A voice for change? Capital markets as a key leverage point in Canada's fossil fuel industry

Canada as an oil and gas producing nation will play a definitive role in the transition to a carbon-constrained world. Yet, Canadian climate policy continues to prop the ailing oil and gas industry with supply-side policies that enables the continued expansion of fossil fuel production. This study examines the role of financial actors as high-leverage intervention points that may be used to limit the production and expansion of Canada's fossil fuel industry. Using a combination of network modelling, sensitivity analysis, and a novel scoring tool, we find that equity ownership in Canada's largest fossil fuel firms is increasingly concentrated among a small subset of predominantly foreign and corporate equity owners. Moreover, the high debt load of fixed assets make Canadian fossil fuel firms particularly sensitive to shareholder intervention. The findings suggest that prominent shareholders are unlikely to use their voice to curtail carbon emissions in Canada's fossil fuel industry, unless mandated to do so. Thus, the study concludes with important policy insights, to drive effective decision making and change.