Oil and natural gas pipeline companies have long been a target for environmentalists’ ire — think of the Keystone battle, as well as protests from Ecuador to Nigeria.
Those companies appear to have cleaned up their acts, according to a big Canadian bank, to the point that sustainability investors are taking a fresh look.
Companies such as Enbridge Inc. and TC Energy Corp. have “impressive” safety records and small environmental footprints, according to the National Bank of Canada, Bloomberg reported. The two companies topped the National Bank’s ranking of companies meeting environmental, social and governance measurements. Inter Pipeline Ltd. also got a positive mention, Bloomberg said.
The favorable rankings are a turnaround from a few years ago, when the companies were the subject of heavy criticism due to the construction of TC Energy’s Keystone XL pipeline as well as the Trans Mountain project. Plans for both pipeline systems rallied environmental protesters and faced long delays. The lines transport oil from Alberta’s oil sands. But National Bank analyst Patrick Kenny wrote in his report that their performance has been solid, with 99.99% of volumes transported without a spill.
“As more companies comply with globally recognized environmental reporting standards and establish attractive ESG goals, we anticipate increased fund flows from sustainability investors,” he said in a note this week. Kenny said that pipeline companies can boost their ESG rankings and attract new investors by improving board oversight and the companies’ relationships with indigenous populations.
The pipeline sector has lagged the sustainability efforts of other parts of the energy industry — specifically power companies and utilities, the National Bank report said.
- BlackRock Inc., the world’s largest asset manager, last month said it would put sustainability at the center of its business, and the announcement may motivate energy-pipeline companies to improve their ESG reporting, Platts reported, though some industry experts said that it may not make much of a difference.
- At the World Economic Forum in Davos, Switzerland, last month, the leaders of many of the world’s largest companies advocated the development of a core set of ESG metrics and disclosures.