CEC to team up with Canada’s govt for implementation of net zero standards

Climate Engagement Canada’s recently launched Net Zero Benchmark Criteria will be implemented in “close coordination” with the Canadian government. 

The CEC Net Zero Benchmark provides a set of common standards for investors to evaluate corporate issuers’ progress towards aligning with the Paris Agreement’s ambition: limiting global warming to well below 2 degrees Celsius, while pursuing efforts to limit the increase to 1.5 degrees.

According to Kevin Thomas, chief executive of Canada’s Shareholder Association for Research and Education (SHARE), “[in establishing the Criteria] there has been close coordination with the federal government on its own net zero challenge." 

He stressed that "we want to make sure we're creating as widely supported a benchmark as possible. We're all rowing in the same direction, so having great variances would not help any of us. That dialogue is ongoing with the government, and of course with securities regulators as well.”

Thomas made the remarks at a webinar hosted by the CEC, an investor-led collaborative engagement grouping, on the Net Zero Benchmark and what it means for Canadian companies, investors, and the just transition.

He has already described the benchmark as “Google Maps for the Canadian climate transition.” 

The Net Zero Benchmark Criteria is intended to serve as a tool to support the 'Just Transition' among Canada's corporate issuers towards a net zero economy by standardizing expectations from the financial community.

The benchmark is designed to be closely aligned with the benchmark developed by Climate Action 100+, the current global standard for collaborative shareholder engagement.

Also speaking at the webinar event was Maia Becker, head of ESG research and policy at RBC Global Asset Management. 

However, of the relationship between the Canada benchmark and the CA100+, she said: “It's too early to tell. Once we have the results of the of the first benchmark but also the engagement started mid last year for certain companies we will start to understand perhaps what are some of the thematic reasons for where there might be some differences.”

Also at the event, Thomas confirmed that The Net Zero Benchmark Criteria will assess corporates on an annual basis, reasoning that this will be a “sufficient time to see if there has been any change in practices.”

Last month, the Royal Bank of Canada announced plans to establish a climate research unit that should combine industry knowledge and research projects across a range of industries with the aim to reduce emissions.