The Canada Energy Regulator and ESG – Research conclusions

This analysis found that the CER and ESG both inform decision-makers and other stakeholders interested in ensuring that energy companies perform responsibly with respect to people and environment. However, both have different intentions, mechanisms, audiences, and responsibilities.

This analysis also found that the emergence in widespread ESG reporting has not uncovered deficiencies or gaps in the way that the CER operates. The increasing consideration of ESG in financial markets indicates investors and stakeholders recognize that ESG performance may enhance a company’s competitiveness. Often, when investors are using an ESG lens in their decision-making, they start with the ESG profile of the country in which a company operates then the industry’s ESG profile before looking at the ESG profile of the company itself. The CER contributes to the Canadian energy industry’s ESG profile by being an effective, transparent, and trusted regulator. The CER holds companies accountable for the safe operation of CER-regulated energy infrastructure. CER oversight includes requiring regulated companies to protect the environment, consider Indigenous Peoples, consider social and economic issues, and demonstrate good governance. Considerable information that the CER gathers through these activities is available to Canadians on the CER web site, including in the Pipeline Profiles.

The CER’s regulatory framework is robust, thorough, and evolves based on changes in policy, best practices, and input from stakeholders and Indigenous Peoples. Currently, the CER does not need to change its regulatory processes and standards to respond to ESG trends. Given there are already numerous frameworks providing guidance on ESG disclosure, and the current differences between ESG disclosure and the CER’s reporting granularity and data detail, the CER does not plan to develop a jurisdictional ESG standard or mandate specific ESG reporting standards for CER regulated companies. As ESG evolves, the CER will continue monitoring the ESG space, adjust approaches as required, and share information with its stakeholders, Indigenous Peoples, and Canadians.

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