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Imperial Oil urges shareholders to reject ‘premature’ net zero 2050 carbon motion

Shares in Imperial Oil Ltd. are trading lower after it beat analyst expectations on oil and gas production but fell well short of second quarter earnings. The Imperial Oil logo is seen at the company's annual meeting in Calgary on April 28, 2017. THE CANADIAN PRESS/Jeff McIntosh. THE CANADIAN PRESS/Jeff McIntosh

Imperial Oil Ltd. is recommending investors attending its annual meeting in May vote against a shareholder resolution that it adopt a corporate wide target to achieve net-zero carbon emissions by 2050.

The motion, made by Aequo Shareholder Engagement Services on behalf of Quebec group retirement system Batirente, argues that Imperial’s current 2023 emissions reduction target is a step in the right direction but that it is also important to have a long-term strategy.

Read more: Imperial Oil reports $1.15B loss on writedown, sees pandemic-related fuel demand cut

In its notice of meeting, however, Imperial recommends voting down the proposal because, although it supports initiatives to control global warming, it is “premature” to set targets before it has a concrete plan for how to reach them.

The company says it has a portfolio of technologies at various stages of commercialization that could be employed, including the use of solvents to produce bitumen from oilsands wells with less energy and using carbon capture and storage to create emission offsets.

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It says it is intent on its current goal to reduce greenhouse gas emissions intensity by 10 per cent by 2023 relative to 2016 levels.

Read more: Big oil companies eligible for millions from federal coronavirus bailout to clean up sites

Batirente CEO Daniel Simard says all companies, especially those in the energy sector, have to align their strategies with the Paris Agreement and reduce their emissions by 2050.

“Our climate commitment as unveiled in autumn 2020, aims to both alleviate the cause of climate warming, through the reduction of GHG emissions, and mitigate its consequences, by building resilience,” he said in a news release.

“It is important for Batirente to meet its fiduciary responsibility by taking measures to optimally allocate the capital entrusted to us.”

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