The chief legal, ESG and governance officer at Ontario Power Generation will chair the ESG Summit
Carlton Mathias is the chief legal, ESG and governance officer at Ontario Power Generation.
For our CL Talk podcast, he spoke about his role at OPG and trends in ESG. Mathias will chair the ESG Summit on October 30 in Toronto.
Listen to our full podcast episode here:
This episode can also be found on our CL Talk podcast homepage, which includes links to follow CL Talk on all the major podcast providers.
Below is a summary of the conversation, edited for length and clarity:
The keywords for this story are Carlton Mathias, ESG and Ontario Power Generation:
In the early 2000s, the importance of energy law was becoming evident in Canada, leading many lawyers to rebrand themselves as energy lawyers. At the time, I was practising as a commercial and civil litigator at a large Bay Street law firm and was also interested in specializing in energy law. However, rather than simply rebranding myself, I wanted to immerse myself more deeply in the field.
While I was teaching negotiation at Osgoode Hall Law School as an adjunct professor, I met the deputy minister of energy, who was looking for a lead negotiator for power purchase agreements between Ontario, Manitoba, and Quebec. He offered me the role, allowing me to both negotiate and learn the energy file. I left my partnership at the law firm and took on this contract role at the Ministry of Energy, intending to eventually return to Bay Street. After a year and a half, I did return, joining the energy and infrastructure group of a major law firm, where I truly began immersing myself in energy law.
A couple of years later, Ontario Power Generation (OPG) recruited me. I had become familiar with OPG during my time at the Ministry of Energy, and while I had always aimed to practise in-house, this opportunity came a bit sooner than expected. However, the company and the role were a great fit. I joined as senior counsel, involved in significant cases with the Ontario Energy Board. That was 15 years ago, and since then, I've continued to expand my expertise and responsibilities within the company. A few years ago, I became the chief legal, ESG, and governance officer at OPG.
I took on responsibility for ESG about four years ago. Since its inception in 1999, and even before that with its predecessor company, OPG has been committed to sustainability and corporate social responsibility. However, leadership in this area within the company was somewhat diffuse.
As corporate secretary, I led an amendment to the OPG board charter around 2020, allowing the board to take direct oversight of ESG. Prior to this, various standing committees addressed many material ESG topics, but no single committee or the board itself was overseeing ESG as a whole. This amendment created a clear structure for ESG governance.
Through this process, I recognized an opportunity for a primary lead for ESG thought leadership and reporting at the company. I volunteered to take on this role and was given the opportunity to do so, which has been a great experience.
The first challenge I encountered was explaining what ESG means. The acronym isn't intuitive, and even when spelled out – environmental, social, and governance – it doesn’t immediately convey the full scope of what ESG entails. It can feel like a corporate, head-office term, but OPG has around 11,000 employees, from shop floors in northern Ontario to offices in downtown Toronto. Everyone needed to understand what ESG is, how they were already contributing to it daily, why it matters, and why we need to keep improving.
To address this, I started by writing company-wide messages in newsletters, creating a video for our internal site, and speaking at virtual town halls and leadership forums. I also had the advantage of aligning my work with other leaders, including our president and CEO, who were educating the company on reconciliation, equity, diversity, inclusion, and climate action – three pillars central to our ESG efforts.
Another challenge has been advancing our ESG work and reporting in a consistent, measured way. There are always new "shiny" ESG topics and trends that consultants or cutting-edge literature recommend. For me, it’s crucial to strike a balance and focus on what's right for the company at any given time. This remains an ongoing effort.
In terms of corporate governance, I've observed a significant shift in how boards of directors approach ESG. Boards and executives have moved from being passive recipients of quarterly or annual ESG reports to taking a more active role in oversight and leadership. They're now asking more diligent questions, such as: What are our impacts? What do our stakeholders expect from us? How do we invest at the right pace to ensure the long-term viability of the company and create lasting value for both shareholders and stakeholders?
This shift means that leadership at the top is now actively engaged, ensuring the company adds value not only to its external context but also to employees and other internal stakeholders.
As I mentioned, reconciliation is one of OPG's key pillars. About three years ago, OPG became one of the few companies to adopt a reconciliation action plan, and we recently published an updated version in June of this year. This plan supports the Truth and Reconciliation Commission's Call to Action 92, which urges corporate Canada to contribute to a better future for Indigenous communities, businesses, and organizations.
One of the best practices we've implemented is integrating Indigenous partnerships into our ESG strategy. We focus on measuring our performance in this area and directly linking it to management compensation. For example, we track our contributions in economic benefits to Indigenous communities, the distributions made to Indigenous communities through equity partnerships, and the amount we've procured from Indigenous businesses. Our corporate balance scorecard includes threshold, target, and stretch objectives, and how we perform against those metrics impacts management compensation.
Another best practice is maintaining an ongoing, meaningful engagement with Indigenous communities that intersect with our business. We regularly engage with these communities and work to ensure they have the capacity to participate meaningfully in these interactions. These efforts are central to how we integrate Indigenous partnerships into our broader ESG strategy.
OPG has a subsidiary called PowerON Energy Solutions, which focuses on facilitating the electrification of transit and commercial fleets. As many people know, Ontario's power grid is largely clean, with most electricity generated from low-carbon sources, including nuclear and hydroelectric power – areas where OPG is a significant supplier. While Ontario's power system is both large and clean, 32 percent of the province's greenhouse gas emissions come from the transportation sector, primarily from burning fossil fuels for personal vehicles, fleet, and transit systems.
PowerON is addressing this by helping electrify transit systems, starting with long-term contracts with the Toronto Transit Commission (TTC) and other municipal transit agencies. These contracts involve building the necessary infrastructure to electrify the TTC’s bus fleet, a process that’s also happening with other transit agencies both within and outside Ontario.
In addition to transit, PowerON is working with large companies that operate vehicle fleets to help electrify their operations. This includes building the charging infrastructure needed to support the transition to electric fleet vehicles, further reducing emissions in the transportation sector.
If you are initially curious about these topics, I encourage you to pursue them and give yourself the chance to read widely. If you come across an article and find topics you think you know about or don't fully understand, dig deeper – read more. That's how I got started. I had heard the term ESG and knew a bit about it, but then I began reading, and one article led to another. I fed that curiosity by becoming an avid consumer of information.
Beyond personal reading, I attended conferences and took courses to deepen my understanding, particularly from an academic perspective. Then, I started thinking about how ESG, sustainability, and corporate social responsibility were integrated into my company's business. I asked myself if there were any gaps and whether we could do more. That led me to discuss these topics with others in the company, eventually volunteering for working groups and teams, and later taking on a leadership role.
No matter where you are in your career, you can feed your curiosity with knowledge. Look for opportunities to join working groups, contribute, and, eventually, lead in this area of thought leadership.
I believe ESG is here to stay, despite some pushback in different parts of the world. The core principles – whether you call it ESG, sustainability, or corporate social responsibility – are driven by urgent social imperatives like equity, diversity, and inclusion, as well as the undeniable reality of climate change. The effects of climate change are becoming more pronounced each year, and solutions to cool the planet must be found quickly.
These external pressures, both social and environmental, require action from individuals, businesses, and governments alike. While the terminology and focus may shift over time, the need for ongoing investment in people and resources is critical to balancing shareholder interests with long-term sustainability. Companies must ensure they are prepared for the eventual transition from voluntary ESG compliance to robust regulatory requirements, especially in the Canadian context, and continue addressing the challenges facing both people and the planet.
