Take the Deepwater Horizon Oil disaster. Suddenly the idea that “sunlight is the best disinfectant,” as stated by Supreme Court Justice Louis Brandeis became every investor’s personal motto when it comes to transparency, due diligence, and good governance.

What does oil have to do with responsible investing? Almost all Canadian responsible investment (RI) funds have stocks in oil sands, mining, and various other resource industries that comprise Canada’s worst greenhouse gas offenders.

“Counterintuitive, isn’t it? We hear from folks who are quite surprised to hear that socially responsible funds invest in oil sands because they don’t necessarily understand the lack of diversity in the Canadian market,” says Dermot Foley, Strategic Analyst with Vancity Investment Management.

It’s a necessary evil—for mutual funds to be as risk-free, or as financially secure as possible, all financial institutions with RI mutual funds must invest in “dirty fossil fuel production.”

Canada is a resource-heavy index. Trying to steer clear of oil is “obviously a preposterous investment strategy since oil runs the world economy,” says Doug Morrow, Senior Associate at Toronto ICF International. However, as a result of that necessary evil, “responsible” investment becomes relative, according to Foley.

Investors are more aware of how integral environmental, social, and governance (ESG) factors are to the financial bottom line—and the triple bottom line, people, planet, profits is gaining momentum, but who’s keeping tabs?

“Investors are becoming increasingly concerned about inadequate disclosure of liabilities. The recent sub-prime mortgage crisis, as well as the Enron and WorldCom scandals are all evidence of the dangers of not having thorough disclosure policies. For oil sands investors to make wise decisions and minimize uncertainties, financial reporting of assets and liabilities must be accurate and transparent,” says Toxic Liability, a report assessing oil sands reclamation by the Pembina Institute.

In Canada, companies are required to report on asset retirement obligations, such as mine closure plans, and land and water rehabilitation. But, the environmental information currently provided by companies is not necessarily complete, reliable or comparable, and it isn’t integrated into financial reporting, according to the Environmental Reporting Guidance notice issued by the Canadian Securities Administrators.

While all the major banks say they do third party due diligence in their risk analysis when assessing the ESG factors at various extractive companies, it’s difficult to compare companies and different funds when assessment styles “vary from analyst to analyst,” says Don Roberts of CIBC. Some analysts will hire third parties to review the claims made by companies, and some simply won’t.

“Are companies reclaiming land at the rate they said they would?” is a question Jason Milne, Governance Analyst at RBC Global Asset Management Inc., asks when considering various risk factors.

However, as Corporate Knights’ Responsible Investment Guide explores later, there is a $10-15 billion shortfall in the financial planning for rehabilitation of total lands used by the oil sands thus far, and this is but one extractive industry wherein RI invests. Do risk managers account for reclamation liability? According to Canada’s big five banks—RBC, BMO, CIBC, TD Bank, Scotiabank—this is risk management 101.

Part of classic investment or classic investment risk management are the 4 Ms—materials, markets, management, and money. So to the extent that reclamation liability is material, yes, it is assessed, according to Ula Ubani, Corporate Responsibility & Sustainability, BMO Financial Group.

Some financial institutions value the 4 Ms in different order, further complicating comparisons. For instance, of Canada’s 5 big banks, TD Asset Management is simultaneously the only bank that manages its own RI funds and is a signatory to the UN Principles for Responsible Investment (UNPRI), which are considered the “gold standard” for financial institutions to manage environmental and social risk. The responsible investment funds created by RBC, BMO, and Scotiabank are managed by signatory companies.

As evidenced by multiple countries, signing a UN document and implementing it are two different things.

While TD has some of the best performing funds, the management of those funds, like any fund, is weighted more heavily on the financial aspect than any other.

“Governance on the financial sector is a much more important component [for TD’s Global Sustainability fund], whereas in materials and mining, the environment is much more important relative to the other pieces,” says Thomas George, Vice President of TD Asset Management referring to the creation of a TD Sustainability Index which is helping TD define what sustainability means across each sector.

Ironically, while RI is performing relatively well as investments recover from the financial collapse, a misconception about the performance of RI funds is what’s hindering advancements in the field.

There is a fairly widespread belief that by concentrating an investment strategy on companies that meet certain non-financial criteria—like best-in-class or environmental impact—you’re going to limit your financial performance, according to Doug Morrow, Senior Associate at Toronto ICF International.

“It’s difficult for any mutual fund to outperform the market, but it’s a double standard. I know Jantzi underperformed in terms of the TSX benchmark, but that’s not unlike 90 per cent of all mutual funds,” says Morrow.

The fact of the matter is the TSX is home of the largest number of cleantech companies in the world (even though many of them still have relatively small market caps). And the launch of S&P/TSX Clean Technology Index to measure the performance of companies listed on the TSX whose core business is in the development and deployment of green technologies puts Canada in the forward-thinking category.

But, “the transition to a cleaner economy can’t happen overnight because of the need to invest in cleaner technologies,” and that is exactly what Scotiabank is doing according to Kim Brand, Director of Environmental Affairs at Scotiabank.

One thing that many agree stands in the way of the development of a cleaner economy is government.

“The lack of action in Ottawa and the gridlock in Washington D.C. prevents or restricts the capacity of governments to put a price on carbon, which is what we really need for clean technology to take off,” says Robert Walker, Vice President, ESG Services, Northwest Ethical Investments.

Do the stress test—does a carbon tax make sense? asks Don Roberts, Vice Chairman Renewable Energy and Clean Technology, CIBC.

Whether it be an assessment of “dirty fossil fuels,” signing documents, or financial performance, there’s a lot more than meets the eye when it comes to Canada’s big banks, RI, and Cleantech. The investment pool from which major banks draw is murky at best. For instance, RBC is currently the only major bank in Canada with specific policies not to invest in cluster bombs.

So what’s the moral of the long and convoluted story of “responsible” investing? It’s really still in its nascence. Nothing is fully established, regulated or standardized. When you’re thinking of investing your hard-earned dollars, do your research or you may end up funding something that could blow up in your face.

The post Putting the R in responsible appeared first on Corporate Knights.

“I have an HIV-positive patient who comes in for Chlamydia once a month. He says he uses protection. If you’re using protection, you’re not getting Chlamydia, and if you’re getting Chlamydia then you’re probably passing on HIV,” she says with disdain.

“He couldn’t identify the partner because it was in a bath house,” she continues. “Public Health monitors this kind of stuff, but clearly not enough.”

Dr. Anne Doig, former president of the Canadian Medical Association (CMA), agrees. “We don’t have good methods in place for proper checks and balances.”

Rosenberg, Dr. Doig, and Dr. Durhane Wong-Rieger, a patient advocate and doctor who helped Canada mitigate the tainted blood scandal in the late 80s and early 90s, believe Medicare has been broken, in part, by a lack of accountability.

Responsibility for your health rests as much with the doctor as it does with the patient.

“The good news about having doctors that are publicly funded is that you have health
care that could be accessible to everybody. [But some doctors think,] ‘You’re not my client. The government’s my client,’” notes Dr. Wong-Rieger.

In terms of checks, balances, and check ups, Dr. Wong-Rieger looks to her dentist as an example: “The part of my body [that’s best taken care of] are my teeth [because] my dentist is really accountable to me. If I miss a check up, he calls me. My doctor doesn’t do that.”

But is that because we pay for our dentists out-of-pocket?

Unfortunately, because dentistry is not covered, many people resort to walk-in clinics for tooth infections. “That doesn’t belong in a walk-in clinic,” says Rosenberg. If Medicare covered more services, wait times could be reduced because other health care practitioners, like dentists, could share the load.

Long wait times—the most common complaint about health care in Canada—are arguably caused by people misusing the system, but that’s just one part of the equation. Canada has always suffered from a brain drain that results in a doctor shortage, thereby making wait times longer.

In 2008, Statistics Canada reported 15 per cent of Canadians aged 12 or older —about 4.1 million people—did not have a regular medical doctor.

As the mother of a son with two holes in his heart, a daughter with a rare blood disorder—Thalassemia Minor—and a husband with Parkinson’s disease, Dr. Wong-Rieger understands this problem well.

Despite being a doctor herself, “we didn’t have a doctor for a year and half,” she says, so her family made use of walk-in clinics.

This was the only option available to her family—yet another aspect of the problem with wait-times and doctor shortages.

It’s a vicious circle. Walk-in clinics are reserved for patients who can’t get in to see their general physician (GP), but there are so few GPs people often rely on walk-in clinics for regular care. Also, Rosenberg says GPs are the lowest paid, while walk-in clinics provide doctors with fast, easy money, and there’s little or no responsibility to follow up with the patient.

Outside factors such as “talent poaching” are affecting the shortage, says Dr. Doig. Our doctors and nurses are extraordinarily well trained, and the problem is the U.S. loves to have our trainees.

In Canada’s failed version of talent poaching, Dr. Doig states the government and the CMA are both working towards making recertification for internationally trained physicians less difficult and cost-prohibitive. However, many are underemployed. And, she comments, “the whole planning of health human resource allocation across Canada is not well coordinated.”

This lack of coordination results in rural northern communities living without doctors in the region. Thirty-one per cent of Canadians live in rural or remote areas, but only 10 per cent of Canadian physicians practise outside metropolitan areas.

Shortages like these result in last-ditch efforts as happened in the wake of the H1N1 flu pandemic in 2009. In order to avoid criticism for inaction, the federal government sent body bags to rural native communities in lieu of medical assistance.

The doctor shortage, like so many problems facing Medicare, is not solely to blame for a body-bag-delivery health care system.The problems are multi-faceted.

If the government wants to reduce wait times, Medicare should cover alternative health care methods, says Rosenberg. “We keep bringing back patients because [doctors] want the money, but then it bogs the system down. Get [patients] out of the waiting room. Say you have someone with chronic back pain. Instead of bringing them in and medicating them, pass them along to a chiropractor or a naturopath.”

However, when patients ask that their test results be faxed to a naturopath or other health care practitioners, many doctors do it grudgingly, she says, and they charge you for the privilege.

While many would think doctors avoid alternative health care and are motivated to medicate by big pharmaceutical companies, Rosenberg clarifies they medicate to avoid accusations of malpractice.

These issues of entitlement to a free system where doctors are threatened with reports to the Royal College of Physicians—a monthly occurrence at Rosenberg’s busy downtown Toronto medical office—also play a role in the fear Canadians have about changing Medicare.

Medicare is “a political sacred cow,” says Dr. Doig. “Because it is a [fundamental social] value, it has become something that everyone’s afraid of tinkering with.”

Fear of change is yet another part of the puzzle in what’s left of Tommy Douglas’ original vision. “We haven’t lived up to [Medicare’s] potential,” says Dr. Doig.

In reference to the system, Dr. Wong-Rieger says, “It takes tragedies to get changes.”

The tragedy with Medicare lies in the external costs incurred for our “free” system: expensive medication, long wait times, and the absence of preventive health care.

According to a U.S. report from the National Library of Medicine, Economic Incentives for Preventive Health Care, if health care is to provide collaborative quality care, care management and effectively prevent and manage chronic disease, the system requires major re-engineering.

The report can be applied to Canada since few Canadian doctors deal with preventive medicine, says Rosenberg. And the Canadian Institute for Health Information reports 64 per cent of Canadians do not seek preventive health care.

In all examples cited in the report by the Library of Medicine, preventive health care addressed the gaps between the high cost of preventable disease and deaths and the actual prevention practices of health providers and consumers.

“We should be very much proactive in identifying patients ahead of time. Does this cost more? No,” Dr. Wong-Rieger says.

In Canada, the care system is just that—a system. “We expect you to adapt to the system, we don’t expect the system to adapt to you. Canada’s a great country in terms of the public services available, and yet we’re pretty stupid [about service delivery],” she criticizes.

The problems with health care lie with patient, doctor, and government—no one source is to blame.

“It’s very multi-factorial,” says Dr. Doig, referring to a lack of food policy, agricultural
policy, and proper education.

As far as education goes, for Rosenberg, Dr. Doig and Dr. Wong-Rieger, diabetes, smoking and weight problems are the most prevalent preventable health issues facing Canadians.

Just under five per cent of Canadians have diabetes. Ninety per cent of those have Type 2 adulthood onset diabetes, which unfortunately is presenting more in children all the time.

As for smoking, smokers pay more for health insurance in the U.S. In terms of body mass index (BMI), all government employees in the state of Alabama who don’t live within their BMI have one year to get fit or start paying for their insurance—currently covered by the state.

These kinds of measures may not be far off. “The Canadian public is already paying more than half of their health care costs privately. [All that’s covered] are physician services and in-hospital services. Everything else that might be covered is at the discretion of the provincial government,” notes Dr. Doig.

For Dr. Wong-Rieger, solving any problem with Canada’s health care system is a full circle trip back to accountability. “I’m not up to the point where if you smoke I’m not going to take care of you. But, if you’re given good advice and you choose not to do it—is there not a point where [the patient has to take] responsibility?”

Nurse Rosenberg sees these kinds of problems every day. Recently, a 24-year old
man, over 300 pounds, came into her office on a scooter. He told the doctor he needed his disability forms signed. “He said, ‘I’m morbidly obese and I have depression. And I just wanted a few refills for morphine, Demerol, and Tylenol 3.’”

The doctor filled out the forms, “so he could charge OHIP $150,” but would not refill the prescription.

Without having any more interaction with the patient apart from a brief discussion, the doctor signed forms to ensure this man received a monthly government cheque, and potentially sent him on to another doctor to try and get medications clearly not used for depression.

Where does all of this leave Canadians? It leaves us asking what we are sacrificing for our political sacred cow. The answer: Perhaps we sacrifice our own health because we take it for granted that Medicare will always be there and always be “free.”

For Rosenberg, “If you can’t give good reason why you’re 100 pounds overweight, or if you keep getting Chlamydia, you should pay for it. You put yourself at risk, so why should we pay the consequences? That’s why the people who need an MRI really quickly don’t get it: because someone ate themselves into oblivion and is now diabetic sitting in the ER. It’s a shitty system.”

*In order to protect her identity, Kathleen’s name was changed.

This article has been nominated for a RNAO Award for Excellence in Health-Care Reporting.

The post Sick story appeared first on Corporate Knights.

Otherwise known as waste from electrical and electronic equipment, e-waste contains hazardous materials and heavy metals such as fire retardants, polychlorinated biphenyl, lead, mercury, cadmium, and the list goes on. Often the waste is shipped overseas to undeveloped countries where the toxins inside pollute the people, and the environment.

BAN first brought e-waste to the world’s attention in a 2002 report titled Exporting Harm: The High-tech Trashing of Asia, where it asserted an estimated 80 per cent of all e-waste collected in North America for recycling is shipped offshore and 90 per cent of that goes to China.

China is not alone. Ghana and Nigeria have become e-waste dumpsites as well.

Despite the establishment of e-waste recycling programs and landfill bans across North America, the amount of e-waste shipped overseas remains “about the same,” says Jim Puckett, founder of BAN and a toxics policy advocate.

The Environment Protection Agency estimates the U.S. generated over 3 million tones of e-waste in 2007, but only 13.6 per cent of that was collected for recycling.

The lack of harmonized legislation has allowed many unregulated or “grey” recyclers to profit from this relatively new industry and Canada is not exempt.

“If you asked Environment Canada how much is going out through the ports illegally in containers they don’t know,” says Frances Edmonds, Director of Environmental Programs for Hewlett-Packard Canada.

Environment Minister Jim Prentice made no comment in reply.

Global Electric Electronic Processing (GEEP) is one of Canada’s largest e-waste processors and with facilities in Europe and the U.S., GEEP Vice President Wallace MacKay notes they are constantly being audited. “You have to prove that you’re doing it the right way or you’re going to get all kinds of charlatans out there shoveling this stuff into a sea container and shipping it off to China. And believe me it’s happening,” says MacKay.

Despite tighter Canadian regulations, there are a number of grey recyclers that continue to ship to developing countries.

Companies like GEEP and Sims Recycling Solutions Canada pride themselves on how responsibly they recycle and reclaim the commodity materials contained in e-waste. “We follow [everything] to its final resting place where it’s re-consumed into a new product,” explains Cindy Coutts, President of Sims.

While some processors go the extra mile to further separate the mixed plastics contained in a lot of e-waste, many companies simply send mixed plastics to a smelter, where the plastic is burned off creating dioxins that pollute the air.

“Plastic is the holy grail of recycling because it’s mixed and very expensive to separate,” says Edmonds.

This is one thing all e-waste recyclers and processors agree on.

And, because some companies are researching and developing new ways to deal with mixed plastics in e-waste, when contracts are awarded to processors based on their plant’s proximity to the collection site rather than on the merits of its practices, it’s a frustrating challenge.

It’s the lack of commitment to these details by some companies approved by various provincial programs that makes it difficult for enterprising companies to compete.

This is just one of many issues that has sparked controversy in Ontario over the poor performance of the Ontario Electronics Stewardship (OES) program— an industry-funded program created to implement the government’s diversion plans. OES promised to divert 45,000 tonnes of e-waste in its first year and was only able to divert 17,000 tonnes—just 1.3 kilograms per capita.

While Ontario is the only province that set a target and collected the most tonnes in its first year, at least one province is exceeding the European Union’s benchmark of 4 kilograms per capita for e-waste collected and recycled. As of 2009, Alberta’s e-waste recycling plan reported recycling 4.74 kg/capita. Ontario’s rate is second last amongst the seven provinces operating an e-waste recycling program.

Waste Diversion Ontario would not confirm the final numbers and Ontario’s Minister of the Environment John Gerretsen could not be reached.

“You have to take these numbers with a large grain of salt,” states Mario D’Alfonso, owner of ADL Process Inc., an e-waste recycler in Toronto.

At ADL, their corporate contracts bring in 60 tonnes of e-waste and between 160-180 tonnes from the provincial program.

Many e-waste processors have private contracts and collections and the tonnage from these contracts is not taken into account by provincial programs.

For example, GEEP recycles 25,000 tonnes a year at its Barrie facility alone and Sims processes 36,000 tonnes a year at its Brampton site. Their numbers add up to 16,000 tonnes more than OES hoped to collect. And these are just two of eight recyclers listed on the OES website.

Each provincial program had difficulties in their first year.

No provincial program collected more than 17,000 in the last year, much less its first year. Likewise, Quebec, Prince Edward Island, New Brunswick, Newfoundland and Labrador, Yukon, Northwest Territories and Nunavut are all without e-waste recycling programs.

In the U.S., 17 states do not have e-waste programs and because shipping e-waste overseas is unregulated and highly profitable many U.S. recyclers are grey and therefore ship the waste to places like China. “That’s our biggest problem in the U.S.,” comments Dr. Greg McWatt of GEEP.

By comparison, Canada’s legislation has been tougher and our programs more inclusive in terms of the various types of e-waste collected. Alberta was the first e-waste recycling program to accept printers—even ahead of California.

While Canada is lagging behind the European Union, “Canada’s way ahead of the U.S. in terms of legislation,” says MacKay. “We should be proud of that.”

For more information go to dowhatyoucan.ca, epsc.ca and ban.org. You can find a list of companies ranked according to their policies on toxic chemicals, recycling and climate change here.

The post Waste not, want not appeared first on Corporate Knights.