Cenovus shareholders reject emissions target motion
Proponent not surprised by vote result at annual meeting but says "climate change is not going anywhere"
Cenovus Energy shareholders on Wednesday voted down a motion that would have required the oilsands company to set greenhouse gas emission targets aligned with the goals of the Paris climate accord.
The motion — put forward by Fonds de Soladarite des Travailleurs du Quebec (FTQ) — could have forced Cenovus to set medium- and long-term targets for its direct and indirect methane and other GHG emissions from operations.
But at its annual general meeting in Calgary, Cenovus shareholders voted more than 89 per cent against it.
Following the vote, Cenovus CEO Alex Pourbaix told the meeting the proposal would be too "prescriptive."
Cenovus' board had recommended shareholders reject the proposal from the Quebec investment fund.
"I want to be clear that our recommendation against the FTQ cube proposal, which did not pass today, was not because we do not place a high priority on environmental performance in reducing our GHG emissions intensity," Pourbaix said.
"Our recommendation was because we had challenges with the prescriptive nature of the proposal despite its alignment with our values on the importance of planning for and demonstrating environmental performance."
Backers of the proposal were not surprised by the outcome.
"At the end of the day, it's not about the final vote — what really matters is that climate change is not going anywhere," said Laura Gosset, senior analyst at the Shareholder Association for Research and Education, which worked with FTQ to file the proposal.
"It's an issue for companies like Cenovus and, as shareholders, we are going to continue to try and raise this issue because it's something that we are concerned about and we want to understand the company's plan for resilience in a low-carbon future."
FTQ's proposal said that the oilands company's disclosure of GHG emissions reduction targets had been "inconsistent," resulting in uncertainty for investors about how climate-related risks are being managed. It said Cenovus shareholders require "clear, consistent and comprehensive" disclosure of its plans to transition to a low-carbon future.
In its response, Cenovus said the request was "overly demanding" because achieving the Paris goal of limiting the global average temperature increase to less than two degrees Celsius relative to pre-industrial levels will take an integrated national and global level plan.
The company said it agreed with the spirit of the motion but not its approach, adding it has cut per-barrel GHG emissions at its oilsands operations by about one-third since 2004 and is subject to Alberta oilsands and methane emission reduction regulations.
FTQ's proposal was not the only time during the meeting that climate change targets were discussed.
During a question-and-answer session with shareholders, Pourbaix was also asked about newly published research from federal scientists that suggests a number of major oilsands operations seem to be emitting significantly more carbon pollution than companies have been reporting.
The paper's lead author said the lower emissions rates reported by companies are in no way due to data-toggling or dishonesty on their part. Instead, the differences between his team's estimates and previously reported numbers are related to methodology.
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Pourbaix said he hadn't yet read the research but was confident that Cenovus' reporting is "accurate and correct."
"Alberta has, as far as I know, the most advanced and comprehensive rules for monitoring air quality and emissions," Pourbaix told shareholders.
"And I know for a fact at Cenovus that … the emission reports that we are filing are very accurate representations of the GHG emissions and any other air emissions that the company is responsible for."
With files from Tony Seskus