LYTLE: Too much information, just not the right information

Following the spectacular scandal of the BreX Mining collapse, red-faced Canadian Securities regulators upgraded the various policy documents that governed the public disclosure of mining resources and reserves. The resulting policy is known — boringly — as National Instrument 43-101.Still, beyond being a source of my income for many years, it provides the needed clarity and transparency of important investor information. In it's tedious, nit-picking, polysyllabisms, it is actually a shining example of appropriate securities regulation.In my experience, sadly, industry players are less interested in negotiating “appropriate” and more interested in just being given ground rules and boundaries, however inappropriate. Which brings me to when the current federal government tabled Bill C-69 to replace the National Energy Board Act in 2018, the pipeline and mining industry lobby groups just rolled over and said,“Yup! Sure! We can live with this!”Really? They could live with legislation that allows non-independent government agencies to repeatedly extend review period deadlines without legal or legislative recourse? They could live with environmental review processes that were poorly defined? I once asked a vice president of a pipeline company why, as the payer of almost $20 million of the regulator’s annual operating costs, the company did not demand some cost reductions. I was told that the company was happy that the regulator had “enough staff to deal with our applications.” Ok, but as a shareholder I was not happy with management throwing away $20 million on unnecessary regulatory overhead. But there it is. Industry players don’t like confrontations with governments. To me their behaviour is comparable to the obsequious tendency of a dog I know to roll onto her back at the slightest sign of aggression.The issue that brings all the foregoing to mind is the public comment period for the proposed National Instrument 51-107; Disclosure of Climate-related Matters. Also boring but in no way appropriate. Apparently, investors are increasingly confused by the lack of or confusing nature of public disclosure by reporting companies related to their climate sins.According to the company Power Sustainable,“The only way to attract significant capital to Canada over the long term is to provide investors with clarity and transparency regarding the sustainability of their investments.”I wonder if the Chinese, Russians, Brazilians, Americans or pretty much anyone else feels similarly and is demanding clarity and transparency about the sustainability of their investments? Power Sustainable doesn’t define “sustainability” so it is hard to know. As one who dug deep into the concept of sustainability and who has given peer-reviewed papers at “sustainability conferences” I can assure you that there is no definition of sustainability. It is like “democracy”. Everyone is concerned about it, but no one knows what it means.As an investor then, what does NI 51-107 ask for on my behalf? The best I can determine is that it seeks full disclosure of all carbon-producing sins and the “meaningful steps the company is taking towards Canada’s net zero economy”. But what if, as an investor, I could care less about meaningful steps towards Canada’s net zero economy because soon Canada will figure out that CO2 is a good substance and will stop the nonsense about a net zero economy?For all those public companies that covet the few bucks I can put into their treasuries, here is what I would like to see disclosed on their NI 51-107 reports;1. A clear instruction that it will avoid making a climate plan and intends to make no progress towards net zero. As explained in the appeals decision of Mathur v. Ontario, any climate plan becomes immediately subject to the Charter so there is no incentive to make such a plan.2. A statement that the company values green stuff and out of deference to our fibrous friends will do nothing to reduce the production of CO2 in order that all may live.3. If your company installs windmills, I will want to know how many birds you will kill each year.4. If your company installs solar panels, I will want to know how you intend to dispose of spent panels and how many acres of food producing land you are sterilizing.This disclosure will be easy for the companies, and it satisfies my need for investor knowledge. We don’t need National Instrument 51-107 as, without it, companies will gain more investment and incur less risk of Charter challenges.

LYTLE: Too much information, just not the right information

Related Stories