Why Low Carbon is a Low Bar to Improving Sustainability

In an age of climate-change awareness, investors are increasingly interested in allocating to strategies that can provide reasonable returns from holdings while limiting significant carbon emissions.

But owning a portfolio focused on the lowest carbon footprint alone may not be enough to reach the goal of creating a more sustainable global economy. In some cases, it may even be getting in the way of it.

This stems, at least in part, from how carbon emissions are currently measured and used. Many publically-traded companies self-report data that is only as good as the systems in place to either collect it (aka direct measurement), or estimate it using models that assign carbon intensity to production activities. At the same time, this data is unverified and not necessarily reviewed by government agencies as is the case for more heavily-regulated sulphur and/or nitrogen dioxide emissions.

Meanwhile, when companies choose not to self-report or do not have adequate expertise or resources to do so, the amount of carbon emitted by them is often estimated by third party research firms whose techniques for estimation are not standardized and may vary significantly between research firms.

Despite these inherent uncertainties associated with measuring carbon emissions, the data being compiled is becoming a much more important component of asset allocation and portfolio construction decisions. This is motivated by an effort to support the transition towards a low carbon economy, but also from a desire to reduce the potential risk of investing in companies with higher carbon footprints.

In some cases, incorporation of a low carbon strategy is being utilized in an appropriate and useful manner – for instance, to provide clarity on potential sources of high emissions and related risks should carbon be regulated (and priced) more effectively.

However, too often it is being used as the primary factor in decision making, in effect elevating an unregulated and imprecise measure to a level superior to other regulated, validated and more robust metrics.

In our experience, businesses that create actual solutions related to sustainability through the manufacture of equipment, devices, materials and other “stuff,” are regularly overlooked because of a myopic focus on carbon intensity. This is true even though many of these businesses have the potential to benefit from the move towards greater sustainability.

The unintended bias for many portfolios, as a result, often leans towards less intensive industries such as financials, software and services that have smaller carbon footprints and yet provide little or no exposure to businesses with more direct impact including those offering basic needs like water, food, energy, and waste.

In doing so, the investment management industry is prone to creating strategies that appear to exhibit exemplary financial characteristics and environmental credentials, but that don’t do nearly enough to positively drive forward the goal of establishing a more sustainable carbon footprint.

For instance, one beneficiary of the last several years of singular focus on carbon intensity has been the slant towards asset-light companies such as the FANG stocks (Facebook, Amazon, Netflix, Google) or conventional payments companies such as Visa and MasterCard. As investments, they have been very much in vogue from both a market rotation and carbon rating standpoint, and have demonstrated very strong positive attribution/contribution for many sustainable strategies and indices.

However, on closer inspection, these companies and the products they offer have shown themselves to be mostly irrelevant from a sustainability perspective and, despite their ubiquity, have little intentional impact on the issues at hand.

We believe this approach is shortsighted and not the best way forward for investors who are truly committed to establishing a more sustainable economy.

What’s needed are strategies that go beyond simple, unilateral comparisons of one company or sector’s carbon intensity against another, in favour of more nuanced approaches that direct capital at companies focused on solving sustainability challenges and not just at ones that avoid them.

Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not necessarily reflect the view or position of the Responsible Investment Association (RIA). The RIA does not endorse, recommend, or guarantee any of the claims made by the authors. This article is intended as general information and not investment advice. We recommend consulting with a qualified advisor or investment professional prior to making any investment or investment-related decision.

Impact Investing in Canada: Coming of Age

Over the past ten years we have seen the Impact Investing industry define and redefine itself a few times. In many regions, Impact Investing is known to encompass all forms of Responsible Investment strategies across asset classes.

But in Canada, the idea tends to fracture along asset class lines with “Impact Investing” referring to private market investments and “ESG” and “SRI” strategies referring to public market investments.

Like any pre-teen, Impact Investing currently sits on the edge of youthful maturity. Canada might be described as a “late bloomer” compared to some global comparators – less mature, with fewer investment options and less capital committed. Impact investing enters adolescence charged with emotion, fueled by nascent growth and ready to change the world. Skepticism remains high among those “older and wiser”, who dismiss impact investing as youthful exuberance. But they continue to underestimate the potential of the massive intergenerational transfer of wealth and the difference in priorities of the recipient generation.

So how will this young industry prove itself and mature into the change-making adult that we desperately want it to be?

Focus on the Impact, Not the Name

Regardless of what you call it, the fundamental premise is the same. Both retail and institutional investors increasingly want to drive positive social and environmental change with their investments, in all asset classes. Investors don’t care if we call it “Impact”, “Responsible”, “Sustainable” or otherwise. They do care about and will continue to demand options across asset classes. Investors want compelling investment opportunities that deliver returns and impact. They don’t want to listen to complicated jargon or be limited by asset class.

Yes, creating proper naming conventions is important, if it doesn’t get in the way of investing.

Build Impact Products and Strategies

To date Impact Investors have focused primarily on private equity and private debt as they explore this emerging space. Many impact investors also include alternatives such as social purpose real estate, green infrastructure and agriculture in their portfolios. The next frontier of impact investing is undoubtedly public equities. Innovative investment managers are building customized portfolios of high impact public equities focused on areas such as fossil fuel free, green energy, gender lens, board diversity, and social justice, to name a few. These are not simple ESG or SRI strategies, they go far beyond negative screening, best in class and ESG risk analysis.

They are looking for the intentionality of social or environmental impact baked into the DNA of the investee company and then measured. However, customized portfolios for accredited private investors and foundations alone will not achieve the scale of change we seek. For impact investing to “go mainstream” we need financial institutions and asset managers to integrate this thinking into products for both retail and institutional investors.

Measure the Impact

Impact measurement is the subject of much debate. Impact investors are divided on the theory, frameworks and whether it is necessary. On the more sophisticated end of the spectrum, investors have built detailed impact measurement frameworks supported by IT systems and linked to financial and strategic reporting. On the other end (and more commonly), investors have a hard time tracking a handful of impact metrics consistently. We are seeing traction with global frameworks such as IRIS and the Sustainable Development Goals (SDGs), which are key to building commonality of measurement between investors and investees. We will continue to see a variety of approaches to impact measurement based on capacity and perspective. What is important is that we measure impact in some way and continue to make the case for incrementally more impactful investments.

Impact Investing Infrastructure

As impact investing grows it needs to be supported by strong mentors and role models to reach its full potential. Impact investing can benefit immensely by leveraging the platforms, systems and distribution channels that mainstream finance depends on. Finance and investment professionals, investors, entrepreneurs, we are counting on your wisdom, your support, your ingenuity and your open minds. Impact investing is the future generation of investing. Invest in its success.

Growing up is hard. It is awkward and flawed, paradoxically characterized by insecurity, and over-confidence. Yet with youth comes clarity, fresh perspective and innovation. Impact Investing in Canada is poised to make lasting social and environmental change, but it first needs to break out of childhood and charge into maturity.

The path there will not be linear, but for the sake of ourselves and generations to come, it’s important that we press on. Determination, iteration and bias to action will see impact investing mature. We will see impact considered deeply across all asset classes, in a multitude of products and strategies. We will have depth of service offerings and asset management. And most importantly, as a result, we will have the positive impact we aspire to have. This tween will be an adult sooner than we think!

Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not necessarily reflect the view or position of the Responsible Investment Association (RIA). The RIA does not endorse, recommend, or guarantee any of the claims made by the authors. This article is intended as general information and not investment advice. We recommend consulting with a qualified advisor or investment professional prior to making any investment or investment-related decision.

Is Nuclear Energy Suitable for an RI Portfolio?

As the field of responsible investing (RI) matures, it is worthwhile to consider the environmental, social and governance risks and opportunities related to nuclear energy and other debatable issues.

For example, the United Nations cites 17 Sustainable Development Goals (SDGs)—one of these goals is ‘Zero Hunger’. In our research on a company such as Nutrien, which produces fertilizers, we could certainly categorize it as a company that solves for this goal. However, Nutrien fails or receives a negative score for other SDGs such as ‘Clean Water and Sanitation’ and ‘Life on Land’. In those areas, fertilizers and fertilizer companies are part of the pollution problem.

Nuclear energy occupies a similar grey area for the RI community—this is why we believe it’s important to debate its merits through an ESG lens. Nuclear has great potential as an energy source but is controversial for many investors.

The Nuclear Downside

Nuclear energy, which uses uranium as fuel, produces waste that remains radioactive for very long periods of time.

Long-term storage and management of radioactive waste remain central concerns. In Canada, we have our own proprietary technology called CANDU (Canada Deuterium Uranium) that requires fuel rods to be replaced every 18 months or so. These rods are stored in large swimming pools and must be continually monitored for safety and to safeguard against their reuse. Some research suggests that, in the wrong hands, this radioactive waste can be reused to create and proliferate nuclear arms.

In addition, there have been several high-profile accidents involving nuclear energy, most recently in Fukushima, Japan. Unfortunately, it is impossible to handicap the odds of a reoccurrence of a similarly high impact but low-probability event. The Canadian Nuclear Safety Commission (CNSC) has established a four-year action plan to ensure that the lessons learned from the Fukushima accident are applied in Canada to enhance the safety of our nuclear facilities. The good news is that the CNSC Task Force confirmed that nuclear facilities in Canada are able to withstand and respond to credible external events, such as earthquakes.

The Upside of Nuclear Energy

Nuclear energy produces electricity from uranium, a natural resource that is mined. The benefits of nuclear energy are low greenhouse gas emissions, low operating cost (the cost of fuel is practically zero per kWh) and high reliability as a fuel source.

Nuclear energy creates a number of high-paying jobs in the community where a nuclear plant is located and produces emission-free electricity under a highly regulated regime.

The Elusive Search for a Perfect Energy Source

As we look to a future of transportation that will be predominantly powered by electricity, a clean source of electricity will become paramount. Natural gas is less carbon intensive than coal or oil, but it does produce greenhouse gases, as well as other nasty emissions such as nitrogen oxides.

Solar panels, too, contain toxic elements such as cadmium, which is used in thin-film solar, a fact not often discussed as the industry continues to expand. Cadmium is one of the top six deadliest and toxic materials known. The cadmium in solar panels (CdTe or cadmium telluride) appears to be less toxic than elemental cadmium, but its precise level of toxicity remains unclear. Although a regulated disposal program could emerge, the long-term safety of cadmium telluride solar panels is an issue for the solar industry.

Weighing the Pros and Cons of Nuclear Energy

In our view, the main issue with nuclear energy is the disposal of used nuclear fuel—but the waste management challenge is not unique to the nuclear sector. In the solar panel industry, there are different techniques to physically immobilize heavy metals such as cadmium in a way that can be securely disposed of in a hazardous waste landfill site. Unfortunately, there are no effective similar methods for used nuclear fuel.

Having said that, it’s important to recognize the fact that used nuclear fuel is heavily guarded and regulated. While the long-term storage of nuclear waste requires physical space, the relative amount of energy produced is very high. For example, the spent fuel for all of Ontario’s 20 nuclear reactors is stored at Bruce Power’s site, in a pool the size of a 14-foot deep but otherwise typical swimming pool. It is stored there for 10 to 20 years, after which it is reprocessed or put into dry cask storage. Since the 1960s, the entire Canadian spent fuel would fit in seven hockey rinks, stacked to the top of the boards.1

Tying this back to the United Nations Sustainable Development Goals of ‘Affordable and Clean Energy’, ‘Industry, Innovation and Infrastructure’, and ‘Climate Action’, it seems that an argument could be made to consider nuclear as an investment in ESG portfolios. Even better, engineering companies that provide leading nuclear decommissioning services2 would fit very well in an ESG portfolio.

Sources:

1nuclearsafety.gc.ca

2 Nuclear decommissioning is the administrative and technical process whereby a nuclear facility such as a nuclear power plant, a research reactor, an isotope production plant, a particle accelerator, or uranium mine is dismantled to the point that it no longer requires measures for radiation protection.

Disclaimer
The views expressed in this article are the personal views of Dominique Barker and should not be taken as the views of CIBC Asset Management Inc. This document is provided for general informational purposes only and does not constitute financial, investment, tax, legal or accounting advice nor does it constitute an offer or solicitation to buy or sell any securities referred to. Individual circumstances and current events are critical to sound investment planning; anyone wishing to act on this article should consult with his or her advisor. The information contained in this article has been obtained from sources believed to be reliable and is believed to be accurate at the time of publishing, but we do not represent that it is accurate or complete and it should not be relied upon as such. All opinions and estimates expressed in this article are as of the date of publication unless otherwise indicated, and are subject to change. Certain information that we have provided to you may constitute “forward-looking” statements. These statements involve known and unknown risks, uncertainties and other factors that may cause the actual results or achievements to be materially different than the results, performance or achievements expressed or implied in the forward-looking statements.
The Responsible Investment Association (RIA) does not endorse, recommend, or guarantee any of the claims made by the author. This article is intended as general information and not investment advice. 

Can Diversity and Inclusion Help Investors Beat the Market?

“The majority of traditional mutual fund managers fail to outperform their respective benchmarks after fees” is mentioned so frequently today it is almost ubiquitous. The last decade has seen a huge rise in quant funds which scour every quantitative piece of information from company financial statements to try to find factors that might allow them to beat the overall market.

But perhaps, as illustrated by the Thomson Reuters Diversity & Inclusion Index, there is a simpler answer, and one you wouldn’t find on a company’s balance sheet.

The Diversity & Inclusion Index is a simple, market-cap weighted index of the 100 companies globally with the highest Thomson Reuters Diversity and Inclusion Scores. This score is made up of 4 pillars — diversity, inclusion, people development and reported controversies related to these values. It does not consider any financial-related metrics, yet the index has outperformed the global stock market over a 3 and 5-year timeframe, on both an absolute and risk-adjusted basis. Furthermore, the outperformance is consistent, with the index beating the broad market every calendar year from 2013 through 2017.

It appears, and maybe not surprisingly, that a company with a strong culture of diversity and inclusion, which develops its people and prevents controversies, is a sign of strong management — which leads to stocks that perform well on a long-term basis.

One common criticism of ESG indices, or generally investing with an ESG orientation, is that there are inherent biases against certain countries or sectors and could thus be less diversified. For example, a low carbon index strategy would be lighter on fossil fuel companies than the broad market. This doesn’t appear to be the case when diversity & inclusion metrics are used. The oil & gas industry is represented (including Enbridge), and industrials make up 7% of the index.

From a country perspective, only one country — Switzerland — has a weight in the index that is more than 5% over or under its weight in the MSCI ACWI (all country world index). In general, European countries tend to outperform while their Asian counterparts lag. The top 3 countries, measured by their weight relative to their weight in the MSCI ACWI, are Switzerland, Germany and Ireland, while the two most underweight are Japan and China. In North America Canada is 2% overweight while the US is 3% underweight.

The absolute outperformance of the index might be explained by diversity in the workforce leading to diversity of thought, ultimately leading to stock performance, especially in industries like healthcare and technology that are very IP- and innovation-driven. A recent Goldman Sachs study found that considering only percentage of female employees would have led to 11.7% and 9.5% outperformance respectively for medical tech and pharmaceutical companies (top 40 percentile over bottom 40 percentile over 3 years). The portfolio diversification (sector and country) outlined above then (partially) explains why the Diversity & Inclusion Index also outperforms on a risk-adjusted basis.

The top company in the index globally is Accenture, headquartered in Ireland (although this is mostly for tax reasons, the majority of its revenues come from North America). Accenture has also scored a perfect 100 on the Human Rights Campaign Foundation’s Corporate Equality Index since 2007. The top company in Canada is BMO, which scores particularly well on the “Inclusion” pillar. BMO provides flexible working hours, day care services and programs on HIV/AIDS. The proportion of companies in the banking services industry that provide these are 25%, 15% and 6% respectively.

The paradigm of Responsible Investing (RI) is changing. The classic question of, “will investors sacrifice returns in order to invest more in line with their values?” is perhaps not only irrelevant, but directionally incorrect. If the last 5 years are any indication, maybe the question should be “why wouldn’t investors increase their returns by considering non-financial metrics that are statistically linked to stock performance?”

Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not necessarily reflect the view or position of the Responsible Investment Association (RIA). The RIA does not endorse, recommend, or guarantee any of the claims made by the authors. This article is intended as general information and not investment advice. We recommend consulting with a qualified advisor or investment professional prior to making any investment or investment-related decision.

Canadian Investors Step Up Their Actions on Climate Change

In Canada, the impact of climate change is becoming increasingly visible.

In a speech last year,  the Deputy Governor of the Bank of Canada spoke of “material and pervasive effects” on the Canadian economy, pointing to a confluence of climate-related weather activities in increasing number, ranging from forest fires, storms, droughts, invasive species and road closures to warming weather patterns—all of which pose potential risks to investors.

Research sponsored by the federal government estimates that the cost of climate change to the Canadian economy will reach between $21 billion and $43 billion by 2050.  Little wonder then that investors are becoming increasingly concerned about the material risks around climate change.

In December 2015, the Financial Stability Board (FSB) established the TCFD to develop voluntary, consistent climate-related financial risk disclosures for companies to use when providing information to investors, lenders, insurers and other stakeholders. The final recommendations of the TCFD were released in June 2017 after a collaborative process of global stakeholder consultations.

Last year, as part of its 2018 reporting framework, the PRI incorporated pilot climate reporting indicators based on the June 2017 TCFD recommendations. The aim was to improve industry disclosure and enable investors to implement TCFD guidance. In total, 480 PRI signatories (from 1449 globally) completed the indicators in the 2018 Reporting Framework, of which 28 were Canadian signatories (From 88 in Canada reporting).

The 2019 PRI Reporting Framework will continue to include pilot climate reporting indicators based on the TCFD. The indicators will be updated to incorporate signatory feedback including the need for streamlining and more practical guidance. The PRI will continue to drive TCFD implementation across markets, encouraging regulators, companies and investors to advance further.

Last year, the PRI, in conjunction with Baker McKenzie, produced a local review, which looked at the recommendations from a Canadian perspective.

The review found that Canada’s existing regulations requiring climate disclosure are not yet consistent across sectors or in relation to the scope or medium of reporting. As Canada has been relatively slow to implement comprehensive regulations incentivising or compelling companies to consider and disclose climate risk exposure, adoption of a clear framework consistent with the TCFD’s recommendations is likely to assist significantly in enabling companies to understand the ideal scope of their disclosures and to integrate climate risk awareness into their businesses and existing (or developing) reporting systems.

Such a framework would improve the quality and consistency of information available to investors, particularly in terms of identifying vulnerable and less vulnerable companies, and particularly companies which are regarding the transition as an opportunity to improve their sustainability and attractiveness to investors.

Climate-related disclosures made as part of mainstream financial filings will not only ensure the quality of information disclosed, but also promote and normalise the inclusion and importance of this information within the corporate and investor communities in Canada, in the context of this slow evolution of regulation on the subject. Additionally, detailed and commercial disclosures will maintain and perhaps improve investor confidence, due to the ability to consider and rely on the types of information the TCFD recommends be disclosed by all sectors, including climate risk consideration at a company’s board level, how climate risks and opportunities are contemplated by the company’s strategy and its risk management processes, and the quality of the company’s methods for measuring and monitoring the impacts of those risks and opportunities on its business.

The disclosure framework would be widely adoptable across sectors, enabling clearer and more consistent comparison between companies within a jurisdiction. This is likely to assist Canadian companies and investors in carrying out effective disclosure and in understanding disclosed information despite Canada’s multiple sub-national legal jurisdictions.

Given Canada’s unique position regarding climate risks, including its large area and diverse range of likely physical climate-related impacts, and its natural-resource reliant economy, adoption of a reliable and transparent disclosure framework will be a central element in its smooth transition to a lower carbon economy and maintaining the stability of financial markets as the transition occurs.

The report recommended that federal and provincial regulators including the Canadian Securities Administrators, to endorse the TCFD recommendations, and that the Toronto Stock Exchange and TSX Venture Exchange should reference them in their reporting guidance.

The report further noted that Canada currently has limited corporate disclosure covering ‘ESG’, or environment, social and governance factors—those elements used to measure the sustainability and ethics of a business. In addition, climate change tends to be grouped under the rubric of environmental requirements, but not addressed as a stand-alone concern. It concluded that Canadian climate disclosure is “progressing relatively slowly”.

Implementation of the TCFD’s recommendations will assist the financial sector, and those areas of the non-financial sector which face additional risk exposure during and after the transition to a global lower carbon economy, to understand and act effectively upon material climate-related risks.

Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not necessarily reflect the view or position of the Responsible Investment Association (RIA). The RIA does not endorse, recommend, or guarantee any of the claims made by the authors. This article is intended as general information and not investment advice. We recommend consulting with a qualified advisor or investment professional prior to making any investment or investment-related decision.

This is Not Your Parents’ Alberta

Alberta’s Deputy Minister of Climate Change urges investors to recognize province’s changes, climate-change leadership

Lost in its image as Canada’s oil and gas production centre is the fact that Alberta – as a province and as a society – has gone through a significant change in the last decade, including establishing a world-class climate-change framework.

That’s the assessment Eric Denhoff, Deputy Minister of Environment and Parks and the Alberta Climate Change Office, provided to a standing-room-only session at the 2018 RIA Conference on June 6th in Toronto. The session was moderated by Jamie Bonham, Manager of Extractives Research & Engagement with NEI Investments, who opened with the comment that NEI was “interested in developing a greater appreciation of what Alberta is trying to do on the climate change file so that we can have a better dialogue on where we need to go next. Like any jurisdiction in Canada, there is always room to improve, but if we don’t acknowledge the genuine and substantive efforts that Alberta has made on this file we put further progress at risk. The current focus on simplistic solutions and polarized debate is just not helpful.”

Mr. Denhoff explained, “All I am asking is that people begin to see Alberta through a bit more contemporary lens. We advocate a portfolio approach to investing – not looking at individual companies but looking at Alberta as a place to invest that is, in our view, the most successfully regulated environment for companies to operate in North America.”

For example, he said, it is easy to believe an investment in an aerospace or tech firm in California is more responsible. “But you need to look at the overall portfolio, because carbon pricing on oil and gas in Alberta is much more stringent than in California even though they wave a good flag.”

Climate change initiatives

According to Denhoff, Alberta is committed to an ambitious climate-change plan that includes:

  • Eliminating pollution from coal-generated electricity by 2030
  • Ensuring 30% of electricity generation will be from renewable sources by 2030
  • Reducing methane emissions from oil and gas by 45% by 2025
  • Enforcing the legislated upper limit of 100 megatonnes (Mt) of oil sands emissions.

Mr. Denhoff said the province’s energy efficiency program – at $600 million the largest in North America – has exceeded expectations.

“We thought about 30,000 homeowners would take advantage of the support for retrofitting their homes. More than 150,000 signed up, 10% of all homes in the province”

Other provincial energy efficiency initiatives are also oversubscribed, including an aggressive Indigenous solar power initiative. Mr. Denhoff also cited the recent creation of the largest contiguous protected boreal forest in the world with the addition of more than 1.36 million hectares to the province’s parks.

Leveraging money from its carbon pricing system, Alberta is investing $1.4 billion in green and clean tech innovation projects. That includes $440 million for projects related to the oil and gas industry, $400 million in green loan guarantees, $240 million for industrial energy efficiency projects and $225 million for the development of emissions-reducing technology.

Mr. Denhoff said Alberta’s carbon pricing system provides a sophisticated combination of carrots and sticks to reward innovation and drive down emissions across 13 sectors – a significant achievement that was accomplished in only one year.

He added that the government is committed to making adjustments for firms that can demonstrate that their competitiveness has been adversely affected by the carbon pricing system. Avoiding carbon leakage – perhaps the worst-case scenario for this system – has been one of the government’s guiding principles.

Jamie Bonham noted that industry support has been critical to the success of implementing the Alberta climate change plan, but that this support has not been universal. “We have engaged with many of the leaders in the Alberta energy industry on this specific issue and see their vocal support for climate regulation as a huge positive. We would, however, like to see this commitment extend beyond the small group of leading companies and encompass the broader industry and industry associations. Success in Alberta will require that the whole industry is engaged, and constructive, in the process.”

Rolling their eyes

Addressing the issue of the federal government’s buy-out of the Trans Mountain pipeline, Mr. Denhoff said many Albertans roll their eyes when people complain about the investment.

For one thing, he said, the number of pipelines doesn’t make a difference when Alberta has legislated a 100 Mt limit on oil sands emissions.

For another, he said, the federal government has invested billions of dollars to prop up the auto industry, billions more to help companies like Bombardier and Pratt & Whitney, and projects like the Muskrat Falls power initiative, all with little or no public opposition.

“What drives Albertans a little bit crazy is that we get up in the morning and have this unbelievably regulated industry – of course we can always do more but it is way better than virtually any jurisdiction in the world – but some people are happy to import oil from corrupt states like Venezuela, Nigeria, or other failed corrupt states around the world where there are no environmental standards.”

Albertans, he said, “are expending an extraordinary amount of effort, compared to almost any jurisdiction I know of, to get it right on emissions reduction, the regulatory environment, and on climate change. They feel they’ve made a real college try and they feel they get nothing for it.”

That is why, Mr. Denhoff said, he asks investors to look at the whole picture of what Alberta is doing. “When I look around the world at who is making the biggest change, who is most committed, Alberta is right up there.”

Disclaimer
The views expressed in this article are attributable to the individuals who spoke at the 2018 RIA Conference. They do not necessarily reflect the views of the Responsible Investment Association.