Energy firms straddle the line between Canadian DEI and ESG policies and changing U.S. attitudes – Lexpert Energy firms straddle the line between Canadian DEI and ESG policies and changing U.S. attitudes – Lexpert

North American energy companies are shifting their approach to diversity, equity and inclusion (DEI) and climate risk disclosure amid evolving perspectives in the U.S., according to an article by Zena Olijnyk in Canadian Lawyer magazine. Organizations that once endorsed DEI and ESG (environmental, social and governance) sustainability investment criteria are now reconsidering their framework, as the U.S. federal government pushes back against DEI.

Canadian energy companies conducting cross-border business must stay up to date with evolving regulations in the U.S. while also ensuring compliance in Canada. To achieve a balance in their approach to DEI, companies must change the way DEI is presented. Where the core purpose holds strong, creating compelling disclosures that emphasize an organization’s business outcome is essential to endure investor scrutiny and political resistance.

Canadian public companies have increasingly integrated ESG policies over the last decade into their corporate practices. That said, there has been a notable shift in the way organizations are presenting DEI values. John Valley, Chair of Osler’s Corporate Governance practice, tells Lexpert that it is “not necessarily a retreat, but a recalibration”.

Osler’s annual Diversity Disclosure Practices report indicates large companies have typically been leaders in incorporating DEI values. Smaller Canadian issuers such as those in the junior mining and exploration sector, typically lack the resources and thus underperform larger issuers regarding diversity-related matters. “This isn’t necessarily about a lack of commitment — quite often, it’s a reflection of operational focus and scale,” John says.

Canadian disclosure requirements have driven advancement in fostering diversity in organizations. “Over the past decade, we’ve observed a growing maturity in how organizations are approaching the issue,” John says. “For a growing number of issuers, it’s no longer framed as compliance, but as an integral part of long-term business resilience.”

With significant policy changes occurring in the U.S., Canadian companies with cross-border operations are actively monitoring the environment. It appears that many companies remain committed to DEI strategies, “seeing them as ultimately value-adding, not risk-inducing.”

Read the full article by Zena Olijnyk, “Energy firms straddle the line between Canadian DEI and ESG policies and changing US attitudes,” on the Lexpert website.

Read our 2024 Diversity Disclosure Practices report