Bank Activist Group Shuts Down, Cites Limits of Climate Push

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(Bloomberg) — A shareholder activist group in Canada is shutting down after concluding that investor pressure alone isn’t enough to meaningfully influence financial and energy firms to address climate risks.

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Investors for Paris Compliance, also known as I4PC, was created five years ago with a plan to review corporate environmental filings and use shareholder proposals to call on banks, insurers and oil and gas companies to provide more detailed disclosure on carbon emissions and outline credible net-zero transition plans. 

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This week, the group said it will cease operations, noting that it believed “investor accountability has reached its limits.”

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“It was a different time. There was a slew of net-zero announcements coming out seemingly every day from corporate Canada,” Matt Price, I4PC’s executive director, said in an interview. But momentum has since slowed. “There are only so many times you can ask and you get the same reply, which is, ‘We’re not going to do anything.’” 

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The activist group, which is funded by donations from philanthropic foundations, reported what it described as incremental wins, including better disclosures. But shareholder support for its proposals tended to top out at about 20% to 25%, with backing from some pension managers concerned about climate change. 

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Most large investors rely on proxy advisory firms, which tend to recommend voting against climate proposals, according to Price.

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“That’s part of the inertia in the system,” he said.

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Climate initiatives have faced political backlash — particularly from US Republicans — in the years since I4PC began its work, it said in a document explaining the reasons behind the decision to shut down. 

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Some state officials have threatened litigation or restrictions on working with financial institutions seen as hostile to the fossil fuels industry. After US President Donald Trump’s reelection, major Wall Street and Canadian banks exited the industry’s largest climate-finance alliance.  

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Trump’s trade war has reignited Canadian interest in expanding natural resource development, including crude oil and natural gas, and the conflict with Iran and resulting energy shock have further turned companies’ focus away from net-zero concerns, I4PC said.

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“Investor accountability can surface issues, improve transparency, and generate incremental progress,” the group said. It added that broader, faster change requires stronger legal and regulatory action.  

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Canada’s bank regulator and the provincial securities regulator in Quebec have introduced climate risk disclosure and scenario-analysis requirements, while other authorities have been slower to act, Price said. 

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“They’re going to need to use stronger tools,” he said. 

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Price said he and the small group of climate campaigners behind I4PC would take time to regroup but plan to advocate for stricter laws and regulations in new initiatives.

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—With assistance from Olivia Raimonde.

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(Updates with details on the group’s future plans in the final paragraph. An earlier version corrected the province referenced in the third-last paragraph.)

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