Environmental, Social and Governance

We build risk assessments into our decision-making process at all levels, including listening to our stakeholders’ concerns and collaborating with our industry peers.

E&S risk management is included in the risk management element of TransCanada’s Operational Management System (TOMS), which provides the framework for how our assets are designed, constructed, operated and decommissioned to ensure the safety, security and protection of our people, property, physical assets and the environment.

TOMS outlines TransCanada’s risk management process that requires the development of project-specific risk management plans that quantify and address risks in the areas of safety, customer impact, regulatory/compliance, environment, public perception, quality of life, and direct financial risk.

Our Board of Directors’ and its committees oversee our risk management activities, which includes ensuring appropriate management systems are in place to manage our risks, and oversight of our risk management policies, programs and practices. Each committee of the Board is also involved in risk oversight in their respective areas to ensure a robust risk management process with appropriate expertise, attention and diligence given to each key business risk. For example, The Health, Safety and Environment (HSE) Committee of the Board oversees operational, safety and environmental risk, and monitors compliance with our HSE programs through regular reporting from management.

For more information, please visit the Risk and Risk Management section of our Annual Report and the Risk Oversight and Committee Responsibilities section of the 2018 Management Information circular.

TOMS is modelled after international standards such as ISO 14001 and OHSAS 18001, conforms to external industry consensus standards and voluntary programs, and complies with applicable legislative requirements. TOMS complies with the National Energy Board (NEB) Onshore Pipeline Regulations Section 6, which provides prescriptive requirements on establishing, implementing and maintaining a management system. TOMS is subject to regulatory audits against these management system requirements, with the most recent audit undertaken by the NEB in 2017. Similar legislation has also been established in Mexico where TOMS will be subject to external verification in the future.

Historically, Tier 4 (third-party) audits were conducted on TransCanada’s HSE management system on a three-year frequency, with the most recent audit conducted in 2017. The former HSE management system has been integrated into TOMS and going forward the HSE programs within TOMS will continue to be subject to Tier 4 audits on a three-year frequency.

TransCanada has an internal, multi-disciplinary team that continuously refines the company's strategy for managing climate change risks and opportunities. This group is responsible for monitoring, assessing and communicating the climate change policy and regulatory context over the near, medium and long-term. Key business risks including climate change risks are provided to TransCanada’s Board at regular meetings and the Governance Committee, which oversees the company’s approach to risk.

TransCanada operates under a low-risk and enduring business model that maximizes the full-life value of our long-life assets and commercial positions through all points in the business cycle. While renewables are the fastest growing form of new power generation, respected authorities such as the International Energy Agency forecast that oil and natural gas will continue to be dominant energy sources and a vital part of the energy mix for decades to come. Our investment in balanced and sustainable energy systems, our current asset portfolio and our future growth plans all reflect the long-term supply and demand forecasts for all forms of energy.

TransCanada understands that shareholders and other stakeholders want more information on how the company is addressing climate change and associated risks.  In response to a shareholder proposal received in late 2017, TransCanada committed to providing additional disclosure on how the company is assessing long-term risks and opportunities in relation to climate change and the current transition to a low-carbon economy. This disclosure will be provided in 2019.

As the tools available to assess the risks and opportunities associated with climate change improve, we are utilizing them in order to increase the rigour of our assessment, as a key input into our strategic planning process. TransCanada is committed to continually improve our disclosure and as such we are planning to employ the IHS 2°C Scenario in 2018 when updating our business strategy.

A core component of TransCanada’s ongoing engagement to develop long-term relationships with landowners and Indigenous communities in whose territory the company operates includes information sharing, identification of issues and efforts to address concerns. These efforts are in part, intended to avoid grievances through a proactive approach to mitigating potential grievances.

TransCanada’s preferred method for addressing the concerns of Indigenous groups and landowners is through direct and respectful discussion. Issues received or identified through ongoing engagement are systematically tracked and followed up on to promote resolution. In the event that resolution through this approach is not reached, we rely on existing regulatory and legal processes. Our goal is always to treat people fairly, using a principled approach.

Our infrastructure does not require the permanent loss of the use of land and therefore does not require the relocation of Indigenous communities, consequently the United Nations Declaration of Rights for Indigenous Peoples’ FPIC requirement, when interpreted as a veto for Indigenous groups, does not apply to our projects. While FPIC is an international reference, its status in Canada and the U.S. is a matter of legislation for government. 

TransCanada exceeds regulatory requirements for engagement in Canada and the U.S. for new projects. We endeavor to reach consent on our projects among Indigenous communities and to avoid and mitigate project-related effects on the exercise of Indigenous rights through sound environmental and project planning. We take very seriously our obligation to provide project information as early as possible and to monitor, record and follow-up on all project specific concerns.

TransCanada recognizes that consultation with Indigenous groups in Mexico is the responsibility of the federal government led by Secretariat of Energy (SENER). We continue to engage with Indigenous groups in accordance with our corporate values, Mexican legislation, and SENER process.  

TransCanada has been unable to confirm that a report was filed with the Special Rapporteur. In as much as we can’t verify the existence of said report, and by extension do not know the content, we cannot address allegations except to reiterate TransCanada’s commitment to respecting the laws of the countries in which we operate while endeavoring to surpass industry best practices.

The regulatory review process for Keystone XL includes a comprehensive review of potential environmental and social impacts and risks, both direct and indirect.  Prior to Keystone XL receiving its presidential permit on March 23, 2017, the U.S Department of State published its Final Supplementary Impact Statement in January 2014. Highlights of that report can be found at  http://www.keystone-xl.com/kxl-101/quick-facts/.

The State Department’s full impact assessment all related documents are available on the department's Keystone XL Project website at https://keystonepipeline-xl.state.gov/.

The Keystone XL project review has also included state processes in both Nebraska and Montana.  The applications and documents created throughout the review process can be found at the following websites:

Nebraska - http://www.psc.nebraska.gov/natgas/Keystone_Pipeline.html

Montana - http://deq.mt.gov/DEQAdmin/mfs/keystonexl/keystonexlcomprehensive

On September 17, 2018 the State Department announced that it will prepare a Supplemental Environmental Impact Statement (SEIS)—consistent with the National Environmental Policy Act (NEPA) of 1969—to analyze the potential environmental impacts of the Keystone XL Mainline Alternative Route that was approved by the Nebraska Public Service Commission in November 2017.

We do not expect that any supplemental environmental review will result in a delay of construction preparation activities or the actual construction activities anticipated to commence in 2019.

Based on the work undertaken for the Keystone XL project, the only state recognized tribe along the proposed Keystone XL route is the Little Shell Band of Chippewa Indians (also referred to as the White Shell Tribe).  The Little Shell Band does not have a land base, though it continues to seek federal recognition.  Studies conducted for the project did not reveal that the Little Shell Band used the proposed Right of Way and proximate lands for traditional or ceremonial purposes. Of the federally recognized tribal nations identified as potentially affected, 23 indicated that they want to be engaged (e.g. receive project information).  Of these 23 tribal nations, only two of the federally recognized tribes do not have reservations.

Information about engagement and consultation with affected tribes can be found on the State Department’s website.

Details of our Indigenous Relations activities on Keystone XL can be found in the Programmatic Agreement and Record of Tribal Contact for the project, which can be found here.

If grievances arise, we will address each Nation in accordance with that Nation’s requirements for follow up.  If the Nation requires or requests confidentiality, we will always respect that, subject to any legal requirements.

On July 5, 2018 the National Transportation Safety Board released the results of its joint investigation with the Pipelines and Hazardous Materials Safety Administration (PHMSA) into the cause of the incident. After detailed examination of the pipe, they determined that the pipeline failure was due to a crack that was most likely caused by damage to the pipe during construction.

We have closely analyzed the results of the investigation and have improved construction practices and oversight since 2010 to prevent our pipelines from being damaged during construction. Additionally, we have conducted a third-party root cause investigation of this specific incident and verified that similar issues are not present in other sections of Keystone and our other liquid pipeline systems.

The incident site has been completely cleaned up and restored to its normal condition and we continue to work with PHMSA to address any further actions required under PHMSA’s Corrective Action Order.