Friday, May 28, 2010

Rethink Business

Mark Hurd, the Chairman and CEO of Hewlett-Packard, recently stated, “Environmental responsibility is good business. We’ve reached the tipping point where the price and performance of IT are no longer compromised by being green, but are now enhanced by it.”

In Rethink Business: How Addressing Climate Change can Improve the Bottom Line, WWF has released a report identifying benefits and challenges that arose when WWF Climate Savers companies addressed climate change. “The Climate Savers program is one of WWF’s key global platforms to engage business in climate change management. Developed in 1988, Climate Savers mobilizes companies to face the challenge of greenhouse gas (GHG) reduction and dispel the myth that sustainability is a threat to profit.”

The report goes on to say that “it is not only intended to highlight the significant impact the corporate sector can play in a transition to a low-carbon economy but it is also meant to serve as a guide for companies that are either thinking of beginning their sustainability journey or ones that have already started on the path.”

The GHG reduction strategies are not rocket science, but they have been tried and tested by leading players in the corporate world. “While the Climate Savers program has 23 members spanning multiple sectors and geographies, there is relative uniformity in the strategies that have been employed to deliver these results.”
The 7 key learnings are:
• Integrate GHG reduction strategies into the business model
• Be holistic in identifying opportunities. Reduction opportunities are throughout your entire organization and its supply chain and geographies
• Be innovative in developing solutions
• Estimate, measure and report GHGs. Treat your GHGs like financials in how they are estimated and reported to stakeholders
• Use tools to support the effort
• Develop partnerships and networks
• Influence policymakers and improve your reputation
Further to the key learnings, the report also provides 4 Canadian case studies, Catalyst Paper, The Coca-Cola Company, Fairmont Hotels & Resorts and Hewlett-Packard Canada.

In his remarks, Hadley Archer, Vice President, Strategic Partnerships, WWF-Canada, spoke to the scepticism that some people feel when asked to celebrate corporate environmental achievements. He said that while some WWF staff are doubtful at first, the commitment of the companies and the actual reductions convince them. Collectively, the Climate Savers companies deliver over 14 million tons of GHG savings annually.

The last word goes to Prof. Andrew Crane, who wrote the foreward for the report. “The greatest resource that business can bring to the climate problem is the wellspring of innovation and creativity that resides in companies across the world. To date, though, Canadian firms have yet to distinguish themselves as carbon economy innovators. I hope that the experience and wisdom distilled in this report will provide the foundation on which such a future will be built. These Climate Savers companies are leading the way. But there is still a long way to go.”

Wednesday, May 26, 2010

Lessons from the Financial Crisis

by Christie Stephenson, Vancouver correspondent

On May 19th 2010, the SFU CIBC Centre for Corporate Governance and Risk Management (CCGRM) and the Shareholder Association for Research & Education (SHARE) hosted a session entitled “Lessons from the Financial Crisis: Governance Gaps and Strategies for the Future” in Vancouver.

The event featured presentations by two highly respected corporate governance experts. Damon Silvers is the Deputy Chair of the Congressional Oversight Panel for the Troubled Asset Relief Program (TARP) and the Director of Policy and Special Counsel for the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO). Edward Waitzer is the Jarislowsky-Dimma-Mooney Chair in Corporate Governance at the Schulich School of Business and Osgoode Hall Law School, and Senior Partner at the law firm Stikeman Elliott. The event was moderated by Robert Adamson, who is the Executive Director of the SFU CIBC Centre for Corporate Governance and Risk Management.

Mr. Silvers argued for major changes in U.S. financial regulation. He called specifically for a new and independent regulator focused on consumer protection, executive compensation regulation designed to discourage excessive risk-taking, curtailing financial institutions’ leverage, credit rating system reform, and increased oversight of the shadow banking system (including tax havens, private equity, derivatives, and hedge funds).

Mr. Waitzer focused on evolving fiduciary obligations of pension plan trustees within the context of the financial crisis. Examining the impact of modern portfolio theory on fiduciary norms and behaviour, he examined what went wrong as fiduciary standards evolved, and acknowledged challenges to reform. Finally, he called for a broader view of risk management and the refining of fiduciary norms to align incentives to the interests of plan beneficiaries.

The audience at SFU’s Segal Graduate School of Business included pension funds managers and trustees, institutional investors, as well as academics. Steve Carley, the financial services analyst on Northwest & Ethical Investments’ sustainable investing team, attended the event. He noted “sessions like these are very helpful in keeping up to date on the issues related to financial services regulation not only in Canada but globally, which is critical to our work as socially responsible investors”.

Peter Chapman, SHARE’s Executive Director concluded that “the message I brought home from Ed Waitzer’s talk is that a careful rethinking of the fiduciary standard, including monitoring the funds agents and focusing on the best interests of all beneficiaries in an even-handed way, is essential if pension funds are to avoid the pitfalls of conflicts of interest, complacency about risk and complex governance challenges. Damon Silvers reminded us that the ability of investors to earn reasonable long run rates of return depends on capital markets that efficiently convert savings into productive investment, something achievable only with farsighted and effective regulatory reform. Responsible investors will recognize in both speakers’ points the central role environmental, social and governance factors play in managing risk and creating sustainable capital markets”.

The panel followed an earlier session presented by the SFU CIBC Centre for Corporate Governance and Risk Management (CCGRM) and SHARE, entitled “Global Financial Meltdown: What Lies Ahead for Corporations, Investors and Global Markets”. Mr. Adamson noted that Centre, which facilitates research and sponsors event, operates with the belief that “good governance requires an enterprise-wide view of risk management”.

Bloggers wanted for social investment conference

SRI Monitor - in a joint project with the Social Investment Organization - is looking for bloggers to write about this year's Canadian Responsible Investment Conference 2010, to be held in Toronto, June 14-16.

The idea is simple - pick a speaker or a session you'd like to write about and produce a short article (250-400 words).

The sessions include speakers on cleantech, oilsands issues, public attitudes, advisor/client relationships, divestment vs. engagement and innovations in Environmental Social Governance (ESG) research and investment management. Check the conference program for details.

Don't have much writing experience? Not to worry, we'll give you some basic training and walk you through the process. Video blogs are also welcome.

The articles will be published during the conference and distributed on SRI Monitor, the SIO's e-mail Listserve and the SIO website. The content will also be made available to interested parties free of charge and packaged as a special report when the conference is over.

If you'd like to take part as a blogger or if you are interested in distributing the content on your website, please contact project coordinator Doug Watt at

Wednesday, May 19, 2010

Canadian Boreal Forest Agreement

“Draped like a green scarf across the shoulders of North America, the boreal or "northern" forest is Canada's largest biome or environmental community. It occupies 35% of the total Canadian land area and 77% of Canada's total forest land, stretching between northern tundra and southern grassland and mixed hardwood trees. The boreal forest's animals, plants and products affect each Canadian every day, from paper products, to the jack pine railway ties, through to the air we breathe. This northern forest, named after Boreas, the Greek god of the North Wind, is an inevitable and unavoidable part of who we are.”

That’s a poetic description of our Boreal Forest from Natural Resources Canada. In a historic agreement yesterday, nine environmental organizations and forest companies represented by the Forest Products Association of Canada (FPAC)announced a pact that will lead to large scale protection of wilderness areas, protection of threatened woodland caribou and significantly higher standards for forest management in the Boreal.

Reflecting triple bottom line values, the Agreement states “the company and environmental organization signatories have chosen to work together in addressing this challenge. They will work jointly in the marketplace and on the ground with leading practices and to support governments in their task of ensuring a fully functioning boreal ecosystem and world-competitive sustainable forest industry.”

The Canadian Boreal Forest Agreement has six goals:
• World-leading Boreal ‘on the ground’ sustainable forest management practices based on the principles of ecosystem based management, active adaptive management and third party verification.
• The completion of a network of protected areas that, taken as a whole, represents the diversity of ecosystems within the Boreal region and serves to provide ecological benchmarks.
• The recovery of species at risk within the Boreal Forest, including species such as Boreal caribou.
• Reducing greenhouse gas emissions along the full life cycle from forest to end-of-product life.
• Improved prosperity of the Canadian forest sector and the communities that depend on it.
• Recognition by the marketplace (e.g., customers, investors, consumers) of the Canadian Boreal Forest Agreement and its implementation in ways that demonstrably benefit FPAC Members and their products from the Boreal.

The ENGOs involved are Canadian Boreal Initiative, Canadian Parks and Wilderness Society, Canopy, David Suzuki Foundation, ForestEthics, Greenpeace, The Nature Conservancy, Pew Environment Group International Boreal Conservation Campaign, and Ivey Foundation and the forest products companies (FPAC members) are AbitibiBowater Inc., Alberta-Pacific Forest Industries Inc., AV Group, Canfor Corporation, Canfor Pulp Limited Partnership, Cariboo Pulp & Paper Company, Cascades inc., Daishowa-Marubeni International Ltd., F.F. Soucy Inc., Howe Sound Pulp and Paper Limited Partnership, Kruger Inc., Louisiana-Pacific Canada Ltd., Mercer International, Mill & Timber Products Ltd., NewPage Corporation, Papier Masson Ltée, SFK Pâte, Tembec, Tolko Industries Ltd., West Fraser Timber Co. Ltd., and Weyerhaeuser Company Limited.

Tuesday, May 18, 2010

Shell shareholders turn down oil sands resolution

Royal Dutch Shell PLC shareholders have rejected a proposal that would have forced the energy giant to review its operations in Alberta’s oil sands.

About 94% of votes cast were against the resolution, which called on Shell to conduct a risk assessment related to oil sands investments. Shell argued that it had already considered potential oil sands-related charges in its business plans, and in a report released in March.

FairPensions, which coordinated a group of more than 140 investors and environmental groups that joined together to support the resolution, notes that 11% of shareholders refused to back management’s recommendation to oppose the resolution.

"Today sent a clear signal that shareholders are concerned about the risks associated with tar sands, and need to see greater transparency from Shell,” said FairPensions director of campaigns Duncan Exley in a news release.

“Tar sands have shot to the top of the City's agenda, and the oil companies have been forced to respond. In the wake of the Gulf of Mexico disaster, the need for investors to scrutinise companies' risk management strategies - and to recognise that environmental risks are also financial risks - has been made abundantly clear, and we hope that investors continue to press for a much greater level of disclosure from the oil majors in the future."

A similar resolution at BP’s annual meeting last month was also rejected, however 15% of shareholders did not back management’s call to vote against the resolution.

Friday, May 7, 2010

Community Power

For those of us living in Ontario and interested in socially and environmentally responsible investment options, the Green Energy Act was a game changer. We now have more insight into some small cap American companies, as well as local publicly traded micro caps. And finally, we have new community investment vehicles appearing.

One such investment is Options for Green Energy, run by Michael Labbe of Options for Homes fame. The idea is simple, and with the Options for Homes track record behind it, infinitely do-able. Each interested investor puts down $100 and signs a letter of intent to commit a minimum of $5000, in increments of $5000. Investors are then grouped into cooperatives, which invest in green energy projects. These will initially be low hanging fruit like solar and wind, with 20 year guaranteed contracts through the Government of Ontario’s FIT program. As the co-ops grow, other investments like green buildings, or novel ideas such as using prairie grass for carbon sequestration could be considered.

Already up and running with approval in the first round of the FIT program in April, Pukwis will ultimately be a joint venture between the Chippewas of Georgina Island First Nations and a community based co-operative, Pukwis Energy Co-operative. Project construction will be financed by equity raised through a co-operative share offering enabled by the Green Energy Act and by traditional commercial loans backed by a long term power purchase agreement with the Ontario Power Authority.

These are just two of many co-ops and companies getting involved in green projects. Other ideas are being tossed around, including debt financing using community power bonds and hybrid vehicles. While some of these new investments are coming from the traditional capital markets, the Green Energy Act is also inspiring new ways of raising and deploying capital, energizing Ontarians in more ways than one.

Thursday, May 6, 2010

Talisman reports on consent policy for indigenous peoples

Talisman Energy has released an extensive report exploring the benefits and challenges of implementing a corporate free, prior and informed consent (FPIC) policy for indigenous peoples.

The report, commissioned by Talisman at the request of two responsible investors, Bâtirente and Regroupement pour la responsabilité sociale des enterprises (RSSE), “concludes that the benefits for oil and gas companies of obtaining community agreement based on FPIC principles are likely to outweigh the disadvantages, despite the challenges involved with securing such consent,” Bâtirente noted in a news release.

“In light of global trends, it would be both timely and wise for Talisman to consider incorporating FPIC principles into its indigenous peoples or community policy,” the report states.

“This report confirms that FPIC principles can, and should, be part of Talisman’s indigenous peoples and local community policy,” says François Meloche, extrafinancial risks manager for Bâtirente.

“We believe this report is a cornerstone that will fuel discussions between extractive industries and indigenous peoples. Let’s hope now that Talisman will confirm its leadership in this area by improving its policies and practices in light of the recommendations of the report,” adds RRSE analyst Philippe Bélanger.

The report does not review the effectiveness of Talisman’s existing policies on indigenous peoples, although it’s been noted by Bâtirente and RSSE that the company is “ahead of the curve in terms of corporate social responsibility and transparency.”

However, the company’s operations are not without controversy. At its annual meeting in Calgary this week, Talisman hosted a delegation of Achuar elders from Peru who are opposed to Talisman's exploration activities in the Amazon River basin, according to the Calgary Herald.

“Mitchell Anderson, a representative from San Francisco-based Amazon Watch, said his group would revive memories of Talisman's involvement in Sudan if it doesn't follow through on an agreement to let the Achuar people determine whether they want drilling on their territory,” the Herald reported.

"Talisman is risking a return to the days of Sudan where their name is going to be scandalized across the international world," Anderson said.

The FPIC report is available for download.

Tuesday, May 4, 2010

Emerging markets a dilemma for SRI advocates

Financial industry website today published an article on sustainable investing in emerging markets, written by SRI Monitor's Doug Watt.

"Social awareness is on the rise in emerging economies, but environmental, social and governance factors often take a back seat to modernization."

The article, Emerging Markets a Dilemma for SRI Advocates, is part of a special report on investing in emerging markets.