Canadian Lawyer

March 2022

The most widely read magazine for Canadian lawyers

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40 www.canadianlawyermag.com FEATURE ENERGY AS OIL and gas companies in Canada face growing pressure from shareholders and other stakeholders to focus on sustainability and renewable energy initiatives, legal depart- ments are leading the way in navigating the evolving regulatory framework and helping their organizations achieve targets. "ESG is very much becoming table stakes for participation in the economy right now, and to the extent that you're not taking that seri- ously, your competitors will be, and you'll be left behind," says Thomas McInerney, a partner in the Calgary office of Bennett Jones LLP. "Oil and gas companies might be responding to demand for sustainability and ESG initiatives from stakeholders and inves- tors," says Nicole Bakker, a lawyer at the Calgary office of Blake, Cassels & Graydon LLP. "We are also seeing responses to govern- ment policy and legislation that is increasingly focused on emission reduction." In-house legal departments must identify the risk management framework associated with each new project and the applicable legislation. They have the crucial role of reviewing new legislation and government initiatives as they are released and assessing the impacts and the opportunities those poli- cies and government initiatives may bring for their organizations, Bakker says. Legal departments also support corporate initiatives, helping their organizations with technology agreements and the buying and selling of assets. "Even if you don't have immediate emis- sion reduction requirements, you are being asked by shareholders and other stake- holders to demonstrate how your company is changing and really open to the broader context of ESG," says McInerney. One potential challenge energy compa- nies must consider is the availability of emis- sion offset credits required to achieve targets as demand for these credits continues to rise. Demand may outpace supply in the coming years, Bakker warns, so organizations must think about how they can achieve voluntary emissions reduction targets. According to Alan Harvie, a partner in the Calgary office of Norton Rose Fulbright LLP, energy companies must also be wary of "greenwashing," which can damage their credibility. "You hear companies saying they are going to be 'net zero,' but they don't actu- ally say what they mean by 'net zero,' " says Harvie. "Are they making legally binding promises in their sustainability reports that really should be regulated by securities laws? There is a lot that has to be considered." He adds that clarifying which sustain- ability standards the company is measuring itself against is essential, while public compa- nies must also be careful to comply with disclosure obligations in securities filings. Calgary-based energy giant Enbridge Gas is one of Canada's most prominent players in the renewable energy sector, with a diverse portfolio including wind projects in North America and Europe and renew- able natural gas projects in the U.S. Since the company's initial investment in a wind farm in 2002, Enbridge has committed more than C$8 billion to renewable energy and power transmission projects currently in operation or under construction. Among its goals, Enbridge strives to reduce the Legal teams are navigating a complex regulatory framework for oil and gas companies as they boost ESG efforts to meet shareholder demands Leading the way to renewable energy growth

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