Investors for Paris Compliance executive director Matt Price near Duncan, B.C., in 2024. The climate advocacy group is shutting down.Chad Hipolito/The Globe and Mail
Matt Price established Investors for Paris Compliance in 2021 to test whether the tools of shareholder activism could push corporate Canada to live up to its net-zero pledges.
Now, Mr. Price and his team have concluded that the answer is no. At least not to the point of bringing about the systemic change needed to achieve the country’s national climate commitments. That, the advocacy group says, must be led by governments and regulators, with the weight of financial and legal clout.
So, after five years of filing climate-related shareholder proposals at a slew of company annual meetings, publishing reports and filing regulatory complaints, Investors for Paris Compliance is shutting down.
“We still think we did good work, and we’re not leaving with our heads hung down in disappointment or anything. What we did was we tested a hypothesis, and we gave it our all,” Mr. Price said in an interview.
“We punched well above our weight in terms of delivering our products, considering how modest our budget was. So we’re leaving this proud of our work and having exposed the limits on it.”
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Investors for Paris Compliance, or I4PC, is closing its doors as climate considerations have fallen on the national priority list, against a backdrop of backlash toward environmental, social and governance measures in the United States, a punishing trade war and increased focus on energy security as the Iran war drags on. In Canada, many companies have softened or even deleted their climate-related messaging, fearing financial penalties under Ottawa’s anti-greenwashing legislation.
The organization has released its swan song, a document that explains its decision to wind up operations. It details a series of lessons the six-person group has learned since its inception, including how voluntary disclosure and energy-transition planning at the corporate level won’t get the country to its net-zero targets.
I4PC says this is apparent at the country’s politically powerful big banks, which it notes do not have the regulatory incentives to improve their climate-risk structure, such as altering risk ratings for carbon-intensive or sustainable financing.
However, I4PC said its actions have influenced better disclosure at banking institutions, prompting specificity with language around sustainability and more detailed reporting relating to financed emissions and transitions.
I4PC also zeroed in on the insurance industry, conglomerates, as well as oil and gas companies such as Enbridge Inc., Cenovus Energy Inc. and Suncor Energy Inc. Last year, the group gave up filing oil and gas proposals, saying the companies were resisting moving credibly to net-zero, while I4PC’s efforts gave institutional investors cover to hang back on pushing for better performance.
“We helped expose inconsistencies, sharpen expectations and, in some cases, move companies to act,” I4PC said in its decision to “sunset.” “But this did not, and cannot on its own, drive the scale or speed of change required to address a risk that is now beginning to affect system stability.”
Mr. Price said that instability is playing out now in the insurance industry, which his group has evaluated for physical-climate risk readiness. The ripple effects of increasingly severe weather-related disasters will spread to other sectors that remain unprepared, he said.
“That’s going to be the canary in the coal mine. The home insurance sector lost money for two years in 2023 and 2024. It’s where things are starting to wobble, and you’ll see it get worse over time as the extreme weather impacts get more expensive. It’s not something you can just ignore; this stuff will come back,” he said.
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I4PC, named after the Paris Agreement, a 2015 international pact on emissions reduction, launched in 2021 with funding from such charitable foundations as the Trottier Family Foundation and the McConnell Foundation. The group filed 21 proposals over five annual meeting seasons, though not all went to votes.
Its campaigns gained traction, but only up to a point. Shareholder support averaged 20 to 25 per cent, and some results were higher. The group said that added up to a “meaningful minority of investors” calling for climate action.
I4PC will publish one more report before winding up – an assessment of regulators and securities commissions. In many cases, those agencies have delayed imposing mandatory disclosure of risks and transition planning, Mr. Price said. However, he noted the Office of the Superintendent of Financial Institutions, which regulates banks and insurers, has been a leader in identifying issues and pushing disclosure.
It’s a problem of inertia, he said. “Most regulators in Canada really haven’t fully wrapped their heads around climate risk and what it’s going to do to system stability over time.”