprises and compare this data to industry benchmarks.

The company says: “We are continuing to integrate climate change considerations into our business activities. Communicating openly and regularly is important, and we’re committed to advancing our reporting and measurement of our progress in supporting the transition to a low-carbon future.”

—Tom Wallis, Senior Director, Public Affairs

Thomson Reuters: 57.7

News and data services (Toronto)

Best practices: Thomson Reuters TRI-T made good progress on setting GHG emissions targets. The data and software provider joined the Science-Based Targets initiative in 2020, committing to reduce its Scope 1 and 2 emissions by 50% by 2030, from baseline levels set in 2018. The company set a target to reduce absolute Scope 3 emission—considered tougher to meet than intensity-based targets—from fuel and energy-related activities, business travel and employee commuting by 25%, compared with 2019. And it compiled its first TCFD analysis and report in 2022.

Needs improvement: The company has not yet defined an internal carbon price or specified the price it uses, and it hasn’t disclosed information on low-carbon innovations that could help mitigate residual emissions through offsetting activities.

The company says: “Thomson Reuters is committed to environmental stewardship, and we are continuing to align our long-term plans and actions with science-based targets. The path towards net zero is one that we as a company will walk until completion.”

—Kate Friedrich, VP, government affairs and ESG

Restaurant Brands International: 57.4

Food service (Toronto)

Best practices: The parent company QSR-T of Tim Hortons and other fast-food chains such as Burger King, Popeyes and Firehouse Subs has set a 50% reduction target for GHG emissions by 2030, and net zero by 2050. The company has also established a “green procurement policy” to choose suppliers whose products or services have a lower environmental impact. And RBI has a long-term commitment to source palm oil that does not contribute to deforestation.

Needs improvement: RBI has not disclosed information on low-carbon-transition investments or on green bonds or loans.

The company says: “On low-carbon investments, we continue to make progress on fleet electrification, including our announcement in December of our first electric transport trucks at Tim Hortons.” Tim Hortons adds it’s aiming to replace at least 72% of its corporate truck fleet with EVs by 2030.

Celestica: 57.3

Electronics manufacturing (Toronto)

Best practices: Celestica CLS-T has linked executive pay to climate goals, including tying its CEO’s short-term incentive plan to environmental targets. It has also demonstrated robust governance in its climate transition efforts, with accountability measures including committees, working groups and task forces. The company has committed to reducing absolute Scope 1 and 2 emissions 30% by 2025 from a 2018 base year, and certain Scope 3 emissions by 10%. The company says it uses 58% renewable energy as part of its total energy consumption, and that four of its facilities already derive all their energy from renewable sources.

Needs improvement: Celestica has yet to define an internal carbon price or does not disclose the price it uses, though it has expressed an intention to establish one within the next two years. It also has not yet provided details about its use of green bonds or loans, used to raise money for eligible green products.

Suncor: 57.1

Oil and gas producer (Calgary)

Best practices: Suncor SU-T has actively engaged with suppliers to enhance its environmental performance, making notable progress. Key areas of achievement include its adherence to emissions targets for Scope 1 and 2—though like many energy companies it hasn’t yet established Scope 3 emissions targets. Its carbon pricing strategy—which applies to upstream and downstream operations—is commendable. Suncor also has a five-year forecast detailing investments for climate transition and links monetary compensations to executive and director pay scales. The company has a proactive approach to managing climate-related risks and opportunities.

Needs improvement: Suncor could prioritize a “just transition” approach, which will ensure its workers and the communities in which it operates are protected and lifted up during the shift to net zero. The company could also set Scope 3 emissions targets and implement carbon offset programs.

Rogers Communications: 57

Telecom (Toronto)

Best practices: Rogers RCI-B-T follows industry best practices when establishing climate targets by encompassing emissions from both Scope 1 and 2. The telecom demonstrates “notable efficacy” in meeting its targets, and separately reports Scope 1, 2 and 3 emissions. Rogers also demonstrates strong governance in its climate transition efforts, with a well-defined hierarchy of accountability and authority starting at the board and extending to various task forces, committees and working groups. For instance, its climate change steering committee, which is led by the vice-president of corporate real estate and includes VPs from various business units, operates under the purview of the board’s ESG Committee. The committee oversees the telecom’s climate strategy, mobilizes organizational teams and allocates resources to climate-related objectives.

Needs improvement: Rogers hasn’t disclosed whether compensation for its board, CEO, unit heads or employees is tied to achieving emissions-reduction targets or broader climate-related goals. Additionally, the telecom has either not defined an internal carbon price or does not disclose the price it uses.

The company says: “Rogers is committed to holding ourselves accountable to our ESG commitments and within the Energy and Sustainability Group, performance bonuses are partially tied to achieving our energy and climate-related management objectives.”

Gibson Energy: 56.9

Oilfield services (pipelines, oil storage, refinery) (Calgary)

Best practices: Gibson GEI-T is making significant strides in managing the low-carbon transition, particularly in its Scope 1 and 2 emissions-reduction targets. The company’s noteworthy carbon pricing mechanism aims to change internal behaviours, drive energy efficiency and encourage low-carbon investments to help navigate regulations and meet stakeholder expectations. Gibson also has a forward-thinking investment plan for the next five years which focuses on transition-related expenses, indicating a proactive approach to environmental sustainability. And its detailed TCFD report reflects the company’s commitment to understanding and managing climate-related risks and opportunities.

Needs improvement: Gibson has not yet set Scope 3 emissions targets. It also doesn’t provide much detailed information about its low-carbon innovation and carbon offset initiatives, nor its use of green bonds or loans.

The company says: “Our strategy prioritizes investment in renewables, modernization and innovation of our operations, and decarbonization activities, with carbon offsetting initiatives being reserved as a final step if needed. We believe that focusing on Scope 1 and 2 is the most impactful at this time, given the complexity of tracking Scope 3 emissions across the value chain, as they are often beyond a company’s scope of influence. With that said, we continue to estimate and report our Scope 3 emissions. We continue to prioritize low-carbon innovation and view the energy transition as an opportunity to offer enhanced infrastructure and services. Gibson is also the first public energy company in North America to fully transition its principal syndicated revolving credit facility into a sustainability-linked one, which includes terms that tie borrowing costs to the achievement of several ESG-related targets.”

—Sean Wilson, SVP & chief administrative and sustainability officer

Maple Leaf Foods: 56.7

Food producer (Mississauga)

Best practices: Maple Leaf MFI-T was the first food company in Canada to establish science-based targets for reducing Scope 1 and 2 GHG emissions by 30% (over 2018 levels, by 2030). Maple Leaf also has a 30% reduction target for the intensity of Scope 3 emissions produced in its supply chain, including supplier emissions.

Needs improvement: The company has not disclosed information about executive remuneration programs or policies linked to climate targets.

The company says: “We are continually looking for ways to improve our own metrics, targets and performance, and are actively engaging with other companies, associations and thought leaders to deliver solutions for a low carbon economy. While we do not currently have specific executive remuneration programs linked to environmental targets, this is something we are actively exploring.”

Cogeco Communications: 56.5

Telecom (Montreal)

Best practices: Cogeco’s CGO-T targets are aligned to the 1.5°C pathway, and the company has relatively strong performance in achieving them. These efforts include enhancements in energy efficiency, process changes and the establishment of robust targets. Cogeco has also committed to aligning these targets with strong decarbonization pathways, acknowledging the imperative to accelerate decarbonization.

Needs improvement: Cogeco has either not defined an internal carbon price or has not disclosed the price it uses. It has also failed to disclose details about how it incorporates low-carbon innovations into its operational processes.

Eldorado Gold: 56.3

Gold and base metals miner (Vancouver)

Best practices: Eldorado ELD-T reports separately on its Scope 1 and 2 emissions. It strives to reduce its carbon-emissions intensity, adheres to the TCFD framework, and has a vice-president oversee sustainability issues at mining operations.

Needs improvement: Eldorado hasn’t defined an internal carbon price and doesn’t disclose the price it uses, and it hasn’t provided details on the use of green bonds or loans. It also has yet to reveal details about the incorporation of low-carbon innovations in its operational processes.

The company says: “We believe in four levers to help us achieve our GHG mitigation target: Operational efficiencies and continuous improvement; technologies, processes and energy generation; grid decarbonization; and mine planning and operational changes. Not only do these opportunities help us to mitigate emissions, but we are also already realizing operational and safety benefits beyond.”

—Nora Lozano, VP of health, safety and sustainability.

First Capital REIT: 56.2

Real Estate (Toronto)

Best Practices: The REIT FCR-UN-T has established solid climate targets in its quest to manage the transition, comprising all three emissions scopes. It has also demonstrated it is efficient in realizing them. ESG and climate-specific targets are pivotal metrics in its corporate objectives. Performance in those areas is intricately tied to the pay and performance assessments of all employees, including the senior leaders. First Capital also aligns with the TCFD recommendations, incorporating them into its reporting practices.

Needs improvement: The company hasn’t provided details of its use of green bonds and loans, which play important roles in funding sustainable projects and initiatives. It has also yet to define an internal carbon price.

The company says: “FCR is actively working on asset level GHG reduction plans that include operational efficiencies, retrofit initiatives, tenant engagement and renewable energy generation, among other things. We know that getting to net zero cannot be done in isolation. We need collaboration and partnership with our national tenants and industry peers to achieve our common goal of net zero.”

—CEO Adam Paul, in company ESG report.

Keyera Corp.: 56.1

Pipelines (Calgary)

Best practices: Keyera KEY-T has excelled in some important areas, including good methane management and modest reduction targets for its Scope 1 and 2 emissions. It has a fugitive emissions management program that establishes leak detection surveillance through site surveys and infrared cameras, and the company incorporates innovative technologies in its operations, such as reusing waste heat. Keyera also discloses an internal carbon price, as well as how it’s calculated and how it influences investment and other business decisions.

Needs improvement: Keyera hasn’t provided details concerning the utilization of green bonds or loans, which play a crucial role in financing environmentally sustainable projects, nor does the company disclose any community and workforce management information. Keyera could also strengthen its transition plan by implementing a Scope 3 emissions-reduction target.

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