THE GALLON ENVIRONMENT LETTER
Canadian
Institute for Business and the Environment
Fisherville,
Ontario, Canada
Tel. 416
410-0432, Fax: 416 362-5231
Vol. 16, No. 5, August 30, 2011
Honoured Reader Edition
This is the honoured reader
edition of the Gallon Environment Letter and is distributed at no charge: send a
note with Add GL or Delete GL in the subject line to
subscriptions@gallonletter.ca. Subscribers receive a more complete edition
without subscription reminders and with extensive links to further information
following almost every article. Organizational subscriptions are $184 plus HST
nd provide additional benefits detailed on the web site. Individual
subscriptions are only $30 (personal emails/funds only please) including HST. If
you would like to subscribe please visit http://www.cialgroup.com/subscription.htm If you feel you should be receiving the paid subscriber edition or have
other subscriber questions please contact us also at subscriptions@gallonletter.ca. This
current free edition is posted on the web site about a week or so after its
issue at http://www.cialgroup.com/whatsnew.htm. Back free editions from January 2009 are also
available.
****************************************************
ABOUT THIS
ISSUE
Our theme this issue is reporting of Corporate
Social Responsibility. We look at a number of recent corporate CSR reports,
highlighting advanced aspects, as well as at the environmental guidelines of the
Canadian Securities Administration for public companies. We look particularly at
the issue of materiality, a poorly defined and somewhat abused but extremely
important aspect of corporate environmental reporting, and integrated reporting,
an approach which we recommend wherever and whenever it is practical. Corporate
Social Responsibility Reporting may sound like a dry topic but by keeping our
articles short and focussing on company activities we have done our best to make
it interesting. Let us know what you think by sending a Letter to the Editor to
editor@gallonletter.ca. No need to make the format fancy - a normal email is
good enough to be a Gallon Environment Letter to the Editor! We'll publish a
selection of those received.
This issue also comments on the abuse of
Sustainable Development terminology, and proposes a solution. We look at waste
management from the Netherlands and comment on a recent ad agency claim that, in
Canada, "environment has fallen off the radar". We also suggest you take a look
at more Gallon Environment Letter news and commentary at our new GallonDaily
publication at www.gallondaily.com.
Our next issue will likely take a look at CSR
and the Supply Chain, a topic that we plan to make much more interesting than it
sounds!
****************************************************
Editorial: REDEFINING SUSTAINABLE
DEVELOPMENT
Since the World Commission on Environment and
Development popularised the term Sustainable Development in 1987 there have been
many more attempts to redefine the term than there have been to support what the
Commission originally intended.
The Commission, often known by the name of its
Chair, Gro Harlem Brundtland, defined Sustainable Development as:
"Development which meets the needs of the
future without compromising the ability of future generations to meet their own
needs."
In that definition, on which we can be sure
that the Commission of 22 people spent much time in discussion, there was
nothing allowing for time limits, or reliance on future technologies not yet
invented, or on giving priority to immediate economic well-being over future
environmental security. However, the Commission made it clear that poverty is a
major contributor to environmental degradation and that we must address poverty
issues if we are to build a new global economy based on a platform of
Sustainable Development.
Today we have national and international
opinion leaders discussing such topics as sustainable mining, sustainable oil,
and sustainable coal. The Dow Jones Sustainability Indexes list more than 1200
companies, many of which will almost certainly not be around in 10 years let
alone providing goods and services to future generations. Clearly Sustainability
as defined by Dow Jones and many others has very little to do with Sustainable
Development as defined by the Brundtland Commission.
This presents at least two dilemmas. First,
should we state that the term Sustainable must only be applied to actions which
can be maintained at their current intensity for at least seven generations?
Should society tell those industries that are reliant on non-renewable
resources, such as those represented by the Mining Association of Canada, that
they must not describe their activities as Sustainable and that to do so
constitutes misleading advertising?
Second, how do we persuade our industry and
government leaders to give priority to more sustainable opportunities for job
creation and economic and social development. The current Keystone Pipeline,
against which several thousand activists are currently protesting in front of
the White House, is a case in point. Construction of the most technically
advanced and hence reportedly the safest pipeline in America is said to be going
to create 20,000 short term jobs, linking Canada's oil sands to Gulf coast
refineries and terminals. The company planning to build the controversial
pipeline is listed on the Dow Jones Sustainability Index. Building the pipeline
is unlikely to significantly increase US consumption of petroleum products and,
despite arguments to the contrary, not building the pipeline is unlikely to
substantially shut in tar sands oil as the Canadian government will almost
certainly help Canadian producers ensure that their products have a path to
market. My question: how does building, or not building, the Keystone Pipeline,
contribute to Sustainability?
The problem seems to be that Sustainable
Development has been shortened to Sustainability and we now apparently consider
the two terms to be synonymous. GallonLetter's proposal is that the two terms
need to be disentangled. Members of the World Commission on Environment and
Development could issue a declaration that Sustainable and Sustainability are
not appropriately used as shortened version of the term Sustainable Development
and that the term Sustainable Development is only to be applied to activities
that fit the original Commission definition. Mining and other non-renewable
resource activities might then continue to be described as sustainable if they
offered a small but significant improvement in environmental and social
responsibility, something we all want to encourage, but they would not be
Sustainable Development, because, truly, they cannot be. Describing mining and
pipelines and other such activities as Sustainable Development, when they cannot
possibly fit the definition originally presented in 1987, would constitute
misleading advertising and could be prosecuted as such in all countries which
have laws to ensure honesty in the marketplace.
Like all humans, I am not Sustainable
Development though I hope I make a contribution to Sustainability.
Colin Isaacs
Editor
****************************************************
CSR
REPORTING
It is only a couple of decades past that the
business sector talked about environmental reporting, providing stakeholders and
shareholders with information about their environmental footprint. A few years
after the Brundtland report was published it became fashionable in business
circles to talk about Sustainable Development reporting. Until recently, few
companies actually did it but many claimed Sustainable Development credentials
for their annual environmental reports. Sustainable Development reporting
covered environmental, economic and social indicators, though environmental and
economic aspects were usually the only aspects to include much numerically
rigorous data. Then companies switched to Corporate Social Responsibility
reporting and today many of the companies disclosing environmental, social, and
economic data are doing so under the rubric of CSR. Notwithstanding the business
world's apparent preference for CSR, most of the major corporate reporting
systems in use today still consider themselves to be reporting systems for
Sustainability. That's the framework that is the theme if this issue of
GallonLetter.
****************************************************
EDC: CLIMATE
CHANGE
Export Development Canada, Canada's export
credit agency which has in the past been criticized for providing financing
to projects considered by some to be environmentally unsound, released its 2010
CSR report this month. One of the key initiatives for 2010 was revising the
framework for environmental and social risk. (1) The framework now includes
addressing climate change.
Among the uses of the framework
include:
- helping EDC clients understand and assess
carbon and climate risks and opportunities
- evaluating risks of climate change at the
project level
- ensuring project design incorporates
technically and financially feasible and cost effective options for mitigation
and adaptation to climate change.
- requiring proponents of Category A and B
projects (A is the category with the highest environmental and social risk) to
provide estimates of greenhouse gas emissions, consistent with International
Finance Corporation Performance Standards and using established methodologies
such as the Greenhouse Gas Protocol.
(1) The framework is called Environmental
Policy, Environmental and Social Risk Management Framework Review Directive and
Disclosure Policy. The Framework has been developed to consider international
agreements and standards, including the OECD Common Approaches on Environment,
the IFC’s Performance Standards on Social and Environmental Sustainability (IFC
is an arm of the World Bank), and the Equator Principles, a voluntary code of
practice adopted by the international banking industry in June
2003.
Environmental
Programs Related to Climate Change
Through its EnviroExports program which
provided support of $436 million for 223 companies, EDC helps companies whose
products and services relate to climate change such as renewable energy
products. One of these companies is DIRTT (Doing It Right This Time). DIRTT
manufactures pre-engineered, movable modular walls for commercial interiors. The
walls can be disassembled and reused resulting in less demolition and a lower
carbon footprint. When Atlanta-based Autotrader moved its offices, it took its
DIRTT walls to its new head office.
EDC also supports environmentally oriented
domestic and international private equity funds. One example is investment in
Enbala, a clean power technology company which enables large companies to adjust
how their equipment demands electricity allowing electricity generation to
operate at a most efficient manner.
Canada. Export Development Canada. Balancing
Opportunities and Impacts. Corporate Social Responsibility Report 2010. Ottawa,
Ontario: 2011. http://www.edc.ca/csrreport2010
****************************************************
RBC: CSR
REPORTING MORE THAN ONE CHANNEL
RBC Financial Group says its sustainability
reporting is multi-pronged including;
- the responsibility website which is the core
for its sustainability reporting.
- the annual Corporate Sustainability Report
and Public Accountability Statement. The CSR report summarizes key information
from the web site; the PAS is required by the federal government with
regulations originally passed in 2002.
- Corporate Responsibility Review A short
publication summarizes the CSR report.
- quarterly and reports, management proxy
circular provides information on operations, financial condition, governance,
executive compensation and risk management.
- GRI index showing where Global Reporting
Initiative information is to be found.
- Sustainability survey. Information is
provided to socially responsible research and rating companies for creation of
various indices. Some of the information is released by those
companies.
- specific issue reports. Examples include
submissions to the Carbon Disclosure Project, Diversity Progress Report and
Aboriginal Partnership Report available online.
- Lobbyist registration is filed to show
employees and consultants in regular contact with government.
- review of performance metrics e.g.
stakeholder consultations and a RBC Sustainability Report Card showing trends
on key issues and progress.
Paid subscribers see link to original documents and
references
here.
****************************************************
CANADIAN
SECURITIES: ENVIRONMENTAL REPORTING GUIDANCE
On October 27, 2010, the Canadian Securities
Administration published CSA Staff Notice 51-333, Environmental Reporting
Guidance, to assist public companies (issuers) to meet existing environmental
disclosure requirements. While the provinces and territories in Canada regulate
security, these have formed the CSA to provide support for harmonizing
regulations across the country.
The intent is to provide investors with more
complete information on environmental matters which the press release says
"comprise a broad range of issues, including air, land, water and waste. These
matters can affect issuers in several ways, including interrupting operations,
resulting in material unplanned costs, providing new business opportunities, and
potentially affecting reputation, capital expenditures, and a licence to
operate."
Following consultations with investors,
issuers and experts, the Notice provides guidance on compliance with disclosure
rules in the following areas:
- Environmental risks and related
matters;
- Environmental risk oversight and
management;
- Forward-looking information
requirements as they relate to environmental goals and targets
- Impact of adoption of International Financial
Reporting Standards (IFRS) on disclosure of environmental liabilities.
The guidance also provides examples of
corporate disclosures.
Materiality
One of the discussions in the Guidance is when
disclosure about environmental matters are required. Materiality is the key
factor in determining what needs to be disclosed. The test for materiality is
"Information relating to environmental matters is likely material if a
reasonable investor’s decision whether or not to buy, sell or hold securities of
the issuer would likely be influenced or changed if the information was omitted
or misstated." This somewhat subjective test for materiality for environmental
matters is said to be consistent with materiality for financial matters as
contained in the Canadian Institute of Chartered Accountants
Handbook.
Some of the guiding principles in determining
materiality in an environmental context include:
- No bright-line test. There is no uniform
quantitative threshold. An event may be significant for a smaller issuer but
not a larger one, significant for one industry sector but not another. Both
quantitative and qualitative factors should be considered.
- Context. Some facts are material on their own
but one or more facts which may not be significant can together become
material. The issuer should not miss disclosure of this "forest" of facts by
assessing only the "trees" of individual facts.
- Timing. If an environmental matter can be
expected to grow in significance over time, there should be early disclosure
especially if over the long term the industry sector will have to invest in
new technologies or has a longer investment cycle.
- Trends, demands, commitments, events and
uncertainties. Analysis of materiality depends on 1. the probability that the
trends will occur and 2. the anticipated magnitude of the effect.
- Err on side of materiality. If there is
doubt, the issuer is encouraged to disclose the information.
The notice relates to disclosure requirements
set out in National Instrument 51-102 Continuous Disclosure Obligations. There
are five key disclosure requirements in NI 51-102 that relate to environmental
matters:
- environmental risks
- trends and uncertainties
- environmental liabilities
- asset retirement obligations, and
- financial and operational effects of
environmental protection requirements.
Disclosure about these matters, if material,
is important as each provides insight into an issuer’s risk
profile.
Role of the
Board and Management
Boards are expected to ensure that management
has done assessments for materiality in order to provide investors with
information about environmental matters. Disclosures in documents should be
consistent with this assessment. The material information in voluntary reports
should also be disclosed in a timely way in securities regulatory
filings.
Management needs processes to ensure that the
information disclosed on corporate websites and in voluntary reports is
consistent with requirements.
GallonLetter has checked many regulatory
filings, press releases and other corporate information particularly at times
when a company is in headlines due to toxic releases, explosions, and workplace
deaths. Companies with good CSR programs will be quick to communicate about
these but we have just as often been astounded to find that a company has failed
to issue even a press release or has categorized the event as of no material
significance in its filings. GallonLetter believes this guidance for materiality
needs to become much more clear and unambiguous.
Paid subscribers see link to original documents and
references
here.
****************************************************
SUNCOR: MATERIALITY
As part of its
2011 report on sustainability, Suncor Energy discusses topics and indicators
critical to the company and stakeholders. Critical issues are covered in the
print edition of the sustainability report with the web edition containing
additional information. For example, land use of oil sands and water withdrawal
are considered critical while charitable donations are discussed in detail only
in the web edition. Charitable donations are normally considered a key element
of Corporate Social Responsibility. Increasingly with web resources, companies
are summarizing information in print edition, if offered, and expanding the
information online.
The process for
reviewing materiality includes an in-depth look at Suncor's objectives, programs
and risk factors, media coverage, news releases, internal newsletters and
ongoing dialogue with stakeholders including an annual stakeholder forum.
Sustainability reporting from all Suncor unites is also reviewed.
After this
initial step, a second step was taken for 2009 and 2010 which involved a Suncor
team of grouping the issues into social, economic and environmental areas based
on two criteria. Criteria 1 was how much control Suncor had over the issue and
criteria 2 was the impact the issue had on Suncor and how much concern the issue
raised in stakeholders.
Paid subscribers see link to original documents and
references
here.
****************************************************
DOW CHEMICAL: LIFE CYCLE
ASSESSMENT
Dow Chemical
Company published a life cycle assessment of its portfolio of insulated
sheathing products including a paper published in the peer reviewed Journal of
Industrial Ecology in April 2011. The company's press release in August stated,
"The report marks a significant milestone towards demonstrating Dow’s approach
to sustainable business. In accordance with
Dow’s 2015 Sustainability Goals, LCAs are conducted to understand the expected
environmental benefits and tradeoffs associated with a technology, and to guide
product development and implementation. Examining products from a life cycle
perspective helps to ensure that anticipated sustainability benefits of Dow’s
products can be achieved, and helps promote increased sustainability awareness
among customers and manufacturers alike." Emissions saved due to use of the
insulation products in buildings and pipe systems were said to be seven
times Dow's direct and indirect greenhouse gas emissions in related to
them.
Dow's 2015
Sustainability Goals includes a commitment to report on progress "Presenting
and/or publishing life cycle assessments that are validated independently by an
external stakeholder, on existing or planned Dow products"
Improving
building insulation lowers energy cost and GHG emissions. Mazor, M. H., Mutton,
J. D., Russell, D. A. M. and Keoleian, G. A. (2011), Life Cycle Greenhouse Gas
Emissions Reduction From Rigid Thermal Insulation Use in Buildings. Journal of
Industrial Ecology, 15: 284–299. doi: 10.1111/j.1530-9290.2010.00325. http://onlinelibrary.wiley.com/doi/10.1111/j.1530-9290.2010.00325.x/full
[subscription]:
Paid subscribers see link to original documents and
references
here.
****************************************************
BC HYDRO: INTEGRATED REPORTING
BC Hydro, a
Crown Corporation, has integrated annual reports with triple bottom line reports
into one, thereby providing economic, environmental, and social information in
one report. "Reporting on the three bottom lines also allows us to benchmark our
performance with other organizations to
ensure we continue to remain in the forefront as a sustainability leader." The
electricity company has the vision of "Powering B.C. with clean reliable
electricity for generations." As is becoming more common, only web access is
offered; there is no print copy.
In addition to
the measures in the annual report, a comprehensive list of performance data is
provided in the Global Reporting Initiative index on the website.
Paid subscribers see link to original documents and
references
here.
****************************************************
INTEGRATED REPORTING STUDY: VANCITY
SPONSORED
In 2005,
Vancity, a Vancouver-based bank, commissioned a study to review integrated
reporting, an approach which combines financial and sustainability reporting in
one annual report. Susan Todd, the founder and principal of Solstice
Sustainability Works Inc. (Burnaby, British Columbia) prepared the report with
some of the following comments:
-
Tangible
benefits of integrating reporting may not be significant. Cost savings may be
minor although efficiency of staff could result from merging two reporting
teams into one.
-
Intangible
benefits may result from better internal understanding of links between
business and sustainability strategy, consistent messages and better
decision-making.
-
Challenges
include lack of accounting standards for integrated reports, massive amounts
of information, editing to keep the size of the report reasonable, missing
material environmental information because regulated financial information
takes precedence.
-
To meet the
challenges requires senior management support.
-
Auditing could
be a problem because environmental experts may not be accredited to audit
financial information accountants may not be qualified to audit non-financial
information.
-
There don't
seem to be many drivers for integrated reporting although some regulations are
requiring both financial and non-financial information.
Todd concluded
that integrated reporting "seems to be driven by its own irresistible logic and
the internal benefits it delivers. Companies that have embraced sustainability
take on integrated reporting because it makes sense to them and is the best way
to reflect their holistic management approach. Through their efforts, both
financial and sustainability reporting stand to benefit."
In 2010 Vancity
issued an integrated report.
Paid subscribers see link to original documents and
references
here.
****************************************************
NEW DEVELOPMENTS IN INTEGRATED
REPORTING
A new group
called International Integrated Reporting Committee IIRC was formed in 2010. The
reason for its formation was said to be due to the recent financial crisis. The
financial crisis has shown people that capital markets seek short term profits
at the expense of long term viability, not only of the single company but of
entire sectors, countries and the global economy. Corporate disclosures failed
to show the high risks in which companies were engaging, even when conforming to
accounting standards.
The IIRC is
chaired by Michael Peat, Principal Private Secretary to HRH The Prince of Wales
and The Duchess of Cornwall with Deputy Chair, Professor Mervyn King, Chairman
of the Global Reporting Initiative. Peat has been involved with The Prince’s
Accounting for Sustainability Project (A4S) which created a prototype Integrated
Reporting framework.
Members of the
IIRC include representatives from A4S, the Global Reporting Initiative, the
International Federation of Accountants, the main global accounting firms and
bodies, the UN, the International Organization of Securities Commissions, the
World Bank, the IMF, as well as businesses, investors, NGOs and academic
institutions.
In October
2010, a workshop on Integrated Reporting hosted by the Harvard Business
School attracted an international audience . A free ebook arising from that
conference outlines the current state of thought on integrated reporting
including the role of corporations in society, reconciling shareholder and
stakeholder interests, drivers of corporate sustainability, need for standards
for assurances and role of standards such as ISO 26000 “Guidance on social
responsibility” to integrated reporting.
A discussion
paper and regional roundtables are part of the planned IIRC process to develop a
globally acceptable Integrated Reporting framework to present to the G20 meeting
in November 2011.
Paid subscribers see link to original documents and
references
here.
****************************************************
GLOBAL REPORTING INITIATIVE
A webinar of
reporting trends presented by Mike Wallace, North American Director of the
Global Reporting Initiative GRI touched on the use of GRI and some of the issues
relating to CSR reporting in general.
Types of Reporting
Various
"footprints" are addressed in different types of corporate
reporting:
-
CSR -
Corporate Social Responsibility
-
SD -
Sustainable Development
-
ES -
Environmental Sustainability
-
BE - Business
Ethics
-
CE - Corporate
Ethics
-
CG - Corporate
Governance
-
ESG -
Environmental, Social & Governance
-
IR -
Integrated reporting
Stakeholders
Where once
companies used to think their only responsibility was to shareholders (and of
course many ardent capitalists still think so) corporate performance and
reporting is related to a number of stakeholders which can impact on the
profitability and survivability of the company including:
-
financiers
-
associations
-
community
-
peers
-
NGOs
-
government
-
shareholders
-
employees
-
customers
Shareholder Initiatives
Investor groups
which represent trillions of dollars in investment have been formed to foster
responsible corporate performance. Some act on behalf of institutional
investors; some focus on specific risks such as climate. Examples Wallace gave
are:
-
Principles for
Responsible Investment
-
Investor
Network on Climate Risk
-
Carbon
Disclosure Project
-
Institutional
Investors Group on Climate Change
-
Interfaith
Center on Corporate Responsibility
Elements of the GRI Reporting
Guidelines
Key topics
include:
-
Environmental
-
Labour
-
Human
Rights
-
Product
Responsibility
-
Economic
Each subitem
within these topics is numbered so there is the potential to compare company
reporting across the same items.
In 2006, the
third revision G3, now the current version, of the GRI Sustainability Reporting
Guidelines was launched following the launch of G2 in 2002 and G1 in 2000.
Corporate reports will indicate this by including a statement something like
prepared using GRI-G3. G4 is under development. and planned to be launched in
2013. Alcoa, Enel, GE, Goldman Sachs, Natura and Shell are sponsoring the
development of G4 and Deloitte, Ernst & Young, KPMG and PwC which are
auditors of GRI reports are providing advice.
Use of GRI
GRI has become
more widespread as a reporting methodology over the years:
-
Fortune 250
survey October 2008 indicated 80% of the Fortune 250 released corporate
responsibility data doubling since 2005. GRI was used in 77%.
-
In 1999 there
were 11 companies using GRI including Bristol Myers Squibb, GM, P&G and
Sunoco. By 2010 there were 1818 with 586 companies reporting using GRI for the
first time in 2010.
-
In 2010, 45%
of GRI reports were in Europe, 20% in Asia, 14% in North America and 14% in
Latin America, 4% in Oceania and 3% in Africa.
-
Financial
services was the sector with the highest number of GRI reports numbering over
250.
GRI charges for
use of the guidelines on a sliding scale depending on revenue.
GallonLetter
notes that GRI, like all other responsibility/greening initiatives, is
imperfect. GRI is a voluntary program. Although it has a wide range of metrics,
companies choose which of the metrics to report on and the GRI Index which
points to where the information is available on that topic will (too often in
GallonLetter's opinion) say "XXX Company does not report on this metric." or
"N/R". Even when the CSR report is cited as providing that information, the data
can be incomplete and definitely unsatisfying. Many of us tend to think that CSR
reporting means the company is taking initiatives beyond compliance, that
compliance is a bare minimum but some companies respond to the GRI metric on
compliance e.g. "total number of incidents of non-compliance with
regulations..." with "does not report."
The three levels
called Application Levels, A, B, and C help to indicate whether more or less of
the framework is addressed in the corporate reporting. If external assurance for
the data in the report is provided, a plus is added becoming A+. Criteria set
out which parts of the guidelines the company must report on to qualify for each
level. The company can self-declare the level or can procure GRI to check the
level; verifying the level does not gain a plus.
GallonLetter's
parent company CIAL Group has helped companies with CSR reporting using the GRI
framework. As long as the company doesn't regard reporting alone as the goal,
the framework provides a good way for a company to chart a journey towards
improving environmental, social and economic performance.
Paid subscribers see link to original documents and
references
here.
****************************************************
WHEN VOLUNTARY REPORTING IS INADEQUATE: ALBERTA
OILSANDS
The controversy
surrounding the oilsands industry monitoring and reporting too little
information about their operations caused the Alberta Government to set up a
panel to make recommendations on environmental monitoring, evaluation and
reporting in the Lower Athabasca region. The government is accused by critics of
being more interested in promoting the economic value of the oilsands than
protecting the environment but the government press release stated that better
environmental information will "increase public confidence in Alberta's
environmental management systems." Among the recommendations of the panel’s
report released in June 2011 is that a province-wide monitoring, evaluation and
reporting system be set up with regional implementation using Alberta's Land-use
Framework.
Pembina's Response to the Panel
Report
"The
environmental monitoring panel's recommendations are thorough. We urge the
government to move swiftly to implement a new, more robust and transparent
monitoring system." said Jennifer Grant, director of the Pembina Institute's
oilsands program in a press release responding to the report. She suggests that
insufficient environmental monitoring has eroded public trust and accountability
and the government will have to protect the environment in order to show it
deserves public confidence. GallonLetter thought her comment on date collection
has relevance also to corporations monitoring and reporting, "It's important to
note, as the panel did, that monitoring is just one component of natural
resource management; you actually have to use the data to inform planning,
regulatory decision-making and enforcement. You need the full package to get the
job done — otherwise it's like having smoke detectors but no firetrucks or
firefighters."
Alberta. Alberta
Environmental Monitoring Panel. A World Class Environmental Monitoring,
Evaluation and Reporting System for Alberta. The Report of the Alberta
Environmental Monitoring Panel. June 2011. http://environment.gov.ab.ca/info/library/8381.pdf
****************************************************
BP: RECOGNITIONS
Companies often
mention awards and recognitions such as listing on sustainability indexes like
Dow Jones and Global 100 and various rankings such as those of Canadian-based
Corporate Knights. Whether in press releases by the company or the recognizer or
in corporate reports, these recognitions lend credibility to the company's own
positioning in terms of sustainability.
BP has over the
years been recognized by many accolades. Its reports under Global Reporting
Initiative were at the highest level A+. Fortune magazine listed it as ranking
among the highest in accountability. Dow Jones Sustainability Indexes DJSI
recognized BP as a Sustainability Leader in its sector. The Gulf of Mexico
incident is a major catastrophe of BP’s operations. It is one of several
including major incidents such as the 2005 Texas City explosion (and a damning
regulator report on BP's failures in due diligence) and Alaska pipeline
leak.
BP Delisting from DJSI
As of May 2010,
BP was delisted from the Dow Jones Sustainability Indexes where it was part of
the World Index. The reason given for the removal was due to an index rule that
allows removal due to "extraordinary events." The DJSI press release said that
"The extent of the oil-spill catastrophe in the Gulf of Mexico and its
foreseeable long-term effects on the environment and the local population – in
addition to the economic effects and the longterm damage to the reputation of
the company – were included in the analysis leading up to BP’s
removal."
On the BP
website with links to the annual meeting April 2011, BP included this statement:
"Following the Deepwater Horizon accident, BP was de-listed from the Dow Jones
Sustainability Index and the FTSE4Good
Index. We understand why this has happened and will work towards restoring the
respect of these organizations. In the meantime, we continue to engage in
constructive dialogue with socially responsible investors."
In Gallon
Environment Letter October 7, 2003, we commented that while these indexes they
are popular amongst people in the financial services sector with interests in
the triple bottom line and are better than nothing to show the kinds of tools
available to companies for improving performance, GallonLetter is not a big fan
of the Dow Jones indexes because they are based to a significant extent on
company self-reporting rather than on independent review of
performance.
BP illustrates
for rankings of sustainability performance what Goldman Sachs and others do for
financial performance: that there are gaps that should be addressed. Whether it
is actually possible to close all the loopholes that innovative but self-serving
money-makers will find without regulations strangling the other corporations who
do meet reasonable standards of ethical and environmental performance is another
question. While critics of BP want to dismiss the entire company as a pariah,
GallonLetter thinks that BP with revenues larger than some nations is a complex
entity. Many of its initiatives do lead in sustainability even though there are
obviously some big problems in risk and safety management.
Paid subscribers see link to original documents and
references
here.
****************************************************
WASTE MANAGEMENT IDEAS FROM THE
NETHERLANDS
Two senior
municipal waste management experts addressed a recent Ontario Environment
Industry Association meeting, held in partnership with the Ontario Waste
Management Association and the Municipal Waste Association (formerly the
Association of Municipal Recycling Coordinators). Ton Holtkamp, the Chairman of
the Netherlands Waste Management Partnership and Herman Huisman, Senior Advisor
of the Waste Management Department of the Netherlands Ministry of Infrastructure
and the Environment explained that the Netherlands:
-
generates 60.4
million tonnes of waste each year.
-
of this, 9.4
million tonnes is from households.
-
sends only
about 1% of municipal solid waste and about 3% of all waste to
landfill.
-
recycles over
80% of waste and recovers energy from 17% of waste.
-
has the second
lowest rate of landfill in Europe, with Germany having the
lowest.
-
uses a range
of policy elements to achieve this goal, including economic instruments, a
landfill tax of ten Euros per tonne, and a national (not municipal or
provincial) waste management strategy.
-
recognizes the
need to optimize material use and dematerialize consumption.
-
has a target
of zero landfill.
-
has been
composting household organics since 1994.
-
has found that
biodigestion is a complex and difficult technology.
-
engages
schoolchildren in educational programs about waste management, so that
children can go home and educate their parents.
The Netherlands
is working with Turkey to set up similar initiatives in that country. Dutch
companies are interesting in sharing expertise with Canada to help this country
achieve similar waste diversion goals. Details can be found at http://www.nwmp.nl
****************************************************
AD AGENCY INTERPRETATION QUESTIONED BY GALLON
LETTER
Earlier this
month, Toronto-based advertising agency Bensimon Byrne issued a press release
headed "The Environment Takes a Dramatic Decline as an Issue of Importance to
Canadians". Jack Bensimon, president of Bensimon Byrne, was quoted in the
periodical Marketing Daily as saying that, since 2008, “the environment has
fallen off the radar". GallonLetter begs to differ, suggesting that even the
data in the Bensimon Byrne report do not support such extreme
statements.
Bensimon's
analysis suffers seriously from only having two data points, one from July 2008
and one from August 2011. In our opinion, two data points is hardly enough to
establish a trend. Among our other issues with the analysis of the
poll:
1) In 2008, the
pollster asked three general questions about the economy before asking questions
about the environment. In 2011, the pollster asked five questions, including two
very specific questions about the respondent's personal financial situation,
before asking about the environment. If you have just been asked questions such
as "How would you say your PERSONAL [qv] financial or economic situation is
compared to one year ago?" and "How do you expect your PERSONAL financial or
economic situation to be one year from now - compared to what it is like today?"
it is not surprising that a percentage of respondents would be immediately more
concerned about spending money on the environment than if they had not just been
asked those questions.
2) In 2008, in
response to a question about how important the environment is to the respondent,
59% replied important and 34% responded somewhat important. For reasons unknown
to GallonLetter, the response options to the same question had been changed for
the 2011 poll: this time, to the same question, 49% responded very important and
46% responded somewhat important. What is the impact of changing the options
from important, somewhat important, etc., to very important, somewhat important,
etc. Clearly fewer people would answer Very important than would answer
Important. Is this an attempt by Bensimon Byrne to fudge the results? If
government had done this, there is no doubt that such an accusation would have
been made. Note also that in 2008 the total of important plus somewhat important
was 93%. In 2011 the total of very important plus somewhat important was 95%.
Hardly "disappearing off the radar" as Bensimon was quoted as
saying!
3) Bensimon
Byrne makes much of the decline in the percentage of respondents who say they
are Very Concerned about the environment from 38% in 2008 to 27% in 2011. But
the number of respondents who are not at all concerned about the environment
fell from 18% in 2008 to 8% in 2011, suggesting that in fact many more Canadians
have some degree of concern about the environment in 2011 than had some degree
of concern in 2008.
4) On all of the
environmental issues (clean water, waste and garbage, protecting wilderness,
promoting locally grown food, etc) that were covered in the Bensimon Byrne poll
in both 2008 and 2011, the numbers who described the issue as important or
somewhat important have remained the same since 2008, within the margin of error
of the poll. Hardly a crashing decline in public concern about environmental
issues. Indeed, on stopping genetically modified food, the number of respondents
who described that as important or somewhat important increased from 74% in 2008
to 83% in 2011.
5) The question
was asked When you are making purchases do you think about the environmental
impact? In 2008, 32% responded Most of the time, compared to 25% in 2011. In
2008 48% responded Some of the time compared to 45% in 2011. Given that the
terms Most of the time and Some of the time are purely subjective, and
respondent's interpretation of them may well have changed, we suggest that even
these two data points are hardly enough with which to declare a substantial
trend.
6) The poll also
reports that 91% of respondents recycle all paper, cans and plastic almost
always or often (this is not supported by data from municipal recycling
collections); 77% buy energy saving bulbs almost always or often (again not
supported by sales data); 69% buy locally grown food almost always or often; and
58% have changed household cleaning products to non-toxic green products almost
always or often. Again these data suggest more of an entrenching of green
purchasing than the "falling off the radar" that Bensimon Byrne is trying to
sell.
Contrasting with the Bensimon Byrne
Poll:
>A July 2010
national opinion poll conducted by Angus Reid found that 66 per cent of
Canadians think the government is paying too little attention to the
environment.
>A December
2009 Harris/Decima poll found that 64% of Canadians believe that environmental
initiatives should remain as a high priority even as the economy
weakens.
>An August
2009 Harris/Decima poll found that 71% of respondents said environmental
conservation is more important to them than it was a few years ago.
GallonLetter
suggests that the Bensimon Byrne interpretation of the data is just plain wrong.
However, to provide a numerical context, the data do show that environment is of
concern to many more people (49%) than voted Conservative (39%) in the recent
federal election. GallonLetter challenges Jack Bensimon to declare that support
for the Conservative Party of Canada has "fallen off the radar"!
****************************************************
CAN YOU BELIEVE IT?
In its annual
fiscal report ending March 2011, Niko Resources traded on the Toronto stock
exchange and based in Calgary stated "In January 2009, the Company announced
that the Canadian authorities were engaged in a formal investigation into
allegations of improper payments in Bangladesh. The Company cooperated in the
investigation, which was concluded on June 24, 2011. The Company pleaded guilty
to one count of bribery under the Corruption of Foreign Public Officials Act,
was fined Cdn$9.5 million and is subject to a 3-year Probation Order. In early
2009, the Company adopted a full anti-corruption compliance
program."
Federal Court in
Calgary had ruled that the company had bribed the Bangladeshi minister of energy
and mineral resources in regard to a blowout at a natural gas well. The minister
quit in 2005 because of the bad press about the bribe.
And yet in last
year's annual report, the company's disclosure of risk factors focussed not on
its own risk of prosecution for bribery but, "The Corporation may be at a
disadvantage in that it may be required to compete against corporations or other
entities from countries that are not subject to Canadian laws and regulations,
including the Corruption of Foreign Public Officials Act (Canada) (or similar
legislation of other jurisdictions, including the United States Foreign Corrupt
Practices Act). Residents or nationals of countries not subject to such legal
regimes may offer inducements to foreign governments and foreign public
officials to entice such governments and officials to deal with them to the
disadvantage of the Corporation."
Paid subscribers see link to original documents and
references
here.
****************************************************
CHECK OUT GALLONDAILY
If you find
GallonLetter to be useful or enjoyable you may also find value in our new
GallonDaily newsletter, focussing on current environmental and sustainable
development news and commentary of particular interest to the greening of
business. You will find GallonDaily at www.gallondaily.com with new short articles and links generally posted
almost every weekday and available in an archive for your future reference.
Recent articles include:
-
Gulf Oil Spill
dispersants include carcinogens
-
Industry
warning over contaminated food in Europe
-
Science,
politics and business
-
New clothing
may contain harmful chemicals
-
Results in
coalfield poll out of line with Tea Party positions
As with
GallonLetter, we welcome your comments and will publish a selection of those
which we judge likely to be of interest to our readers. GallonDaily comments can
be posted immediately following each article.
****************************************************
QUOTE
You can wait for
perfect conditions or you can do the best with what you have now.
Jack Layton,
Canada's Opposition Leader, New Democratic Party
Quoted by Mike
Layton, speaking at his father's funeral in Toronto August 27, 2011 in telling
the story of going out on a sailboat for the first time with his father giving
him basic sailing instructions. When the wind died down, Mike had said maybe
they should have gone sailing at a better time.
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Copyright ©
Canadian Institute for Business and the Environment
119 Concession 6
Rd Fisherville ON N0A 1G0 Canada. Fisherville & Toronto
All rights
reserved. The Gallon Environment Letter (GL for short) presents information for
general interest and does not endorse products, companies or practices.
Information including articles, letters and guest columns may be from sources
expressing opinions not shared by the Canadian Institute for Business and the
Environment. Readers must verify all information for themselves before acting on
it. Advertising or sponsorship of one or more issues consistent with sustainable
development goals is welcome and identified as separate from editorial content.
Subscriptions for organizations $184 + HST = $207.92. For individuals
(non-organizational emails and paid with non-org funds please) $30 includes HST.
Subscription includes 12 issues about a year or more. http://www.cialgroup.com/subscription.htm
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx