Organization: Viterra

Year: 2010

Description: WHEREAS: The Carbon Disclosure Project (CDP), representing 475 institutional investors and $55 trillion USD in assets, sends an annual survey to Canada’s largest 200 corporations requesting that companies disclose their climate change strategies. Over 77 percent of Canadian companies, by market capitalization, responded to the CDP questionnaire in 2009, however Viterra did not. Viterra has also failed to disclose investment-relevant information in regulatory filings concerning its greenhouse gas (GHG) emissions and the risks and opportunities facing the company in relation to climate change.
 
Corporate disclosure of climate change risks and opportunities, strategies and GHG emissions inventories are essential for investors looking to assess the strengths and weaknesses of corporate securities. While GHG emissions may present material risk of increased costs to the company’s operations related to regulatory requirements, the physical risks of climate change are also particularly material for agricultural businesses. Global food and feed production levels will be affected by climate change as floods, droughts, severe storms, adverse weather conditions increase, all of which have the potential to impact the viability of crops, and therefore Viterra’s business model.
 
In 2007, the Intergovernmental Panel on Climate Change’s Fourth Assessment Report stated that, between 1970 and 2004, agriculture contributed 13.5% of total anthropogenic global greenhouse gas (GHG) emissions. The report also stated that there was significant mitigation potential in the forest and agriculture sectors. Corporations that choose to proactively address GHG emissions and consider the risks of climate change will be better positioned for a carbon-constrained future.
 
In February 2008, the Ontario Securities Commission issued Staff Notice 51-716 to provide guidance on what issuers should be disclosing regarding environmental matters. The staff notice came after the OSC reviewed a sample of issuers and found environmental disclosure inadequate. The OSC reaffirmed that environmental risks are material to investors and that audit committees have fiduciary responsibility to review such disclosures while providing oversight of the underlying risk control framework.
 
In November 2008 the Canadian Institute of Chartered Accountants (CICA) published Building a Better MD&A: Climate Change Disclosures, highlighting the need for disclosure of climate-related risk more specifically. The CICA states that ‘…sooner or later climate change will affect, either directly or indirectly, the business operations and financial performance of many Canadian companies, large and small, in most sectors.’
 
As an agri-business company, Viterra is both affected by climate change and has direct and indirect impacts on climate change. Despite this exposure, investors are not provided with sufficient information on the risks and opportunities associated with climate change or on corporate strategies for risk mitigation.
 
BE IT RESOLVED THAT: The Board of Directors provide a report to shareholders by September 2010, prepared at reasonable cost and omitting proprietary information, describing how Viterra is assessing the impact of climate change on the corporation, the corporation’s plans to disclose this assessment to shareholders, and, if applicable, the rationale for not disclosing such information in the future through annual reporting mechanisms such as the Carbon Disclosure Project.