Climate Change, Disclosure and the Capital Markets Canada

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Climate Change, Disclosure and the Capital
Markets (Canada) David Greenall The Conference
Board of Canada October 25, 2006 The Business of
Climate Change Conference
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• Canadian institutional investor interest in
  climate change
• ? interest in ESG factors in general
• Expanding scope of trustee fiduciary
  responsibility / Responsible Investment
• Prudent investor - Growing body of evidence
  suggesting climate change as a material risk and
  competitiveness issue

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Canadian Investor Action on Climate Change

• Passive investing ? active engagement
• Shareholder activism / Proxy voting
• Adoption of Responsible Investment/
  Sustainability frameworks (e.g. CPPIB/
  Desjardins/ bcIMC)
• UN Principles
• Project finance and clean-tech investment

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Canadian Investor Action on Climate Change -
Disclosure

• Carbon Disclosure Project 4 Canada 280
• 225 global investors / 16 Canadian
• 31 trillion in assets / 1 trillion in assets
• Reflect concern that reporting issuers not
  providing adequate information in AIF/ MDA
• Collaborative engagement to improve quantity and
  quality of investor-relevant information

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Canadian Investor Action on Climate Change -
Disclosure

• Structured disclosure is an efficient and
  effective mechanism to address information needs
  of investors, while simultaneously driving
  enhanced economic and environmental business
  performance
• Quality of a companys disclosure and underlying
  controls relating to climate change may directly
  affect its perceived risk profile

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Canadian Investor Action on Climate Change -
Disclosure
We believe that increased disclosure of ESG
issues often leads to improved performance by
companies in these areas. As these risks become
known and factored into the analysis of a
companys competitiveness and reflected in its
cost of capital, this in turn creates a strong
incentive for companies to focus their attention
on them. David Denison, President and C.E.O.,
CPPIB. October 4, 2006 Enbridge believes in
full transparency, when it comes to public
reporting of our greenhouse gases. This gives
assurances to financial market players that we
understand the scope, magnitude and implications
of our carbon emissions. In addition, it
demonstrates that we are taking the necessary
steps, not only to manage the risks associated
with climate change, but also to explore the
opportunities presented by such clean energy
alternatives as natural gas, demand-side
management, wind power and fuel cells. Pat
Daniel, President and C.E.O., Enbridge Inc. CDP4
Submission
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Challenges to Resolving the Investor/Issuer
Communication Gap on Climate Change

• Cultural myths
• Variation in emissions quantification and
  reporting methodologies
• Uncertain adequacy of safe harbour provisions
  for forward-looking disclosures
• Balancing investor need-to-know with corporate
  privacy and competitiveness concerns

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Climate Change, Disclosure and the Capital
Markets (Canada) David Greenall The Conference
Board of Canada greenall_at_conferenceboard.ca CDP4
Canada 280 report may be downloaded from
www.conferenceboard.ca