Imperial Oil is under pressure to disclose its water-related risks to shareholders, yet the company maintains that it is already doing enough to be transparent.
SHARE, a Canadian leader in responsible investment services and research and Fonds de Solidarité des Travailleurs du Québec (FTQ) filed the request seeking disclosure of comprehensive, comparable, meaningful, and measurable information about Imperial’s exposure. Specifically, they demanded that the company report its water risk using either the Carbon Disclosure Project (CDP) methodology and platform or through the company’s own reports.
SHARE and the FTQ argue that water is integral to Imperial Oil Ltd.’s operations. “As one of the largest oil producing and refining companies in Canada, Imperial’s reliance on water withdrawals and high volume of wastewater production expose the company to potential physical, regulatory and reputational water-related risks across its business segments,” stated the proposal.
The proposal calls on Imperial to:
- provide facility-level data on water withdrawals, discharges, and sources of water;
- report the company’s water-related risk assessment procedure, coverage, scale, frequency, and timeframe considered;
- document the degree of the company’s exposure based on the potential scale of changes to its business, operations, revenue or expenditures and the proportion this represents of total operations companywide;
- increase the level of direct responsibility for water within the company;
- Integrate water into the corporate business strategy;
- set clear goals and guidelines for action; and
- develop company-wide targets (quantitative) or goals (qualitative) related to water.
The company has requested that shareholders and management vote on the proposal on April 27th, as stated in a Notice document, however, the board “recommends voting AGAINST this proposal.”
The board noted that Imperial identifies and manages water resource risks through its Operations Integrity Management System (OIMS).
SHARE noted that Imperial currently reports its overall freshwater consumption and freshwater consumption intensity, but does not provide shareholders with localized or facility-level information, or information about withdrawals and discharges. Some information is available through regulatory bodies, but this does not give a comprehensive picture of the company’s water use and impacts across all operations.
In 2017, many of the company’s peers responded to the CDP water questionnaire, including Cenovus Energy and Husky Energy. The CDP’s water information request, backed by 643 investors with over US$67 trillion in assets, helps investors assess the risks a company’s operations may pose to ecosystem and community health, as well as the water management policies and practices that help mitigate these risks.