Shareholders press Suncor on climate policy risk, lobbying activity

The Suncor Refinery in Edmonton is seen on April 29, 2014.

CALGARY -- Shareholders are pushing Canada's dominant oilsands player to provide more detail on two sticky topics: its plans to thrive under tougher climate policy and its political lobbying.

Separate shareholder proposals have been filed ahead of Suncor Energy's (TSX:SU) annual general meeting next month -- with one greeted much more warmly than the other by the company.

The board of Calgary-based Suncor is recommending shareholders vote in favour of NEI Investments' resolution that the company "provide ongoing reporting on how it is assessing, and ensuring, long-term corporate resilience in a future low-carbon economy" -- a move viewed as unusual.

However, the company is pushing back against a proposal by another group of shareholders co-ordinated by Sum Of Us, an organization that campaigns for corporate accountability. That one urges Suncor to report annually on its lobbying policies and procedures, the amount it's paying and to whom, and its decision-making process and oversight.

NEI decided to target Suncor on the climate proposal for a simple reason, said Jamie Bonham, who led the effort.

"We thought Suncor was the most ready for it," he said, adding that the oil company's support is "relatively unprecedented" in North America.

Suncor CEO Steve Williams has stumped for tougher carbon pricing and was one of four energy bosses to stand alongside Alberta Premier Rachel Notley last November when she unveiled the province's new sweeping climate plan, which includes a $30-a-tonne carbon tax in 2018.

Bonham said while Suncor has been a leader on the issue, "it's still a big question mark as to how such a big oilsands player is going to thrive in a low carbon future."

Similar proposals around climate risk have been endorsed by some European energy majors.

"When Shell and BP and Statoil supported the resolutions last year, it wasn't unheard of, but it was really out of the ordinary," said Andrew Logan, with Ceres, a U.S. corporate sustainability not-for-profit group.

"I can never remember it happening with an issue that was so directly related to the company's core business."

Suncor's Peter MacConnachie, who works with environmental groups and socially responsible investors, said as a result of the resolution, Suncor will be providing more detail on its plans under a number of different scenarios.

"Given the evolving conversation about climate, we believe it is a worthwhile opportunity to provide additional information to shareholders about how Suncor will succeed in a lower carbon economy," he said in an emailed statement.

NEI's Bonham said the matter is going to a vote because shareholder buy-in is crucial.

On the lobbying resolution, Suncor said it already complies with laws that require it to disclose its activity through federal and provincial online registries.

Sum Of Us enlisted three shareholders with a collective $70,000 in company stock to file the proposal.

Lisa Lindsley, who manages shareholder advocacy campaigns at Sum Of Us, said the shareholders had a few conversations with Suncor, but came away unsatisfied.

The shareholders wanted to draw more attention to the trade associations to which Suncor belongs. The resolution cites "reputational risk" if one of those groups finds itself embroiled in a scandal or if its agenda runs counter to Suncor's stated green goals -- a trade group lobbying against stricter environmental rules, for instance.

"Really what they offered was to list all the trade associations and organizations to which they pay over a certain threshold amount," said Lindsley.

"We didn't think that that really got to the information that shareholders needed to evaluate the risks of Suncor's political spending."

MacConnachie, with Suncor, said the company doesn't see how that additional detail would help investors make better decisions, given that those associations are bound by the same lobbying disclosure laws.

Kevin Thomas, with Shareholder Association for Research and Education, worked with investors in pipeline heavyweights Enbridge Inc. (TSX:ENB) and TransCanada (TSX:TRP) to push for improved lobbying disclosure and ended up working out a deal in both cases.

The Enbridge proposal was made on behalf of the Pension Plan of the United Church of Canada, while the TransCanada one was for the Fonds de Solidarite des travailleurs du Quebec. Both were withdrawn.

Thomas said relying on registries alone means some activity will "fall under the radar."

"I don't think it's reasonable to expect investors to go and search every provincial, municipal, federal and other country levels to understand what their own company is doing."