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Good afternoon, and welcome to Globe Climate, a newsletter about climate change, environment and resources in Canada.
Canmore, Alta., is one of Canada’s fastest growing communities. But when human populations increase in the same space as wildlife, the risks are twofold. Bordering Banff, the country’s first national park, the community houses a crucial wildlife corridor of rare quality. Grizzly bears, black bears, elk, cougars and wolves all depend on it to keep them connected with different parts of the Bow Valley and beyond.
Ahead of Earth Day this Thursday, we aim to answer a big question. Can large numbers of humans and wildlife coexist, and, if so, how?
Now, let’s catch you up on other news.
Noteworthy reporting this week:
- Emissions: Canada’s greenhouse gas emissions fell by about 9 per cent during the first year of the pandemic, largely owing to a decline in travel amid mandated lockdowns.
- Energy: Canada’s oil and gas industry will lose public support if it doesn’t hit net zero by 2050, says the CEO MEG Energy, one of the country’s largest oil sands producers.
- Wildlife: Invasive earthworms pose risk to Albertan forest’s bug population, feeding Canada’s biodiversity crisis. Just ask the other bugs.
- Wine: In B.C., Blue Mountain faces a vintage gone up in smoke. In Europe, severe spring frost threatens wine growers for a second year.
- In-depth with The Narwhal: Are we living in the Anthropocene? This Ontario lake could help global geologists decide.
A deeper dive
ESG ratings may be giving investors a false sense of sustainability
Sierra Bein is the author of Globe Climate newsletter. For this week’s deeper dive, she brings you the highlights of The Globe’s recent ESG ratings investigation.
The world of green investing is not new to The Globe.
At the COP26 climate summit in Glasgow “net-zero” and “greenwashing” were two big buzzwords as companies and funds got tickets to ride the environmental, social and governance (ESG) express. It was easy to game the ESG system because no one knew precisely what ESG meant.
And we’ve reported on the equally difficult challenge that came to financial advisers to find greenwashing in investments for their clients.
At the same time, there is growing pressure on directors to speak knowledgeably on climate, in addition to the other ESG metrics that The Globe and Mail has now tracked for 20 years in its annual Board Games ranking of Canadian companies.
Now, as investors around the world are ploughing tens of billions of dollars a year into companies and funds that tout high ESG standards there is growing concern that treating them as an asset class alongside traditional stocks and bonds risks shifting the focus away from the non-financial values it’s meant to promote.
A Globe and Mail investigation shows the methods these ratings providers use vary to the point where the same company can be judged as both an ESG leader and a laggard, depending on who’s doing the measuring. It’s sowing skepticism not just among investors but among some of the companies being scored, too.
Sustainable investing reporter Jeffrey Jones and Institutional investment reporter David Milstead reviewed the ranges of companies’ ratings and assigned them roughly into higher, middle and lower tiers. They then identified companies that had divergent ratings across providers. The review showed wide variances in scores for some companies. Three of the companies The Globe found to have among the widest divergences in Canadian ESG ratings – Toromont Industries, Ritchie Brothers and FirstService Corp. – are in the ESG Leaders ETF.
This doesn’t mean fund managers are breaking rules, but it puts the onus on investors to familiarize themselves with the criteria of the funds they buy and what the objectives are.
“The real problem at the moment is not necessarily ESG ratings. I think the much bigger problem is the promise that if you buy a fund based on ESG ratings, you have an impact – you change the world,” says Florian Berg, one of the authors of the Aggregate Confusion Project. “There’s no proof.”
What else you missed
- Ottawa is being asked to fast-track disaster relief funds for the extensive costs related to flooding as B.C. faces massive storm bills. The province also commited $53.6-million in recovery funding for 10 local communities affected by floods
- South African President visits flood victims as death toll rises to 259
- OPEC tells EU it’s not possible to replace potential Russian oil supply loss
- East and Horn of Africa prep for worst drought in decades, braces for more flooding as rains restart in east
- Emmanuel Macron held a major campaign rally in Marseille, touting his environmental and climate accomplishments and plans in a bid to draw in young voters
Opinion and analysis
Members of the Lower Fraser River Working Group: Restoring Sumas Lake is an important step in B.C. flood recovery, climate adaptation and reconciliation
Grant Bishop: Beyond just carbon pricing, the federal budget will help accelerate Canada’s energy transition
Canadian bank investors resoundingly reject push for ‘say-on-climate’ votes
The country’s five largest lenders all held their annual general meetings over the past two weeks, and this year there was a concerted push from activists, particularly from Mouvement d’éducation et de défense des actionnaires, known as Médac, to require them to hold regular advisory votes on environmental policy and targets.
The climate votes would be similar to annual say-on-pay votes that many large corporations now routinely hold, giving investors an opportunity to publicly voice any displeasure with executive compensation. However, the say-on-climate proposals need the support of a majority of shareholders who vote at each bank’s meeting, and on average, about 80 per cent of each bank’s shareholders rejected them this year, including at TD’s meeting on Thursday.
- Lloyd’s of London switches to remote trading after climate activists block entrances to headquarters
- Prices of EVs jump on battery and materials shortages but experts say investors will be rewarded in long run
- BlackRock says it expects 75 per cent of company and government assets to be net zero-aligned by 2030
- Group of minority TotalEnergies shareholders to present new climate resolution at AGM: document
Each week The Globe will profile a Canadian making a difference. This week we’re highlighting the work of Sarah Landstreet doing sustainable packaging.
Sarah Landstreet’s resumé is full of twists and turns: mechanical engineer, cupcake shop owner, Ivey Business School student and, finally, sustainable packager. “I like solving unsexy problems,” she says, and shipping cupcakes revealed “a very opaque, old-school industry” desperate for modernization. “Consumers are demanding better branded packaging that looks great and isn’t destroying the planet.” For them, Landstreet created knowyourpackaging.com, where users can track exactly where that coffee cup came from and where it’s going. Her company, Georgette Packaging, also designs sustainable packaging with the lowest possible impact on the planet and uses carbon offsets to cover the rest.
Do you know an engaged individual? Someone who represents the real engines pursuing change in the country? Email us at GlobeClimate@globeandmail.com to tell us about them.
Photo of the week
Guides and Explainers
- Want to learn to invest sustainably? We have a class for that: Green Investing 101 newsletter course for the climate-conscious investor. Not sure you need help? Take our quiz to challenge your knowledge.
- We've rounded up our reporters' content to help you learn about what a carbon tax is, what happened at COP 26, and just generally how Canada will change because of climate change.
- We have ways to make your travelling more sustainable and if you like to read, here are books to help the environmentalist in you grow, as well as a downloadable e-book of Micro Skills - Little Steps to Big Change.
Catch up on Globe Climate
- To stop allergy season from getting worse, mitigate climate change
- What does it take to move an entire city?
- How the B.C. flood changed lives forever along Highway 8