But over these years, only the giants have been ranked. That’s because the Best 50 only tracks companies with revenues of $2 billion or more and at least 2,000 employees. While this limits the field, particularly in a country the size of Canada, it was necessary at the time.

Only big companies had the resources to reliably measure some or all of the 12 key performance indicators that Corporate Knights tracks, and where there is no measurement we can’t begin to talk about disclosure.

The good news is that disclosure rates have steadily increased over the past decade for the giants. Under the radar, however, have been smaller companies. True, they still don’t have the same kind of resources as their larger peers. But rising awareness of the importance of resource productivity, good governance and social responsibility seems to be having an impact on all businesses – large and small.

It is for this reason Corporate Knights feels the time is right to start showcasing those Canadian corporate leaders that are part of the sub-$2-billion crowd. We do it in this issue with the launch of our inaugural Future 40 Responsible Corporate Leaders in Canada ranking.

We began with a starting universe of 213 companies. Partly, these are publicly traded companies that disclose environmental, social and governance data that ends up being collected by data aggregators such as Bloomberg. The rest are non-publicly traded companies that submit their ESG reports to the non-profit Global Reporting Initiative, which promotes standards for sustainability reporting.

“It’s definitely non-exhaustive,” says CK Capital lead analyst Michael Yow, “but there is nothing better out there at the moment.”

Out of our starting universe, we found that the disclosure rate for each of the seven “first-generation” sustainability indicators – that is, energy use, GHG emissions, water use, waste production, employee turnover, lost-time injury rate and total payroll – was above 10 per cent. For GHG emissions, the disclosure rate was an impressive 23 per cent.

These may seem low, but Yow argues otherwise. “These are actually fantastic and are very much in line with stats for large publicly listed companies,” he says. “So, the idea that sustainability reporting is just a large-cap phenomenon may not be exactly true.”

Corporate Knights plans for the Future 40 to be an annual ranking. We see it, to use a sports term, as a kind of farm team that feeds future sustainability leaders into the big leagues of the Best 50. It highlights the up-and-comers to watch, and sends smaller companies a message: How you use resources, how you govern yourself, and how you treat employees and the communities in which you operate matters to investors, customers, suppliers, consumers and citizens.

Last year, Corporate Knights launched a mobile app designed specifically to help smaller companies get into the sustainability reporting game. Called CK Ranker, it lets companies build their own profile, enter data across 12 key sustainability indicators, create multiple scenarios, and compare their current or planned performance against larger peers listed on our Best 50 or Global 100 ranking of companies.

You can learn more by going to CKRanker.com, or download the free basic version of the app from Apple’s App Store and kick the tires, so to speak. The Pro version, if you decide to go for a serious drive, is only $10.

Meanwhile, smaller firms already tracking their sustainability performance should report their data to the Global Reporting Initiative. For publicly traded companies, make sure Bloomberg is tracking you.

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The post 2014 Future 40 results appeared first on Corporate Knights.

“We built our runoff infrastructure to withstand the 100-year storm, and it did just that,” says Toby Lennox, vice-president of corporate affairs at the Greater Toronto Airports Authority (GTAA). Pearson, Canada’s largest airport, is owned and operated by the GTAA.

Water running off of the 19 square kilometres of airport property – much of it paved – was diverted into an extensive system of catchment tanks roughly the size of six football fields. Described by Lennox as similar to the lair of a James Bond villain, this cavernous system then ran the water through fuel separators and other filtering technologies before discharging it into a nearby stream in controlled increments.

Torn between working to meet the air travel demands of a growing city and the constant pollution, space and other constraints facing airports, the GTAA has emerged as an unlikely standard-bearer for sustainability-minded airports.

Viewed as providing an important public asset, disclosure has proved consequential in cementing the GTAA’s reputation. “People should absolutely know what you are doing, no excuses,” says Lennox. He understands that the cost of compliance for smaller companies can sometimes be tricky, but the data gathered plays a key role when planning for future operations. In 2009, the GTAA began to follow the airport supplement guidelines outlined by the Global Reporting Initiative.

In anticipation of climate change “manifesting itself in more severe weather events,” the GTAA has been working with Engineers Canada to identify potential vulnerabilities and determine where greater adaptation measures are needed. The airport is working towards a 60 per cent solid waste diversion goal, while habitat improvements on the nearby Spring and Etobicoke Creeks are ongoing.

For his part, GTAA president and chief executive Howard Eng has internalized many of the lessons learned in his 12 years as executive director of operations at the airport authority in Hong Kong. Based in a city where air quality concerns regularly generate front-page coverage and water resources remain scarce, companies in Hong Kong can’t afford to treat these issues as second-tier. Many households and businesses have even converted to using seawater for the flushing of toilets, in an effort to reduce the strain on freshwater resources.

Some conservation measures have evolved into unlikely revenue sources, including the resale of de-icing fluid. Liners at the Central Deicing Facility capture the glycol-based product, then separate it into high and low concentrations. It is eventually sold as recycled automotive antifreeze. In 2012, 7.6 million litres of fluid was repurposed in this manner. A perforated pipe system under the facility aims to capture any additional liquid that leaks underground.

Aviation currently generates about 2 per cent of global carbon dioxide emissions, while continuing to rise rapidly. Unable to seriously curtail emissions from the aircrafts themselves, the GTAA is working towards the long-term goal of reducing its emissions 20 per cent by 2020. Strategies include pursuing LEED certification for new buildings, expanding efficient heating, ventilation and lighting systems and purchasing more renewable energy.

Lennox concedes that progress has been slow in diversifying transportation choices to and from the airport: “69,000 vehicle trips are made to Pearson a day, but only 2 per cent are from transit. We need to do better.” The Union Pearson Express is the first step, a light rail connecting the downtown to the airport. Currently under construction, it is intended to come online in time for the Toronto Pan Am Games in 2015. Estimates see the train carrying 5,000 people a day.

Eighteen electric vehicle-charging stations have now been installed at the airport for the general public, in addition to the existing facilities for small GTAA vehicles such as baggage carriers.

One big source of congestion and pollution comes from the thousands of employees that commute to work every day. Participation in both the Mississauga and Pearson smart commute programs has had an impact on reducing the number of round trips, but greater investment is needed. The GTAA is now backing civic partners CivicAction and Evergreen in an attempt to elevate transit expansion as a municipal and provincial priority.

The GTAA’s emphasis on corporate social responsibility does not negate its continued participation in a carbon- and resource-intensive business. Explains Lennox: “We have these duelling mandates to grow and serve the city, while at the same time minimizing its impact on the community.

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Reading Adam Minter’s book Junkyard Planet reminded me of the many stories I’ve heard about the business, about the menches and the schlemiels who were part of it. Minter, who is Shanghai columnist for Bloomberg World View, traces how what was a Jewish business has become a Chinese one, as China developed a voracious appetite for scrap that gets melted down and returned to us in the form of new products. As an author and a grandchild of the scrap business, Minter is in an extraordinary position. His knowledge and background gives him entrée into a very secretive world. He understands what he is looking at and as a skilled writer does a great job of sharing what he sees.

It’s a very big business. Minter writes “the global recycling industry turns over as much as $500 billion annually and employs more people than any other industry on the planet except agriculture.” He doesn’t greenwash the industry either:

“If your first priority is the environment, recycling is merely the third-best option in the well-known pyramid that every American schoolchild learns: reduce, reuse, recycle. Alas, most people have very little interest in reducing their consumption or reusing their goods. So recycling, all things considered, is the worst best solution.”

It used to be a terribly polluting industry; the way you would separate the metal in a car from everything else was to burn it out. In the 1960s it was estimated that 5 per cent of America’s pollution was caused by incinerating automobiles. Then they discovered shredding, magnetic separation, and containerization. Then China emerged on the scene. “It’s unbelievable to me,” Minter writes, “when I was a teenager we sometimes charged to take steel scrap, it was worth so little. That was before China, before Asia needed metal.”

Now we export the scrap and the associated pollution to the other side of the world where it is out of sight, but still a horror story. Minter describes a visit to Guiyu in China, where 81.8 per cent of the kids there under the age of six have lead poisoning and where the government has to truck in drinking water. But like much of China, “its culture is entrepreneurial; its customs agents are notoriously corrupt; and there were once lots of poor farmers looking for cash wages to improve their life.”

The last chapter addresses the real issues and problems with recycling and why it is by far the worst of the three Rs. He describes one recent study where participants were given a task that involved cutting up paper (ostensibly to test scissors). Those who had a recycling bin beside their desk used twice as much paper as those who just had a trash bin. In other words, the recycling option actually increased consumption. The study concluded: “We believe that the recycling option is more likely to function as a ‘get out of jail free’ card which may signal to consumers that it is acceptable to consume as long as they recycle the used product.”

Similarly, Minter comments: “I encourage people to think about what it means to recycle, and make smart choices as a consumer before you buy that thing you’ll eventually toss out. Recycling is a morally complicated act.”

Indeed it is. It is the worst of the three Rs, but at the same time it has given new lives to Chinese farmers; a hundred years ago it gave new lives to a generation of Jewish immigrants. They all took what nobody wanted and separated it into its valuable constituents and gave it another life. But the highest value stuff is that which can be reused – the computers that can be refurbished or taken apart, the beer bottles that can be refilled. We generate far too much of the low value stuff, the cardboard, the endless rolls of Christmas tree lights, the disposable cups and bags that go straight to landfill because they are just not worth recycling.

But as Minter says, the worst recycling is still better than the best mining. He makes this and other points clear in a book that is at once nostalgic, shocking, entertaining and informative, all without one bit of greenwash.

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Looking out the window of an airplane, streetlights automatically reveal the design and character of a city. They are a kind of municipal fingerprint, and no two are alike.

What they do have in common is that they all run on electricity – and municipalities that pay the bills every year certainly don’t take that for granted. There are an estimated 35 million streetlights across Canada and the United States and together they consume enough electricity to power four million homes.

Los Angeles, for example, had been paying more than $20 million for its fleet of 220,000 streetlights. As part of a massive cost-cutting effort, it decided in 2009 to launch what was then the largest LED streetlight project in North America.

So far, the City of Angels has converted about 140,000 of those streetlights to LED units. The move has paid off. Energy use dropped 63 per cent and the municipality was able to cut its bill by $7 million a year. That excludes the $2.5 million annually it now avoids in maintenance costs, reflecting the fact that LED lamps rarely fail and last three to four times longer than sodium lamps typically used today.

“The product is now mature, it works, it lasts, people are happy with it, and prices have come down,” said Philip Jessup, director of LightSavers Canada, an initiative of the Canadian Urban Institute in Toronto.

Despite this win-win story, Jessup explained, the vast majority of municipalities still haven’t committed to the switch. In the U.S., an estimated 10 to 13 per cent of streetlights are now using LED lamps. Canada, by comparison, is lagging at just under 5 per cent.

This poses a challenge for LightSavers, which wants to see one million or 37 per cent of all streetlights in Canada switched over to LED by 2016. It has found that municipalities, while they generally “get” the benefits of LED streetlights, remain reluctant to commit the upfront capital required to do the retrofits – particularly when most city budgets these days are strained.

In search of strategies to break through this barrier, LightSavers and Corporate Knights convened a small group of municipal, financial, energy and technology experts to explore alternative financing options that might accelerate the deployment of LED street lighting without weighing down municipal balance sheets.

Kerry Wilson, director of commercial strategies for RealTerm Energy, an energy services company, or ESCO, said acceptance of and interest in LED streetlights has shifted considerably over the past three years as municipalities become more educated about the technology and its potential benefits.

As an ESCO, RealTerm offers to pay for and install LED street lighting as part of an energy performance contract. The municipality doesn’t have to worry about providing capital for the project upfront, such as through debt financing. Instead, it makes regular payments to RealTerm based on its energy savings.

Wilson said RealTerm already has 17 performance contracts in place and more than 60 proposals under consideration. “Once you start getting the ball rolling, it catches on quickly.”

The ESCO model, while not new as it applies to energy-efficiency retrofits in buildings, is a fairly recent development for streetlight deployment. The size of the opportunity, however, is attracting interest from non-traditional ESCOs such as lighting giant Philips and from traditional ESCOs such as Johnson Controls, which has some performance contracts in the U.S. and is slowly trying to break into the Canadian market. Many cities remain cautious and talks are slower than anticipated, but Brian Del Vecchio, senior account executive at Johnson Controls, said a positive sign is that negotiations are getting more “rigorous” and “detailed.”

Why the municipal skittishness?

“The perception is that it’s still a cowboy market out there,” said Cynthia Robertson, a principal at Parkridge Consulting. In other words, the relative newness of LED street lamps raises questions about quality control, speed of technology advancement and a lack of market standards.

Will LED lamps for streetlights perform much better five years from now, or be replaced by new technology, or drop considerably in price? Which LED lamp suppliers can be trusted? For some city managers, it may be safer to play wait-and-see.

“If you’re a streetlight manager and your city street lighting already works, why change anything?” said Jessup, playing devil’s advocate during the discussion.

And what about other municipal stakeholders – city treasurers, chief operating officers, the local utility and city councillors? Each represents a different interest or need in the community. The challenge is getting them all on the same page. The good news is that it’s on the radar. In January, the U.S. Conference of Mayors released a survey of 300 mayors, 82 per cent of whom said switching city lighting to LED technology was a high priority.

Not surprisingly, 84 per cent cited budget constraints as the biggest barrier.

It doesn’t have to be.

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With this clout, institutional investors play an important role in promoting sustainable building practices in new construction and existing building retrofits.

“Pension plan-owned real estate companies have done more to drive green buildings in Canada than market demand or government regulation,” says Lisa Lafave, senior portfolio manager of real estate at Healthcare of Ontario Pension Plan (HOOPP). “Our fiduciary mandate to maximize financial returns and minimize the risk of asset depreciation fits very well with green buildings,” she says.

The role big investors can play is varied. They can throw capital behind green developments and retrofits of existing buildings. They can take the step of certifying their assets through green labelling systems such as LEED (Leadership in Environment and Energy Design). They can build sustainability criteria into investment decisions by establishing sustainability objectives for asset and property managers in advance. Asset owners can also choose to openly share their buildings’ energy and water usage data through industry benchmarking programs (when mandatory programs are not in place). Altogether, their actions send the important message that sustainability matters throughout the entire value chain, from material suppliers engaged during construction to tenants who end up occupying the building space.

Such actions tend to lead to stronger returns. Sustainability leaders such as HOOPP and Cadillac Fairview (owned by the Ontario Teachers’ Pension Plan), which are current or previous clients of mine, have consistently outperformed the industry index over the past three years with average real estate returns of more than 17 per cent (compared to an index average 13.6 per cent).

The data shows that green-certified buildings with superior comfort and good air quality have, on average, higher occupancy and less lease turnover. These are probably the most important drivers of cash flow in a building portfolio. As an example, Toronto-Dominion Centre, one of the crown jewels in Cadillac Fairview’s office portfolio, has a 97 per cent occupancy rate, significantly higher than other comparable downtown properties. During the past five years, TD Centre has structured its entire business plan around sustainability excellence and it appears to be paying off.

Sustainability programs also improve operational efficiency, which leads to operational savings. “Investments in equipment and operational procedures can reduce or cap our operating costs,” said TD Centre general manager David Hoffman. “It is a smart decision for our tenants, for our business and for the environment.”

There’s also the long-term perspective to consider. This is the notion that a sustainable building is a way to manage financial risk. Buildings are, per se, more resilient to regulatory changes and market demand when investment criteria such as energy efficiency, climate resiliency, transit-friendly location and healthy indoor environment are incorporated into the investment decision.

This is why in the Canadian commercial real estate sector, LEED certification is a market expectation in core markets such as downtown Calgary and Toronto. Also, many public sector tenants now require green certification. It has become the price to play. However, these tenants will stay longer and contribute to high occupancy rates, which ultimately achieves portfolio return objectives.

Indeed, very inefficient buildings can sometimes become stranded assets. The European Union launched the Energy Performance of Buildings Directive in 2005, where each office building is given an energy performance rating. Now, the U.K. is making it unlawful to lease or sell any building with the least desirable F and G energy performance labels as of 2019.

If the institutional real estate investors’ most important role to date has been to secure meaningful pensions or insurance payouts for its members, their legacy will be at the macro level. Through their current strategies, institutional investors are changing the real estate industry by integrating sustainability into day-to-day management and building industry competencies along the way. At the local level, their contributions reduce the toll on sewers, energy and roads and contribute to improved air quality and human health.

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Sometimes they are abandoned. Sometimes they are forgotten.

David Howell, founder and managing partner of Pipeline Equities in Houston, Texas, considers those old, abandoned pipelines a wasted asset. “The pipe, for the most part, is just steel,” he says. “It’s a commodity, so it can be used and reused over and over again.”

Howell has made a business out of reusing or digging up old pipelines. He’ll often sell the pipeline as scrap metal or, if the pipeline is in good shape, it can be resold for other uses. One client purchased part of a pipeline to use as a water line in Vietnam, while another used it at a copper mine in Mexico.

After Hurricane Sandy, many organizations were purchasing old pipeline parts for use as supports for bridges, docks, railings and other structures. Occasionally, old pipelines are left in place and repurposed as housing for fibre-optic cabling.

“There are lots of old, buried pipelines that nobody knows about, nobody has ownership of, or nobody knows who owns them,” says Howell, adding that he gets weekly calls from landowners or developers who have discovered an abandoned pipeline on their property and want it removed.

More than not, Howell is happy to oblige. “It’s recycling as far as I’m concerned, and it clears title on the land for these landowners.”

Why are landowners worried about abandoned pipelines? Even if out of sight, old and unused pipelines can act as conduits for contaminants and may contain residual materials at risk of leaking. Over time, pipelines can deteriorate and collapse, causing land above to collapse. For landowners, the existence of these pipelines reduces property value and limits what can be developed on the property.

In Canada, it’s unclear how many kilometres of abandoned pipelines exist. The National Energy Board (NEB), which has authority to approve abandonment or decommissioning requests, told CK it does not have a map showing the location of abandoned pipelines within its jurisdiction.

Proposed federal legislation aims to clarify the rules for pipelines that cross provincial borders. According to Natural Resources Canada, “even after a pipeline is abandoned in place without being removed, the NEB continues to have jurisdiction over the abandoned pipeline” and can take steps to “prevent, mitigate and remediate any post-abandonment impacts.”

It says ultimate responsibility – and costs associated with environmental impacts – remains with the company that has operated the pipeline, “so long as the pipeline remains in the ground. But, as David Core, chief executive of the Canadian Association of Energy and Pipeline Landowner Associations, noted during NEB proceedings: “The problem is that pipeline companies – even Enbridge – may not be around to take responsibility for their pipelines, leaving the landowner with the pipes, contamination and resulting environmental liability.”

The post Pipeline problems appeared first on Corporate Knights.

This worldview, shared in principle by other indigenous communities, prescribes the necessity of a harmonious balance between community needs and the fragility of the natural environment, where the nature of existence is viewed as an integrated and orderly whole. Inherent in this worldview is that all humans share equally with other beings a responsibility to maintain positive and regenerative relationships with the natural environment.

Arguably, the majority of human societies will never return to the lifestyles enjoyed by pre-colonial indigenous communities, which must adapt to address the demands of a changing world where success is measured by economic growth, rather than collective well-being and the integrity of relationships.

Dominant contemporary societies have failed to find a balance between human well-being and the health of the natural environment. This failure can be seen not only in widespread poverty, but also in the state of our global climate, the devastation of forests, the volumes of pollutants in our oceans, lakes and rivers, and the extinction rates of flora and fauna species.

Many groups of indigenous peoples are included in the globe’s impoverished demographic. They face conditions of poverty that contribute to negative social, cultural and health related outcomes and are in stark contrast to the living conditions of many indigenous peoples during historical times of minimal colonial influence, which are often described by elders as times of well-being, when no one was hungry or cold, and there was minimal unhappiness.

Seeing poverty in indigenous communities, many people ask, “Why are some indigenous groups opposed to developments?” Or, “Why don’t indigenous people leave their homelands to find work?”

One answer is that many indigenous people are intrinsically connected to a specific land base through their culture. It is their home and their preferred way of life. The lands and waters are foundations of their cultural framework. The opportunity to define new models of economic development that are culturally appropriate is a human right at the very least. It is a concept recognized extensively in the United Nations Declaration on the Rights of Indigenous People. Facing conditions of poverty and cultural anxieties induced by colonial policies, indigenous communities are often left trying to close the gaps of economic disparities with little choice but to compromise cultural appropriation for the sake of economic opportunity.

In my experience, indigenous leaders and community members face two very common scenarios: One, they can choose to defend the natural environment from exploitative activity, and risk receiving no benefit from these activities that may move forward regardless of any opposition. Or two, they may choose to participate as minority, or at best, however rarely, equal partners in developments, perhaps neglecting their indigenous cultural values in the process. In either scenario, a common outcome is negative divisions between those who are pro-development and those who are opposed.

Despite these challenges, I also believe there are alternative models of development that are more culturally inclusive, but require collective compromise and effort to be successful. Lessons in indigenous cultures, translated by people like my grandfather, Umeek Richard Atleo in his publication The Principles of Tsawalk – An Indigenous Approach to Global Crisis, and the visions of social activists such as Paul Hawken, form the foundations of new approaches to development.

For the sake of our future, we must shed economic strategies that are linear and begin to replace them with models that are cyclical and regenerative. The foundations of these models have existed for thousands of years in the collective cultural values of indigenous people. We need to simply see these lessons as best practices and apply them as individuals in day-to-day life and our work. As an example, Hawken suggests that businesses should challenge themselves to redesign systems that reduce the output of waste and internalize the costs of environmental stewardship that are hidden and largely ignored in the free market.

I am by no means suggesting that all development is negative. What I am suggesting is that indigenous peoples have the right to make their own decisions for and about the management of their territorial resources. Also, that a collective effort must be made between indigenous communities, industry, other governments and non-government organizations to reconcile with mother earth and adopt traditional indigenous cultural values in the design and implementation of developments.

We must collectively find a renewed respect for the natural environment, for all of our relationships, and remember the lessons of our ancestors to guide us.

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Yes, celebration is in order. However, a sizable gap remains between this decline in emissions and the GHG reduction targets set by many cities, provinces and states. Toronto, for example, aims to lower its emissions to 30 per cent below 1990 levels by 2020. Closing the coal plants got the city about a quarter of the way to that goal.

In addition to decarbonizing their electricity supply, communities across North America also need to dramatically improve levels of energy efficiency and reduce energy demand if they are to meet ambitious reduction targets. In urban centres, roughly half of the GHG emissions are associated with the energy used to heat, cool and run buildings. Making large structures – condominiums, office towers, institutions and apartment buildings – more energy efficient is the fastest and most cost effective means of addressing climate change.

As they say in the accounting profession, you can’t manage what you don’t measure. That’s why energy reporting is critical to driving down energy (and water) consumption and realizing sustainable, energy efficient cities. Benchmarking, data collection and monitoring – all captured in an energy reporting policy – is emerging as one of the most effective tools to reduce energy consumption on a massive scale. Indeed, throughout Europe and across the U.S., policies have been rolled out mandating that building owners and managers monitor and report their energy consumption levels.

In the U.S., New York City, Chicago, Boston, Philadelphia and San Francisco are among the cities that have implemented such programs. Similar policies, often referred to as an energy reporting requirement (ERR), are being explored in Canada by cities such as Vancouver and Toronto.

Through an ERR, owners and managers of commercial and multi-unit buildings are required to report the annual amount of energy used by their building to an independent third party, usually a government body. In this way, baseline energy consumption for individual buildings is established, as is a baseline for the overall energy consumption of a city’s building stock. Local government agencies can then aggregate emissions information and send back useful data to owners and managers about how their building is performing relative to similar buildings. The data also helps identify local trends in energy consumption and informs the design of effective conservation programs.

By itself, an ERR is not the silver bullet to the problem of climate change. But it is a highly effective approach when used in combination with supporting instruments. Analysis of both voluntary and mandatory energy reporting programs shows that tracking energy consumption and comparing performance among similar buildings leads to an average 2 to 3 per cent improvement in annual energy efficiency rates. Through an ERR, this potential could be applied citywide to generate a significant reduction in energy use. Reductions could possibly be greater still if the reporting requirement is implemented simultaneously with other programs such as conservation demand management initiatives and financial incentives that support energy efficiency retrofits and equipment purchases.

The value proposition of an ERR is multisided, with benefits for consumers, building owners, utilities and the planet. Owners can use superior energy performance ratings to promote their buildings as more desirable and better managed. Operating costs are lowered since less money is spent on energy use. U.S. studies have shown that buildings with green status benefit from higher sale prices, rental rates and occupancy rates compared to non-green labelled buildings. On the other side of the equation, tenants, lessees and buyers can use publicly available information about a building’s energy efficiency to inform real estate decisions in much the same way consumers can compare fuel efficiency rates when buying a car, understanding that the energy performance will affect long-term operating costs.

Over time, the data generated from an ERR will provide a wealth of analytical opportunities for city planners, utilities and academics – and even private app inventors. Collectively, these analyses will inform the programs, policies and infrastructure needed at neighbourhood and district levels to achieve a truly sustainable energy system and meet an ambitious 2050 target of 80 per cent emissions reductions.

As we strive to create energy efficient cities, municipalities should look to energy reporting requirements as one of the first steps to lowering energy consumption on a substantial scale and addressing the dangerous consequences of climate change. Ontario has said good-bye to King Coal. Now it’s time to say good-bye to energy waste in buildings and power up efficiencies instead.

The post Benchmarking matters appeared first on Corporate Knights.

Clean energy projects do not make individual members of First Nations, Métis or Inuit rich – and the same would apply to indigenous communities throughout the world – but they do carry the potential to be a virtuous wealth-creating circle for the community. Hydro, wind, biomass and solar projects are essentially capital infrastructure projects. Ventures are front-end loaded in terms of investment and effort, but also yield energy production and income for generations. The best practice that is emerging is an Aboriginal Clean Energy Capital Circle.

The cycle begins with the pursuit of a renewable energy opportunity, generally with qualified partners. Outputs of a project’s initial business assessment, or pre-feasibility, can include strengthening of aboriginal business planning know-how and improved community decision-making processes. This is only possible with the placement of early stage risk financing by the community, often with assistance from governments and private or utility partners.

The feasibility phase of a project yields further outcomes for the community, including land development experience and project financing capacity.

As a project moves into the construction planning stage, equity investment and debt financing comes into play. This funds the installation of clean energy generating capacity, and has the potential to spin off aboriginal enterprises and employment as well as new community infrastructure (e.g., roads, bridges, accommodation facilities, workshops, equipment yards).

Project earnings and dividend streams from aboriginal clean energy facilities are where the big numbers lie. For medium- to large-scale projects, lifecycle dividends can be in the tens of millions of dollars, or even higher. What then?

Skeptics may think that the situation is ripe for corruption and the misuse of funds. That view is uninformed and simply incorrect. Aboriginal communities are increasingly taking the long view. Indigenous equity in renewable energy projects is more and more often being held in clean energy trusts. These are community owned but independently operated entities. Through democratic, transparent and accountable processes, community members determine the “designated purposes” for the application of clean energy project earnings. More popular designated purposes include youth education, skills training, economic investment in new aboriginal businesses, cultural activities, local health and social services, and community infrastructure.

The experience of the Pic River First Nation located on the shores of Lake Superior, east of Thunder Bay, Ontario, is telling. Over the course of the past two decades, the community has become a partner in several hydroelectric and, more recently, wind power projects developed on the band’s traditional territory. Pic River’s clean energy assets generate income of $1 million a year (and growing rapidly). These annual funds have helped finance a women’s crisis centre, a youth centre, a recreation centre, and cable television and high-speed Internet services for community members. A 60-unit housing project is now under construction.

The James Bay Cree Nation adopted a very similar approach, using a financial settlement related to large hydro developments in northern Quebec as an economic development investment fund. Other communities are following the lead of these pioneering aboriginal communities. The Nelson House Cree Nation (Manitoba), the Hupacasath First Nation (B.C.) and the Dokis First Nation (Ontario) are among several indigenous communities that are establishing clean energy trust mechanisms to build a foundation of sustainable prosperity for future generations.

The governance of aboriginal clean energy trusts needs to be rigorous, complying with Canadian trust law. Trustees, appointed by aboriginal communities, have a fiduciary responsibility to ensure funds are well managed, invested wisely and applied only to designated purposes. Often, aboriginal communities retain a qualified corporate trustee company to assist with regulatory requirements, and an investment manager to optimize returns on capital.

The approach borrows from community and charitable foundations and private corporations that use commercial revenue and endowments for broader social impact purposes. Only in this case, aboriginal equity ownership in renewable energy projects is what provides the funds to kickstart what becomes a long-running generator of sustainable wealth.

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