What does net zero emissions even mean for Canadian business? Without set standards it’s hard to tell – The Globe and Mail

Andrew MacDougall

Apr 13, 2021

Public companies across Canada are pledging to reduce their carbon footprint and setting targets and deadlines often more ambitious than set out in the Paris Agreement, whose goal is to limit global warming by 1.5 degrees Celsius. However, according to a recent article in The Globe and Mail by reporter Jeffrey Jones, there are no enforced standards on what constitutes net zero.

In his in-depth article, Jones asked what happens if companies fail to meet their net zero plans? Are there any consequences? From a legal standpoint, public companies face rules and regulations around forward-looking information. They’re required to detail the factors that went into coming up with their plans, and they need to disclose that forecasts could vary materially from actual results.

Jones turned to Andrew MacDougall, partner in the Corporate Governance group at Osler, who specializes in climate risk reporting, for his take on what the ramifications could be for a company that can’t meet its net zero goals.

“In this case, the key question is whether the issuer has a reasonable basis for believing it can achieve the target in that disclosed timeframe,” Andrew says. “If it does not, securities regulators could take enforcement action.”

If investors suspect a company didn’t believe its net zero target was achievable when it was announced, Andrew notes that there’s also the risk of court action. Shareholder lawsuits and proxy fights by activist investors also loom over companies that fail to live up to environmental targets.

If you have a subscription to The Globe and Mail, you can learn more by reading the full article by Jeffrey Jones, “What does net zero emissions even mean for Canadian business? Without set standards it’s hard to tell,” published on April 10, 2021.