Josephine V. Yam

Thoughts on the Corporate Knights Best 50 Canadian Corporate Citizens List

I read with great interest the Corporate Knights Best 50 Corporate Citizens in Canada. The metrics used in arriving at the Best 50 list were very comprehensive, as they ran the gamut of environmental, social and governance (ESG) indicators.

For Environmental indicators, the following metrics were used:
• energy productivity
• carbon productivity
• water productivity
• waste productivity

For Social indicators, following metrics were used:
• ratio of CEO remuneration to lowest-paid employees
• number of injuries and no lost-time accidents per 1M hours worked
• average % of taxes paid over past 4 years
• funded status of defined- benefit plan benefit obligations

For Governance indicators, following metrics were used:
• existence of sustainable development-themed board committee
• existence of a link between sustainability criteria and senior executive’s compensation
• percent of women, Aboriginal, and visible minorities on Boards of Director

Needless to say, I was very surprised to learn that a lot of companies were coming from the Oil, Gas and Consumable Fuels industry and from the Metals and Mining industry. This is because these industries have the reputation of having as corporate members the heavy polluters and large emitters of GHGs.

I was also very surprised that the list had an economy-wide scope of a plethora of industries – from insurance to independent power producers, to commercial banks, to media, to capital markets, to professional services, to retail and to diversified telecommunications, in addition to the oil, gas and consumable fuels, and the metals and mining industries. This evidences that the ESG indicators have become acceptable benchmarks in the larger mainstream sectors of Corporate Canada.

In view of these revelations --- including the discovery of companies in the “notorious” Oil, Gas and Consumable Fuels and the Metals and Mining industries in this list ---- my traditional perception of such companies in these industries has been radically altered. But then again, it should probably not come as such a surprise to me. This is because if these resource-based companies ignore ESG indicators in their overall operation and management of their companies, they only do so at their peril.

Written: 2011 December
Reference:
The Corporate Knights Best 50 Corporate Citizens in Canada at http://www.corporateknights.com/report/2011-best-50-corporate-citizens-canada/2011-best-50-corporate-citizens-canada