Assess Impact of Climate Change on Company
2010 – Great-West Lifeco Inc.
WHEREAS: In 2007, the Intergovernmental Panel on Climate Change’s Fourth Assessment Report stated it is “very likely” that anthropogenic greenhouse gas emissions have heavily contributed to global warming. Furthermore, “there is substantial economic potential for the mitigation of global greenhouse gas emissions over the coming decades that could offset the projected growth of global emissions or reduce emissions below current levels.”
Studies on the impact of climate change to life and health insurance companies continue to mount. In 2009 alone, a report from Health Canada, and studies in peer reviewed journals such as Environmental Health Perspective, and the Lancet have linked health impacts to climate change. More importantly, a November 2009 report (Managing the Unavoidable) found companies and their investors were focusing too much on the catastrophic impacts of climate change rather than on the slower, but more likely incremental impacts.
Several members of Great-West Lifeco’s Board, and the CEO of Great West Life Assurance, supported the Canadian Council of Chief Executives’ climate change policy statement which stated “we share the goal of slowing, stopping and reversing the growth of global greenhouse gas emissions (GHG) over the shortest period of time that is reasonably achievable.” Great-West Lifeco must therefore believe climate change to be a material risk to the company.
The Ontario Securities Commission (OSC) recently reviewed MD&As and found reporting on material environmental risks was poor; in particular, they found company analysis of how such risks impact financial performance was inadequate. Corporate disclosure of climate change strategies and GHG emissions inventories are essential for investors looking to assess the strengths and weaknesses of corporate securities. While Great-West Lifeco has a relatively limited operational footprint, significant exposure to climate change risks and opportunities are embedded through insurance policies, investments and real estate holdings.
The Carbon Disclosure Project (CDP), the largest investor coalition in the world representing 475 institutional investors, sends an annual survey to Canada’s largest 200 corporations requesting companies disclose their climate change strategies. While Great-West Lifeco’s peers (such as Manulife, Sun Life and Industrial Alliance) all responded to the CDP in 2009, Great-West Lifeco declined to participate for the sixth year in a row.
The National Association of Insurance Commissioners, in the United States, now requires climate change disclosure from insurance companies domiciled in the USA. Great-West Lifeco has several subsidiaries domiciled in several states and will be required to provide this type of information.
In 2009, shareholders signalled the need for increased disclosure on climate change as over one-third of non-controlling shareholders voted in favour of an identical proposal.
BE IT RESOLVED THAT: The Board of Directors provide a report to shareholders by October 2010, prepared at reasonable cost and omitting proprietary information, describing how Great-West Lifeco is assessing the impact of climate change on the corporation, the corporation’s plans to disclose this assessment to shareholders, and, if applicable, the rationale for not disclosing such information in the future through annual reporting mechanisms such as the Carbon Disclosure Project.