A coalition of 49 investors with $2 trillion in assets call on newly formed association of producers to set specific goals for improving environmental and social performance.
SocialFunds.com — Sustainable investors have been prominent among stakeholders raising concerns about the environmental and social impacts of oil sands development in Canada. Both extraction and the fuels produced emit significantly higher greenhouse gas (GHG) emissions that conventional extractive technologies, so much so that Canada is increasingly unlikely to meet the emissions reduction targets it agreed to in the Kyoto Protocol.
Decried by Environmental Defence as “the most destructive project on Earth,” oil sands extraction also requires unsustainable rates of surface and groundwater withdrawal, and leaks approximately three million gallons of contaminated water into surrounding rivers and groundwater each day. Furthermore, photos of oil sands extraction sites illustrate the environmental destruction caused by “the largest industrial project on Mother Earth,” which has been described as “a slow industrial genocide” by First Nation communities located downstream from the sites.
As a response to these many concerns, 12 major oil sands producers formed Canada’s Oil Sands Innovation Alliance (COSIA) earlier this year. Its members have committed to establishing “structures and processes through which oil sands producers and other stakeholders can work together for the benefit of the environment.”
Ceres announced this week that a coalition of 49 investors representing some $2 trillion in assets under management have delivered an investors’ statement of expectations to COSIA, calling on the oil sands producers to set “specific goals for improving environmental and social performance along with detailed plans for achieving them.”
The investors recommended that COSIA members reduce GHG intensity in their operations “to at least that of conventional oil production,” and to do so not by the purchase of offset credits but by actual emissions reduction. Specific goals and timelines should also be set for minimizing water withdrawals and maximizing recycling, while ensuring that the proposed Lower Athabasca Regional Plan (LARP) also address water contamination as well.
“However,” the investors observed, “we are skeptical about whether these concerns can be adequately resolved while oil sands development continues on its present trajectory.”
Canadian law requires full land reclamation for all oil sands sites, but “the rate of reclamation has not kept pace with the rate of land disturbance and it is unlikely that this trend will reverse as oil sands production grows,” the investors warned. Furthermore, the cost of reclamation could be as high as $33 billion by 2025; “the Alberta government is not obtaining sufficient financial security for reclamation liability for mining projects, leaving Albertans and potentially investors vulnerable to major financial risks.”
With regards to First Nation homelands affected by environmental contamination and social upheaval, the investors called on COSIA members to “fully incorporate the principle of Free, Prior, and Informed Consent in their relations with First Nations, Metis, Inuit, and other communities affected by oil sands operations…and immediately address any impacts of oil sands development on their health and livelihoods.”
“Investors are dissatisfied with the status quo in Canada’s oil sands,” Mindy Lubber, president of Ceres, said. “Oil sands companies must listen to their investors and substantially improve their environmental and social performance. Investors are telling these companies to prioritize these critical issues before they embark on aggressive growth plans.”
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