Wednesday, October 27, 2010

2010 Clean Capitalism Report

A webinar today launched the 2010 Clean Capitalism Report, a joint initiative of Corporate Knights and the Delphi Group. The report includes an analysis of the ESG status of S&P/TSX 60 companies, benchmark rankings, and best practice highlights.

The intention of the report is to provide companies, regulators and investors with data and analysis to help drive sustainability performance for leading companies in Canada. Data was collected on 13 indicators in 4 categories, Environmental, Social, Governance and Transparency.

Toby Heaps of Corporate Knights summarized 3 core takeaways from the report, all of which are ‘encouraging’:
• companies who do not have sustainability formally embedded in their governance structure are now in a minority
• linking compensation to sustainability performance is mainstream and deepening
• disclosure of core environmental metrics is approaching critical thresholds, increasingly driven by investors

However, one of the most distressing findings was that 41 of these 60 companies do not have a single visible minority or Aboriginal on their Board. To the extent that Boards have any diversity at all, it is the presence of a few women. Steven Pacifico, Delphi’s Manager of Stakeholder Relations and Sustainability, got props for highlighting this result and pointing out that “these numbers are low and not representative of the Canadian multicultural landscape.”

An interesting discussion took place regarding the lack of consistent and comparable data. Melissa Shim of Corporate Knights stated at the beginning of the webinar that there were data limitations regarding comparability and consistency particularly for indicators that fall under voluntary disclosure. Steven Pacifico said there was “…a real need for standardization of metrics, especially for the investor community. This will make it easier for the people who seek out this information to be able to analyze it, and push for performance improvement.” Toby Heaps added that work was being done on this front, notably the International Integrated Reporting Committee, a joint venture of the Prince of Wales’ A4S (Accounting for Sustainability) project and the GRI.

While transparency is a worthy goal, Ted Ferguson of Delphi identified the thorny issue of how to reward transparency, but still acknowledge the poor results that are being revealed – “a tension that will be here for a while”
Ted Ferguson concluded the call by suggesting that we are seeing “a shifting of greater responsibilities and higher expectations onto the corporation as part of the social contract.”

The 2010 Clean Capitalism Report is the first edition of an annual ‘yearbook’ tracking sustainability performance and trends for the S&P/TSX 60 companies. To order the report, please contact Sue Barrett of the Delphi Group.


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