DT Vollmer – Page 26 – Resilient LLP (formerly DeMarco Allan LLP)

CSA Proposes Climate-related Disclosure Requirements

19 October 2021 No Comments By DT Vollmer

The Canadian Securities Administrators (CSA) yesterday published the proposed National Instrument 51-107 Disclosure of Climate-related Matter (the Proposed Instrument) and a companion policy addressing the need for climate-related disclosure requirements. The Proposed Instrument seeks to provide consistent and comparable climate-related disclosure information for investors and is mostly aligned with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. This bulletin briefly summarizes the Proposed Instrument and highlights key differences with the TCFD recommendations. Disclosure requirement of the Proposed Instrument. The Proposed Instrument would require disclosure consistent with the core elements in the TCFD recommendations as follows: Governance. Reporting issuers would be required to describe: board oversight of climate-related risks and opportunities; and management’s role in assessing and managing climate-related risks and opportunities. Strategy. Reporting issuers, where material, would be required to describe: climate-related risks and opportunities the issuer has identified over the short, medium, and long term; and impact of climate-related risks and opportunities on the issuer’s businesses, strategy, and financial planning. Risk management. Reporting issuers would be required to describe: the issuer’s processes for identifying and assessing climate-related risks; the issuer’s processes for managing climate-related risks; and how processes for identifying, assessing, and managing climate-related risks are integrated into the issuer’s overall risk management. Metrics and targets. Reporting issuers would be required to disclose: the metrics used by the issuer to assess climate-related risks and opportunities in line with its strategy and risk management process where such information is material; Scope 1, Scope 2, and Scope 3 GHG emissions, and the related risks or the issuer’s reasons for not disclosing this information; and the targets used by the issuer to manage climate-related risks and opportunities and performance against targets where such information is material. Modifications to the TCFD recommendations. The Proposed Instrument would not require issuers to provide a “scenario analysis”, which describes how resilient an…

Energy Charter May Put Paris Agreement at Risk

15 October 2021 No Comments By DT Vollmer

The Globe and Mail reports on growing support in Europe for withdrawing from the Energy Charter Treaty (ECT) as the threat of multibillion-euro lawsuits by fossil fuel investors intensifies. The increasing costs associated with claims under the ECT may also put the ambitions of the Paris Agreement at risk if signatories choose to allow fossil fuel companies to continue to emit greenhouse gases (GHGs) instead of paying compensation for lost investments. The ECT was drafted and signed, as the Soviet Union was dissolving, to protect European energy firms entering Russia and former Soviet Republics. The intent of the ECT was to allow investors to sue governments for policies affecting their new investments. The ECT is quickly becoming a vehicle for claims by fossil fuel companies to attempt to recoup losses from their investments as a result of climate action and the decarbonization of economies across Europe. It is estimated that claims brought by fossil fuel companies seeking compensation for climate policies could reach €1.3 trillion by 2050. Remaining subject to the compensation mechanism of the ECT could result in large payouts to fossil fuel companies unless countries choose to allow them to continue to emit GHGs for at least another decade under the terms of the ECT. Four claims have already been brought under the compensation mechanism of the ECT, with a combined total of more than €2.5B. A similar claim, against the US government for $15B USD, was brought by TC Energy for the cancellation of the Keystone XL pipeline as a NAFTA legacy claim. For further information or to discuss the contents of this bulletin, please contact Lisa DeMarco at lisa@resilientllp.com.

Ontario Introduces Changes to OEB Act and Electricity Act

15 October 2021 No Comments By DT Vollmer

The provincial government last week introduced Bill 13, Supporting People and Businesses Act, 2021, which includes legislative amendments to the Ontario Energy Board Act (OEB Act) and the Electricity Act. Changes to the OEB Act include: removing the upper limit on the number of commissioners and providing that the Labour Relations Act does not apply to commissioners; and providing for a single process for ministerial review of certain by-laws made by the board of directors of the OEB. Changes to the Electricity Act include: creating a two-year limitation period that applies to certain payments, adjustments, and amounts settled by the IESO; and replacing current administrative penalties in Part VIII of the Act (which provides for the Electrical Safety Authority (ESA)) and empowering the ESA to order a person to pay an administrative penalty if the person has contravened a prescribed provision of Part VIII or the regulations made under it; certain restrictions, limitations or conditions of a prescribed authorization; or a prescribed order of the ESA. For further information or to discuss the contents of this bulletin, please contact Lisa DeMarco at lisa@resilientllp.com.

TNFD Announces Taskforce Members

15 October 2021 No Comments By DT Vollmer

The Taskforce on Nature-related Financial Disclosures (TNFD) recently announced the 33 “Members of the Taskforce”, including senior executives from financial institutions, corporates, and market service providers. The Taskforce is working on developing a TFND risk management and disclosure framework, to be released in 2023, for organizations to report and act on nature-related risks. The TNFD is built on seven principles/themes: (1) market usability; (2) science-based; (3) nature-related risks; (4) purpose-driven; (5) integrated and adaptive; (6) climate-nature nexus; and (7) globally inclusive. The TNFD is assisted by more than 100 institutions, including the following Canadian institutions: BMO Financial Group, CPP Investments, the Intact Centre on Climate Adaptation, Mining Association of Canada, the Nature Conservancy of Canada, and WSP Global Inc. For further information or to discuss the contents of this bulletin, please contact Lisa DeMarco at lisa@resilientllp.com.

Biden Releases Agency Climate Adaptation and Resilience Plans

15 October 2021 No Comments By DT Vollmer

The Biden-Harris Administration recently announced climate adaptation and resilience plans for more than 20 federal agencies. The plans were developed by each agency and are available through the Whitehouse website. The agency plans focus on: Safeguarding federal investments by identifying programs and missions most at risk from climate change. Identifying leadership and accountability by identifying senior leadership and creating accountability structures to ensure top-down adaptation and resilience leadership. Developing a more resilient supply chain by updating supply chain policies and operations to create a more climate-resilient system. Enhancing protections for workers and communities by providing for implementing better support for workers vis-à-vis the impacts of climate change. Building a more equitable future by providing for actions that support President Biden’s environmental justice objectives. The Council on Environmental Quality and the Office of Management and Building are seeking public comments on the plans. Interested parties can submit comments online until November 6, 2021. For further information or to discuss the contents of this bulletin, please contact Lisa DeMarco at lisa@resilientllp.com.