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"If a company’s financial viability is dependent on scope 3 emissions being released — as is the case with Enbridge — then it is critical that investors have a full and complete picture of these emissions," the proposal states.

The term "Scope 3" refers to emissions that a company is indirectly responsible for, such as the greenhouse gases generated when a customer uses the company's product.

Most major Canadian energy firms currently disclose the emissions they produce themselves in their day-to-day business operations, but have been far more reluctant to take accountability for end-use emissions, such as those produced when consumers burn fossil fuels in their cars.

Including Scope 3 emissions in their climate disclosures would massively increase the size of the carbon footprint that energy companies must report to investors and the public.

Enbridge itself currently discloses the Scope 3 emissions produced by its natural gas utility business, by tallying the emissions generated when customers burn natural gas to heat their homes.

But it doesn't provide an accounting of the end use of the fossil fuel products it transports in its pipeline business.

Duncan Kenyon, director of corporate engagement with Investors For Paris, said that's a problem because shareholders need to know whether the company's portfolio is aligned with a future that will increasingly depend on renewables and other forms of clean energy.

"Many shareholders actually understand that Scope 3 isn't just a greenhouse gas reporting metric, it's actually a trend metric showing where the company is going in terms of adopting and responding to the energy transition," Kenyon said.

"It's a metric that highlights the exposure risk of the company to energy transition."

Scope 3 emissions are an increasing area of focus for shareholder proposals. In the past two years, according to a database by Ceres, an organization which tracks climate-related shareholder resolutions, more than 30 proposals related to Scope 3 disclosures have been brought forward at the general meetings of major North American publicly traded companies.

Investors for Paris brought a similar resolution to Enbridge's annual meeting last year, at which time approximately 25 per cent of shareholders voted in favour of the company adopting more extensive Scope 3 disclosure practices.

In its response to this year's proposal, Enbridge said it is currently unable to accurately and reliably track third-party use of the oil and natural gas it transports for customers.

The company said it takes Scope 3 emissions seriously, and in 2021 began reporting the "emissions intensity" of the energy it transports via pipeline. But it said there have been no clear regulatory guidelines or widely accepted methodologies developed to report on end-use emissions from products that Enbridge moves, but doesn't own.

"We will proceed with further enhancements to our Scope 3 reporting where accepted definitions for our business exist and decision-useful data is available," the company said.

In urging shareholders to vote against the proposal, Enbridge also warned investors to be wary of environmental activists who acquire shares in a company in order to bring forward a proposal solely for the purpose of campaigning for change.

"Shareholder proposals have become part of the toolkit employed by certain environmental activists to gain publicity in pursuit of their objectives," the company stated.

Enbridge's annual general meeting will be held May 8.

This report by ¹ú²úÓÕ»ó¸£Àû was first published March 13, 2024.

Companies in this story: (TSX:ENB)