Sources: Indian Railways, Jetsolution International Services Ltd., Indonesian Motorcycle Industry Association, China Association of Automobile Manufacturers, ICRA, China Automobile Dealers Association, Tokyo Metropolitan Bureau of Transportation, Tokyo Metro, International Chamber of Commerce’s International Maritime Bureau.

The post INFOGRAPHIC: Transportation in Asia appeared first on Corporate Knights.

It hasn’t been discussed much on either side of the border, but it’s an emerging narrative that promises to capture the attention of Canadian and American business and political leaders facing a barrage of economic, environmental, regulatory and market realities – a perfect storm in the making, the size of which is becoming clearer.

Preliminary research from Boston-based energy consultancy London Economics International (LEI) has found that clean power generated in Canada – mostly from new wind and hydropower projects – could generate $14 billion in additional annual export revenues by 2030, possibly sooner, with sufficient development of transmission infrastructure. That’s more than five times the value of Canadian electricity exported to the United States in 2013, meaning a six-fold increase in the value of total annual exports.

The research, in draft form at the time of writing, was co-funded by Corporate Knights and a diverse group of stakeholders in Canada’s energy and environmental community (visit corporateknights.com for more background). It comes on the heels of a report, published in June by the Canadian Academy of Engineering, which describes Canada’s “clean electricity advantage” as having even greater export potential by mid-century.

Enhanced electricity trade between Canada and the U.S. “offers a strategic environmental and economical advantage that would benefit the entire North American economy,” argues the report’s author Jatin Nathwani, a professor of engineering and environment at the University of Waterloo. He is also Ontario Research Chair in Public Policy for Sustainable Energy.

Nathwani estimates that trade could increase from current levels by “10- to 20-fold or higher” to more than $40 billion a year, which would begin to rival current industry revenues from the oil sands. “Such an epochal change is conceivable over a 30 to 50 year time frame consistent with the time lines for 

achieving a low-carbon energy economy,” says Nathwani, calling existing levels of electricity trade to the U.S. “at best anemic.”

To reach its higher export scenario, LEI assumed the existence of a carbon price of $80 per tonne of carbon-equivalent emissions, which heavily penalizes coal-fired power generation. It also counted on a 25 per cent increase in the price of natural gas, which at current prices is considered the main competitive threat to renewable power development.

Under its “high” scenario, wind power from Canada would flow primarily from Alberta, Ontario and Quebec, while hydropower – representing roughly two-thirds of additional clean electricity that could be exported by 2030 – would come mostly from British Columbia, Manitoba and Quebec. Also in play is hydropower from Newfoundland and Labrador, where utility Nalcor Energy is planning two massive developments – Muskrat Falls and Gull Island – along the lower Churchill River.

Those two projects alone are expected to generate 16.7 terawatt-hours of electricity a year, much of it targeted for export. A loan guarantee from the Canadian government – which could prove an effective tool to stimulate other large clean power projects across the country – would reduce financing costs and therefore total project costs.

Just as important, however, is whether U.S. markets would demand it. There are a number of moving parts to consider when assessing demand over a 15-year or longer time horizon and across multiple states and regions. In addition to carbon and natural gas pricing, factors that could drive up U.S. clean power demand include growth in electric vehicle use and the rate at which newly introduced carbon regulations accelerate the closure of coal-fired power stations.

Another potential driver: the decline of America’s nuclear reactor fleet. The U.S. Energy Information Administration (EIA) projects that against the backdrop of rising total electricity demand the supply of nuclear power will likely remain flat between now and 2040. And that’s the good news for nukes. The EIA also warned that accelerated retirement of aging reactors and high cost relative to natural gas and renewables could see nuclear supply plunging by up to 70 per cent, creating low-carbon supply shortages that will need to be filled.

Ultimately, LEI pointed out, one critical question needs to be asked: “Do Canadian low-carbon resources have a comparative advantage in terms of investment costs or operations relative to local generation development in the United States?”

There is evidence that certain American jurisdictions are beginning to look toward Canada as a stable source of clean power and an insurance policy against power shortages. ISO New England, for example, is responsible for keeping electricity flowing across Maine, Massachusetts, New Hampshire, Vermont, Rhode Island and Connecticut. It is forecasting potential shortages in its operating region by 2017.

The next few years alone will see coal-fired plants in Massachusetts and a nuclear plant in Vermont among the facilities targeted for closure, creating a hole in supply that the equivalent of four million homes rely on. The concern has created interest in a number of transmission projects across the region that would allow New England states to import more clean power, particular hydropower, from Canada.

But it’s no slam dunk. Transmission projects, which can carve paths into vast distances of wilderness and pass close to people’s homes, can be just as controversial as oil and gas pipeline projects. Meanwhile, there is concern within U.S. industry that importing clean power from Canada will undermine local developers of renewables and, as a result, steal domestic jobs. Why buy Canadian when you should be building and buying American?

It’s partly why most state renewable portfolio standards (RPSs), which require a certain amount of renewable electricity in a jurisdiction’s power mix, don’t recognize the import of hydroelectricity from Canada. The standards tend to favour electricity from wind, solar and small hydro projects developed within state.

“Friendly state regulations for the import of Canadian hydro energy would go a long way toward increasing American consumption of this low greenhouse gas emitting resource,” Andrew Finn, an associate at the Washington, D.C.-based Woodrow Wilson International Center for Scholars, wrote in a recent commentary in the Toronto Star.

If RPSs were to be modified to recognize large hydro, as some New England states are considering, some observers have argued that the percentage of renewables required in the power mix should be increased to maintain market demand for local wind and solar power.

But barriers to increased Canadian clean power exports don’t just lie on the demand side. Many Canadians are deeply suspicious of using what has historically been – and to a large extent continues to be – publicly owned infrastructure to export power, on the belief that private corporations will benefit on the backs of Canadian ratepayers.

And as Nathwani points out, provinces – which have constitutional control over electrical energy within their territory – have been “paralyzed” by the principle of provincial self-sufficiency. In other words, a province’s justification for capital investments has been based strictly on meeting its own needs. “Trade and export of electricity as part of a deliberate strategy to address the climate change challenge is neither part of the discussion nor an explicit consideration in the planning process or approvals,” writes Nathwani.

That needs to change, and it requires leadership at the federal level, argued a 2010 paper published by the Canadian International Council. “An ad hoc approach to electricity exports will likely preclude our successful capture of the full range of economic opportunities,” wrote the paper’s author, Roger Goodman, a senior consultant with IHS Cambridge Energy Research Associates.

Goodman said a more formal mechanism for power exports, coordinated at the federal level, is crucial. “The Canadian federal government should take on a leadership role but work closely with the provinces, as they are the owners of the resources.”

It won’t be easy, but the opportunity is there to seize and the narrative around it continues to grow. Later this year, research from the U.S. National Renewable Energy Laboratory and Canada’s Trottier Energy Futures Project are expected to shed further light on Canada’s true clean power export potential. 

The benefits are too important to ignore, on both sides of the border. They include improved electrical system reliability, more efficient use of power generation resources, and substantially reduced dependence on fossil-fuelled power generation that has been a major source of U.S. greenhouse-gas emissions.

For Canada, it would help to offset a large portion of carbon emissions from oil sands development, recapturing the country’s past reputation as an environmental leader. This “twinning” of Canada’s electricity trade strategy and climate change goals, as Nathwani points out, “has the potential to deliver economic prosperity with a much lower national carbon footprint.”

But, he adds, it requires “a dramatic shift in thinking.”

The post Powering up Canada’s exports appeared first on Corporate Knights.

Last year, the ILO’s Cooperative Unit, or COOP, launched a survey within the international cooperative movement to find out how the co-op business model is contributing towards sustainable development, how the actors in the co-op movement perceive the debate around the post-2015 development agenda, and which role co-ops should play. The findings from the survey show how cooperatives made a difference in achieving sustainable development goals with concrete actions and engagement at the local level.

A policy brief of the report shows that cooperatives are often present where private or state service providers are unable or unwilling to go. Cooperatives thus play a key role in health and social care, access to financial services, as well as water and energy provision in rural areas in many countries.

They also support more inclusive and equal trade relations and value chains through their engagement in alternative forms of trade, such as fair trade, and contribute to a low-carbon economy through innovative approaches.

How do co-ops support sustainable development goals? First, cooperatives can play a key role in poverty reduction. While savings and credit cooperatives facilitate their members’ access to financial capital, agricultural cooperatives help farmers access the inputs required to grow crops and keep livestock and help them process, transport and market their products.

In Ethiopia, 800,000 people in the agricultural sector are estimated to generate most of their income through cooperatives. In Egypt, four million farmers derive income from selling farm produce through agricultural marketing cooperatives.

Second, cooperatives are major job providers. They employ at least 100 million people worldwide. It has been estimated that the livelihoods of nearly half the world’s population are secured by cooperative enterprises. The world’s 300 largest cooperative enterprises have collective revenues of $1.6 trillion (U.S.), which is comparable to the gross domestic product of Spain.

Cooperatives’ impact employment on different levels: they employ people directly, and they promote employment indirectly through creating market opportunities and improving market conditions. They even influence those who are not members of cooperatives but whose professional activities are closely related to transactions with cooperatives.

Recent evidence also shows that jobs in employee-owned enterprises are less likely to be negatively affected by cyclical downturns and that these enterprises had greater levels of employment stability over the recent economic downturn.

Third, cooperatives are contributing toward gender equality by expanding women’s opportunities to participate in local economies. For instance, 49 per cent of members of the Spanish Confederation of Workers Cooperatives are women, while 39 per cent have directorial positions, compared to 6 per cent in non-worker-owned enterprises.

Meanwhile, women’s presence on financial cooperative boards can be as high as 65 per cent in a developing country like Tanzania.

These are only a few examples, as the report also documents the key contribution from cooperatives in other areas, including sustainable energy production, food security or health services.

Also, cooperative enterprises provide opportunities for specific groups such as informal workers by facilitating the transition to the formal economy. They can help others, such as migrant and domestic workers, move away from poverty and find decent work opportunities.

For example, in Ecuador, the Bella Rica Cooperative formalized artisanal and small-scale gold mine workers, many of them migrant workers, offering them a proper work contract and helping them obtain rights on the minerals mined.

Simel Esim is chief of the International Labour Organization’s Cooperative Branch. This article was adapted from a blog post published by the ILO in early September.

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It proved effective media bait seven weeks before the United Nations climate change conference in Copenhagen. The top politicians from this small island nation had a message they needed the world to hear: The Republic of Maldives will cease to exist if there is not serious collective action – taken now – against climate change.

“Their claim to fame is they are the lowest lying nation on earth,” said Abdulaziz Faghi, a senior energy specialist at the World Bank.

The Maldives is actually an archipelago of 1,192 coral islands stretched across 1,000 kilometres of ocean. It has a population of 385,000, a quarter of whom live in the capital city of Malé. An average ground elevation of less than five feet makes it extremely vulnerable to severe weather and rising sea levels associated with climate change.

It’s an unfair place to be, as the Maldives represents only 0.01 per cent of the global emissions influencing our climate. On a per capita basis, the average Maldivian is responsible for 3.3 metric tons of carbon dioxide emissions annually, or less than one-fifth what the average American emits. But that hasn’t stopped this island nation, located about 400 kilometres southwest of India, from leading by example.

Seven months before his underwater cabinet meeting, Maldives President Mohamed Nasheed unveiled a plan for his country to become carbon-neutral by 2020. To get the ball rolling, the government applied for financing through the $8 billion Climate Investment Funds, which is supported by the World Bank and several other multilateral investment banks.

A detailed investment plan was approved in 2012 and financing secured for a project called ASPIRE, or Accelerating Sustainable Private Investments in Renewable Energy. Looking mostly at solar photovoltaic systems, the plan for Maldives classified the country’s 200 inhabited islands by size and electricity demand, and came up with a price (tariff) that local utilities would pay for solar power under long-term contract. The aim was to make the price enticing enough to lure investment from private developers.

There have already been two investor conferences in the Maldives and a roadshow to Singapore to create regional awareness of the plan. The World Bank’s role is to backstop projects in the event a utility defaults on payment, dramatically reducing investor risk. About 50 islands will be targeted – 10 smaller islands will go completely renewable, while most of the rest will pursue having 30 per cent of their electricity generated from a combination of solar, wind and biomass.

“On its own, it would be very difficult for the government to go to each island and develop that power with public financing,” said the World Bank’s Faghi, who is working on the project and leading an associated initiative that aims to map all the country’s renewable resources. He makes clear this isn’t just about reducing emissions as some kind of martyrdom in the fight against climate change. “The tariff would be lower than the cost currently paid for diesel, so that works out well for the local utilities,” he said.

The Maldives currently spends up to 20 per cent of its GDP on fossil fuels for power generation and as a marine fuel. All oil must be imported, and shipping relatively small volumes to a remote location doesn’t come cheap. The cost of generating electricity from diesel generators, for example, ranges from 31 to 46 cents per kilowatt-hour. Purchasing solar power for 25 cents or less and wind power for less than 15 cents is a bargain by comparison.

In other words, transitioning to renewables is viewed as an economic imperative. “It’s just unsustainable for such a small country to spend so much on fossil fuels,” Faghi said. “This is a poor country that needs to spend more of its money on education, health and other social sector services.”

Island economics

The push has been on for the last decade to get more island nations to embrace renewable energy as a replacement for diesel. And falling technology costs, particularly around solar power, has created an opportunity that’s becoming increasingly difficult to overlook.

“Going forward, investing in domestic renewables makes more economic and environmental sense over continued imports of expensive and polluting fossil fuels,” according to a 2008 report from the Global Energy Network Institute, which attempted to quantify the renewable energy potential of 71 island states.

It estimated that all island states collectively spend more than $90 million (U.S.) each day importing oil, assuming a price of $100 a barrel. “In a time when oil prices are soaring and the effects of climate change are evident, using renewable sources for energy shouldn’t be seen only as a great investment or moral issue,” the report concluded. “It should rather be seen as a great investment with great moral value for the present, especially for small island states.”

Activity has intensified over the past year. The United Nations, having declared 2014 the International Year of Small Island Developing States, held a conference in Samoa in September and clean energy was a focus of discussion. One particular hotspot appears to be the Caribbean, where the 15 island states that are part of the organization Caricom recently committed to a regional renewable power target of 20 per cent by 2017 and 47 per cent by 2027.

“It is now up to member states to make the targets a reality through political and financial reform,” said Alexander Ochs, director of climate and energy at the Washington, D.C.-based Worldwatch Institute, which is helping Caricom develop its plan.

Adding momentum to the effort is the Carbon War Room’s Smart Island Economies program, which has challenged 10 Caribbean islands to aggressively begin the transition from fossil fuels to renewables. Four islands have so far signed up, including Aruba and Grenada, with the Turks and Caicos and Bahamas expected to join shortly.

“In the Caribbean, their power mix is anywhere from 97 per cent to 100 per cent fossil fuels, and their electricity sector essentially runs on diesel generators 24 hours a day,” said Justin Locke, director of islands for the Carbon War Room, which was founded by billionaire Sir Richard Branson.

Locke said most of these islands import their fuel from Venezuela and the cost has led to some of the highest regional electricity prices in the world. Moving away from diesel to renewable energy is a “no-brainer,” he added. “The political stars have aligned, and really everyone wants to move in that direction. It’s just a matter of how from a policy and ownership perspective.”

Storage key

This is creating huge opportunities for companies like Toronto-based Hydrostor, which last October signed an agreement to supply energy storage services to Aruba’s main power utility, WEB Aruba N.V.

Hydrostor stores energy as compressed air that is pumped into large expandable cavities – kind of like big industrial-strength balloons – that are anchored to the bottom of the ocean floor. Aruba’s utility will use wind power to inject air into the cavities when there is a surplus of supply. When the wind isn’t blowing and extra electricity is needed, the air, which is under immense pressure from the ocean water above, is released to spin a turbine that generates power.

“We’re due to break ground on the facility in late 2014 and get it up and running in the first half of next year,” said Curtis VanWalleghem, chief executive of Hydrostor. The contract calls for 1 megawatt of storage that can run for six hours, but there is already talk about doubling the size of the facility. “Once they reached 15 per cent to 20 per cent renewables in their mix, they knew they needed to get into storage. The utility wants more wind because it’s cheaper than diesel, but they can’t get any more cheap wind without that storage.”

VanWalleghem said Aruba, which wants to become energy independent by 2020, is on track to get more than 50 per cent of its power from renewable sources later this year through a combination of rooftop solar and wind power, the latter taking advantage of the island’s constant windy conditions. It already stores energy in the form of ice blocks, which are created when there is surplus power. The ice is then later used to supply air conditioning in hotels during peak times when power is in short supply.

The Hydrostor system will help to further balance Aruba’s grid, which will become a showcase for the company’s technology. Already, word is starting to spread. “Storage seems to be hitting that turning point. It’s on everybody’s radar now,” VanWalleghem said.

Bye bye diesel

Six thousand kilometres across the Atlantic Ocean, off the coast of North Africa, one island recently achieved what could one day become commonplace in small island countries: a grid powered 100 per cent by renewable energy.

El Hierro, the smallest of Spain’s seven Canary Islands, officially announced in June that it was no longer dependent on diesel fuel for its electricity supply. Since 2005, island officials and private partners have been implementing a plan to install five wind turbines with a combined generation capacity of 11.5 megawatts, as well as a massive pumped-storage hydroelectricity facility capable of generating an equal amount of power.

Surplus wind is used to pump water from a lower reservoir to a higher reservoir. When there’s not enough wind, water in the higher reservoir is released by gravity to the lower reservoir, generating power along the way.

“Nobody compares to El Hierro,” said Jose Etcheverry, a professor of environmental studies at Toronto’s York University who has followed the project closely. “It’s the first system of its kind built with renewables and storage in mind, and at this kind of scale.”

Not only does this wind-hydro system give El Hierro complete energy security, it has helped to create local jobs and skilled workers. It has also inspired El Hierro to go even further: The island’s renewable power system is being leveraged to encourage electric transportation, ecotourism and organic agriculture.

Pursuing such a path on a remote island is not without its challenges, Etcheverry said. The technology chosen has to be reliable, and much advance work must be done to train local workers on how to operate and maintain the systems. “That’s probably their biggest challenge, because if you make one mistake you’re in trouble. Equipment parts are hard to get, so you can’t afford those mistakes.”

The hope is that the learning done on El Hierro will spread to other islands in the Canary archipelago, where fuel costs are currently heavily subsidized by Spanish taxpayers. “They just need to redirect these diesel subsidies into renewables,” Etcheverry said.

All islands are different in their own way – for example, the Maldives doesn’t have the geology to support a pumped-storage hydro facility – but as more of these isolated communities experiment and implement, there’s a sense that the transition to renewables will pick up speed.

“We’re targeting about 30 or 40 islands right now,” said VanWallegham. “But a day doesn’t go by that we don’t get contacted by someone, somewhere.

The post Islands on the front lines of climate appeared first on Corporate Knights.

Most of the disasters cited were of the kind expected to become more severe and frequent due to climate change – damage and life loss associated with flooding, storm surges and high winds. Flooding rivers alone are expected to affect 380 million people globally, most of them in Asia.

Developing countries in this area of the world, by many measures, are at a crossroads. Together, they are home to a majority of the world’s poor. According to the Asian Development Bank (ADB), more than 600 million still have no access to electricity and nearly two billion still use highly polluting firewood and charcoal to cook food and heat homes.

At the same time, these countries are growing fast – and we’re not just talking population. Myanmar, which we profile on page 54, has seen its GDP grow 6 per cent to 10 per cent annually since 2000. That range of growth, shared over the past decade by economic titans such as China and India, is expected to continue as Myanmar opens up its economy to the world.

Such growth has its consequences. For one, it has created an insatiable appetite for energy, demand for which is growing faster than GDP. By 2035, developing Asia is projected to account for 56 per cent of worldwide primary energy use. That’s up from 34 per cent in 2010, according to ADB. Where that energy comes from – renewables, nuclear or fossil fuels – has huge implications for the climate and global sustainability.

The impact on public health also cannot be overstated. The Lancet, one of the world’s most respected medical journals, recently dedicated an entire issue to what it called a health “time bomb” ready to go off in China. Rising standards of living have also driven an increase in obesity and substance abuse. This, along with environmental pollution caused by a fossil-fuel dependent energy system, has boosted rates of cancer, heart disease and diabetes. Such chronic diseases, according to an editorial in the journal, “are now China’s number one health threat.”

Change is happening. Geothermal is being developed in Indonesia. Growth in coal use in China is starting to fall. India has embraced solar. Myanmar is working to put more social and environmental safeguards in place. And island nations like the Maldives, which we spotlight on page 54, are pursuing aggressive adaptation strategies. But is it enough? Is it happening fast enough?

Clearly, when it comes to sustainability performance, some countries in the region are doing better than others. Perhaps not surprisingly, Singapore ranks at the top of the list. This is according to Corporate Knights’ first Sustainable Asia Scorecard, which ranks all countries in Asia (as defined by the United Nations Statistics Division) across 25 sustainability indicators.

These indicators cover a lot of ground – from each country’s natural, human and social capital to health, quality of life, education and gender equality.

[highcharts chart=’4264′ performer=’ALL’ measurement=’Total’ order_field=’Total’ order=’DESC’]

To download an Excel sheet of the data used to calculate this year’s ranking, click here.

Of the 50 countries assessed, it is no surprise that the Top 5 (and six of the Top 10) are considered by the International Monetary Fund to be “advanced” economies – Singapore, Japan, South Korea, Hong Kong and Israel, in that order, with Cypress coming in ninth.

The rest would be considered “developing” or “emerging” economies. Of these, Malaysia ranked highest (sixth place) followed directly by Turkey and Thailand. China just squeezed ahead of Indonesia to take 10th spot.

Looking at all the data, Corporate Knights walked away with the following observations:

• Hong Kong scored highest on energy and greenhouse-gas emissions productivity, while Singapore got top marks for water productivity. Being among the most resource-deprived countries in Asia, the need for them to embrace efficiency of resource use makes sense as a matter of survival.
• In places like South Korea, we saw a direct correlation between rates of education enrolment and number of patents per unit of labour. Generally, the higher the education rates, the more patents produced per capita.
• More advanced Asia economies tend to have a greater inequality gap.
• There is generally a direct relationship between higher GHG productivity and life expectancy.
• The Philippines, which at 14.6 per cent has the highest percentage of non-hydro renewable power in its mix, scored second best on the air pollution indicator

Perhaps our most surprising observation is that there is no obvious relationship between urban air pollution and life expectancy. Deaths are probably caused by a host of other environmental, social and demographic factors.

Click here to go back to the ranking landing page.

The post Sustainable Asia appeared first on Corporate Knights.

The Transboundary Haze Pollution Bill will also make it possible for individuals and businesses to sue companies operating outside the country for the physical and financial suffering that they endured from the air pollution.

The bill is a response to the disturbingly rapid destruction of Indonesia’s tropical forests. While companies are burning trees to make way for the palm oil industry, neighbouring Singapore is stuck under a thick haze, which culminated in the worst day of air pollution on record last year.

“We have sent a message to all companies that if you harm the environment and damage the health of our people, we will find ways to hold you accountable for that,” said Vivian Balakrishnan, environment minister for Singapore, who is behind the bill.

In an interview with Corporate Knights, Balakrishnan said the bill addresses a predicament that all cities face: “You can try to be the cleanest, greenest place in the world, but your neighbours have to have similar standards.”

While he acknowledged the bill is only effective to the extent that all countries in the region collaborate on surveying companies’ actions and holding them accountable, Balakrishnan said the government is steadfast in its commitment to defending its air quality.

It’s an example of leadership that put Singapore at the top of Corporate Knights’ Sustainable Asia Scorecard.

Singapore scored top marks for the way it conducts its economic activity in light of the rising costs of water resources, which is notable in a country where water has long been an existential issue.

Singapore started to focus on water as a key growth sector in 2006 to end its reliance on imports from Malaysia. It has since committed $470 million to promote research and development in the water sector and now generates half of its water supply internally thanks to purification and desalination projects.

The country also led the ranking on our natural resource depletion indicator, which looks at the extent to which consumption of resources is sustainable at current economic activity levels.

This is quite an achievement, considering Singapore is almost completely devoid of resources. “We have no oil, no gas. We import our water, everything we eat, the clothes we wear, everything we consume,” said Balakrishnan. This has created a culture where there is no room for waste.

The country also beat out its opponents on human development indicators, such as justice, regulatory quality, gender equality and transparency, as well as on account balance, which measures the extent to which the country can fund continued economic activity.

Balakrishnan attributed Singapore’s successful greening to three things. While its lack of space and resources seem to be stacked against it, the country is at an advantage because it is simply too small to tolerate pollution from the dumping of toxic materials, he said.

Second, the government understood early on that a densely populated city-state made out of concrete would have a negative psychological impact on its citizens. For the sake of everyone’s mental health, the government worked with homeowners to build a garden city that would soften the experience of living in close quarters.

Finally, the country’s complete lack of subsidies for food, water, electricity and energy means that citizens have a monetary incentive to think twice about how they use resources.

While some residents may be willing to pay the extra price to live in a sustainable city, it is worth noting that Singapore has the second-largest gap between the rich and the poor out of the Top 10 countries ranked, second only to Hong Kong. This means the garden city-state has a long way to go in terms of giving its citizens fair access to its limited resources.

But in Balakrishnan’s view, there is synergy between a healthy environment and a strong economy. Future economies will depend on ideas, and the most sustainable cities will attract the most talented residents. He said cities that have the technology and knowledge to deal with the future challenges of climate change, such as increased global epidemics and scarce resources, will have an advantage in the global market. 

He pointed to Singaporean water companies as an example of an industry that is turning this challenge into a global opportunity. Based on their track record at home, these homegrown companies can now say to the world: “Take a look at what we have done. You know we can deliver.” 

Click here to go back to the ranking landing page.

The post Singapore: The garden city-state appeared first on Corporate Knights.

In the newsrooms and watering holes of Phnom Penh, the two expressions were read as a telling contrast between “nice guy who’s trying” and “Nobel Peace Prize winner.” If these two Southeast Asian reformers represented the best hopes for their troubled countries, most would have put their money on Suu Kyi and Burma. Cambodia was just three years removed from a historic United Nations-sponsored election, but it was already sliding into what one scholar notably described as a “vaguely communist free-market state with a relatively authoritarian coalition ruling over a superficial democracy.”

Burma, on the other hand, still seemed to have a political future worth looking forward to (even if it was under the name Myanmar), and the unexploited economic potential to back it. Suu Kyi’s infallible, principled resistance to the thuggish junta made her country a cause célèbre and appeared certain, even then, to put it on track for better things.

Just two years ago, that promise finally felt within sight. Isolated and aging, Burma’s military leadership had begun implementing its “roadmap to democracy,” with reformer Thein Sein emerging as the first civilian president in decades. Suu Kyi and other dissidents were released; she won a seat in parliament and toured foreign capitals in a blaze of publicity and optimism. Ordinary Burmese gained impressive new freedoms and the doors were thrown open to liberalization, investment, currency regulation and the end of foreign sanctions.

To hear their stories told this way, these two countries appear to have emerged from economic and social ruin in very different shape. But while Burma still has prosperous potential, it’s treading perilously close to Cambodia’s path – cronyism, corruption, land grabs, social and environmental exploitation. In the short time since the easing of foreign sanctions and Suu Kyi’s triumphant foreign tour in 2012, elements of “reformed” Burma have begun to resemble that ugly characterization of its neighbour. It may yet end up taking the wrong path unless its foreign partners, including Canadian investors and political leaders, show the resolve to demand better.

Land grab

If a single word can be used to sum up what’s animating the economic and political transitions of both Cambodia and Burma, it is “land.” Cambodians and now Burmese have emerged from their isolation with severely underdeveloped economies and labour forces that will require generations to rebuild, but the value of their underdeveloped land, and what can be extracted from it, is real and immediate.

The paranoid Khmer Rouge shattered the lives and livelihoods of millions of Cambodians, but its experiments in agrarian socialism had the effect of a perverse form of environmental conservation. Burmese military rule left a larger footprint – black-market logging, destructive gem mining and a cavalier attitude toward delicate ecosystems – but much of the country’s prime land emerged underexploited due to sanctions, civil war and the sleepy pace of its ox-cart economy. The sudden embrace of open markets, growth and resource exploitation has inevitably created Wild West conditions in the rush to exploit these two Far Eastern “frontier” states, along with tiny Laos.

Despite years of advocacy by international NGOs, illegal timber exports continue to significantly erode the forest cover of all three countries to feed the needs of neighbouring Thailand and China. In past decades, this trade fuelled civil conflict; today, it largely benefits Burma’s powerful military and business elites, working with the regional rubber firms that have been sweeping across Southeast Asia, acquiring land for plantations to feed global demand.

Resource extraction, which was a tricky business for Western firms in Burma under the watchful eyes of sanctions and Western public opinion, is proceeding apace, with all that entails. Gems and precious metals continue to leave a particularly dirty stain. Working conditions have been widely deplored and the infamous Letpadaung copper mine has tripped up many of those involved in the project – from former Canadian partner firm Ivanhoe, which remains locally reviled, to Suu Kyi, who headed an official committee that allowed the project to proceed against the wishes of local villagers.

Meanwhile, Burma’s government is pushing ahead with a panoply of energy projects, auctioning off oil and natural gas rights to multinational firms and advancing plans for dozens of new hydroelectric dam projects. For a country with chronic power shortages, this should be a no-brainer, but most of the new capacity is for export and the environmental and social costs of the infrastructure have been exorbitant.

Next Cambodia?

Consider the massive Myitsone Dam project at the headwaters of the Irrawaddy River, intended to generate up to 6,000 megawatts of power, most of it for the Chinese province of Yunnan. Thousands of Burmese were forcibly relocated and experts warned of widespread environmental and cultural destruction before the government suspended the project, citing local sentiment. With the government under intense Chinese pressure, it would hardly be a surprise if construction resumes following next year’s elections.

With weak regulations and enforcement practices, immense environmental and human consequences are already evident elsewhere in Burma. Villagers, farmers and remote tribes with traditional land claims, but no formal title, have been forcibly relocated or marginalized with little compensation or sympathy, and the country’s vaunted biodiversity is under threat due to habitat loss and the trade in endangered species. Black-market logging has been reorganized and legitimized through Rangoon-area ports, which observers believe allows for the “laundering” of logs illegally cut in disputed or ethnic-conflict areas – one of the issues fuelling conflict between the government and ethnic minority groups. Even the feel-good tourism industry, which has developed at breakneck speed, has brought unexpected costs, including environmental damage and overdevelopment at Inle Lake, a world-renowned tourist attraction even in the bad old days.

There are many similarities to Cambodia, where land grabbing, forced relocation, exploitative work conditions, corruption and ethnic strife are familiar parts of the landscape.

Burma “stands at a crossroads,” says Ali Hines, a campaigner with British-based environmental NGO Global Witness, which has done high-profile work in both countries for years. “Either it can continue down the path of its neighbours – whose limp efforts at reform do little to mask a de facto policy of land grabbing and cronyism – or it can use its natural resources to drive the sort of equitable national development that is needed to set the counter on a more stable, more sustainable course.”

Getting it right

For Canadians who have or want a stake in Burma, these trend lines should be cause for concern.

Will nascent reforms, such as transparency in oil and gas contracts, be strengthened and enforced, or allowed to wither on the vine? Will effective legislation be passed to properly and fairly establish land title and regulate its use and sale? Will pervasive cronyism and corruption be allowed to flourish? Will consultation and popular will play a greater role in weighing the fate of mega-projects like the Myitsone Dam? Will restrictions on Suu Kyi’s path to the presidency, currently blocked by junta-era legislation, be lifted – or have her principles and promise merely been co-opted by a junta with a friendlier face?

The answers to these and other questions are not yet certain. But this is where the outside world Burma has been courting – including Canadian investors, political leaders and even the public – can make a difference.

Like the leaders of many emerging quasi-democracies, Burma’s government, military and oligarchs are walking a fine line with their foreign suitors. In essence, they say: In order to make money with you, we will undertake an amount of reform that satisfies your business and political requirements.

So how badly do we want to make money with Burma? And what amount of reform will satisfy our standards? These are the international community’s bargaining chips.

In Cambodia, where reform has gone so badly off the rails, growth has been high but the amount of money to be made was still relatively small (its economy is defined by agriculture, tourism and low-cost labour). But international standards for reform were similarly low. The defining issue for Cambodia’s foreign suitors was justice for victims of the Khmer Rouge regime, responsibility for which was tangled in regional rivalries and Cold War politics. Prime Minister Hun Sen, in power for nearly 30 years, has a singular talent for delay and obfuscation, and the Khmer Rouge tribunal process has been dispensing justice in a slow trickle for more than 15 years now – just fast enough to keep foreign aid and investment on the hook.

Bar set low

There is no similar defining issue to distract the international community in Burma. But the amount of money to be made is much higher than it was in Cambodia. The Burmese economy is already twice that size, with a much richer resource base and four times the population. And Burma’s sanctions-era business partners (Thailand and China, notably) set a very low bar for reform. Can Western firms with checkered records of their own, such as Canadian resource companies, be counted on to raise it?

“Canadians and Canadian companies are urged to remain vigilant and ensure that they engage with individuals and companies of the highest ethical standard … it remains the responsibility of individual companies to ensure their activities are within legal parameters and beyond reproach with respect to integrity,” Foreign Affairs Minister John Baird and International Trade Minister Ed Fast advised in 2012, as Canada announced its intention to open an embassy in Burma.

To that end, international money has largely been concentrated in high-profile industries such as oil and gas, tourism and telecommunications – foreign investments “are largely contracted on the basis of intentional standards where transparency is not a problem,” says Derek Tonkin, a former British diplomat who now serves as an adviser to investment firm Bagan Capital.

But sustained change will take time and commitment by both investors and governments. Before they make their money, Burma’s new foreign partners need to demand more: clear, fair rules for foreign investment and domestic politics; the disavowal of cronyism and corruption, official and unofficial; consideration of social and environmental impacts of potential investment projects; incorporation of best practices and corporate social responsibility; understanding and accommodation of local context, culture and relationships.

Although some (including Burmese-Canadian democracy advocate Tin Maung Htoo) have argued that the threat of sanctions should be maintained, it’s clear that Burma is now open for business. Economic opportunities abound and Canadians can no longer be expected to stay out on principle or nervousness at dealing with what remains an unsavoury regime. But as they engage, they need to keep pushing back. They could start by asking what kind of Burma they want to deal with in the future: another Cambodia, or something better?

Guy Nicholson is deputy comment editor at The Globe and Mail. He was foreign editor and managing editor of The Cambodia Daily in Phnom Penh from 1996 to 1999. 

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It is true that many asset managers have taken steps to integrate ESG data into the way they manage their portfolios, but the vast majority of the world’s $60 trillion in assets under management is not subject to this type of analysis.   

The mainstream’s skepticism about ESG is understandable. On a theoretical level, it is not always obvious that a good ESG performer would be a good portfolio performer. And even for those investors that are keen to explore ESG investment strategies, there are other, more practical challenges. For instance, ESG data has only been around for about a decade – a pittance in an industry that spans more than 140 years.

While this doesn’t mean that ESG analysis isn’t valuable, or that companies with good ESG performance cannot be good financial bets, it does mean that investors can’t conduct the kind of long-term financial backtests that they’re accustomed to building to evaluate new investment theses.

Another challenge is that many of the third-party vehicles that investors have historically used to integrate ESG into their portfolio decision making, including ESG ratings, are often “black boxes” – that is, they’re difficult for outsiders to break down, test and understand.  

To help investors overcome some of these barriers, Corporate Knights Capital built a new application that we call Sustainable Beta – what we believe to be the world’s first interactive sustainable portfolio construction tool. It’s not a panacea, we know, but it can help demystify sustainable investment strategies and, perhaps most importantly, it can transparently show how ESG data can be used to boost – not harm – portfolio performance.

(To test-drive Sustainable Beta, go to corporateknightscapital.com, select “Our Services” and then go to “Portfolios.”)

Users of Sustainable Beta are invited to build their own equity portfolios using five different inputs. First, select your market. Options include Australia, Canada, Europe, Japan and the United States. Next, select the specific ESG factor you would like to test. Five factors can currently be tested: Board Diversity, Carbon, Energy, Water and Tax.

Once these two fundamental decisions are made, you then decide how the portfolio should be normalized (e.g., how the ESG factor should be measured), how it should be weighted (e.g., by market capitalization or equal weight) and how often you would like it to be rebalanced (annually, semi-annually, quarterly or monthly).

After selecting all of the inputs and generating a portfolio, you can see how the portfolio would have performed against the major benchmark in your selected market (e.g., S&P 500 in the United States) from as far back as January 2008 up to the end of June 2014. 

The tool typically builds portfolios by scanning all companies that are available in the chosen market and selecting those that perform favourably on the chosen factor.  

Many of the portfolios that can be built on Sustainable Beta fail to beat their benchmark. For instance, an annually rebalanced market capitalization-weighted portfolio of Canadian carbon leaders (normalized by sales) would have underperformed the S&P/TSX Composite by 9.9 per cent from January 2010 to June 2014.  

But some portfolio permutations significantly outperform their benchmarks. For instance, an annually rebalanced, equally weighted portfolio of U.S. carbon leaders (normalized by number of employees) would have outperformed the S&P 500 by an astonishing 41 per cent from January 2008 to June 2014.

More analysis would be needed to properly attribute this outperformance – the weight scheme, for example, is sometimes a more significant determinant than the sustainability factor – but these and other results certainly call into question the orthodoxy that sustainable investing is doomed to underperform.  

Sustainable Beta is unique because of its transparency and flexibility. We are not aware of any other publicly available portfolio construction tool that lets users explore such a wide range of sustainable investment strategies. If it can play some role in the mainstreaming of ESG investing, it will have been a success.

We encourage you to give it a try.

The post Create a sustainable portfolio appeared first on Corporate Knights.

As for the title, Winston explains it this way: “If you believe that these pressures are real, then what has until now been called green business, or sustainability, cannot be a side department or a niche conversation in commerce.” Indeed, he continues, “we must pivot – sometimes painfully, always purposefully, so that solving the world’s biggest challenges profitably becomes the core pursuit of business.”

But first, Winston has to convince us about the seriousness of the challenges we face, and it’s a tough sell. He presents the hard data on climate change, but admits that it is easy for some to write off because the warming numbers don’t sound particularly scary; having shivered through this Canadian summer, they sound actually quite pleasant. He quotes one scientist: “You almost couldn’t design a problem that is a worse fit with our underlying psychology.” It’s so true. Unfortunately, for a short book a lot of space is given to a subject that most readers already know, yet it is not likely to change the minds of skeptics.

The mega-challenge of resource scarcity, however, is more immediate and obviously a business problem as commodity prices go through the roof and water becomes scarce. Food prices also increase as corn, soy and palm oil are diverted to biofuels; water supplies are challenged as they’re diverted to lawns and fracking. The business case for a big pivot here is more compelling.

The final mega-challenge is the challenge of transparency. Winston claims that every company that wants to remain competitive needs to answer tough questions about its supply chain and its environmental and social performance, “especially the ones coming from business customers.” Everybody is watching and there is nowhere to hide, so companies have to clean up their act. Or, as author and new-economy thinker Don Tapscott puts it, “If we’re all going to get naked, we better get buff.”

Winston is least convincing here. Transparency is a challenge, yes, but doesn’t seem to have a “mega” quality. There doesn’t appear to be a whole lot of buffing up of corporate bodies going on – at least not across the board. Lobbying still continues by some industries, such as “Big Ag” and the chemical industry, to block laws aimed at increasing transparency. In Germany, some politicians are even considering switching from computers to typewriters to stop prying eyes.

Most of Winston’s 10 “radically practical strategies” will be familiar to regular readers of Corporate Knights as part of the ideal of Clean Capitalism; titles like “Fight short-termism” and “Set big science-based goals” will ring a bell. However, the final strategy is more than a big pivot, it’s a whole new spin: “Build a resilient, anti-fragile company.”

Diversity makes organizations stronger. Variety makes crops more pest- and weather-resistant. A company, Winston writes, “with just one product line, technology or service that brings in the vast majority of its profits is at great risk.” He describes how a flood in Thailand nearly closed Honda when the only factories producing a few critical parts lost production. “A bit of redundancy in the system might be worth the expense if it avoids serious and expensive disruptions.” Indeed, resilient companies mimic nature, which gives us backup kidneys and eyeballs. Nature doesn’t put all its eggs in one fragile basket.

Winston is a techno-optimist who believes that if these strategies are followed we can build a resilient, green and profitable world. He thinks that the coal industry will be gone and that fossil fuel companies will either get into renewables or become much smaller organizations. It’s a stretch when Canada is building pipelines and the U.S. is shipping coal to China that’s too dirty to be used in America; where Scotland is basing independence on new North Sea oil finds. But perhaps that’s just my short-termist thinking.

The post A pivotal moment for business appeared first on Corporate Knights.

The floor was wet. He was immediately electrocuted.

The next day, inspectors with WorkSafe New Brunswick began probing the tragedy. In December 2011, they released their assessment of what went so wrong that winter evening. Walmart Canada, the agency concluded, had failed in numerous ways to protect the young employee.

The supervisor didn’t notice that Desjardins was using an inappropriate polisher and faulty chord. The company didn’t provide proper equipment training, nor had it done routine inspections. The agency laid several charges against the $460 billion-a-year retail giant, as well as Denis Morin, the supervisor in charge.

The story of Desjardins’ death offers a glimpse at some underlying dynamics in the field of occupational health and safety. The mythology of Canada’s hinterland includes tragic tales of collapsing mines and sinking freighters. In our big cities, newspapers publish wrenching stories of construction workers who fall to their deaths while building highrises. 

But there’s a new, underreported economic reality. Changes in the economy have altered the geography of workplace injury. With the offshoring of heavy industry and the rise of the urban services sector – with its endless supply of part-time work – new forms of risk have emerged. And new classes of workers find themselves put in harm’s way as they earn a living.

There were 584 workplace fatalities in Canada in 2012, up from 484 deaths a decade earlier. The number has been rising gradually, although with 703 deaths 2005 stands out as the most deadly year. Those broad figures mask a more complicated tale, however. Manufacturing and construction remain the most dangerous sectors, accounting for about two-thirds of all deaths. But between 2002 and 2012, the average annual number of fatalities in other sectors often associated with high-risk conditions (logging, agriculture, mining and oil wells) fell compared to the previous decade.

By contrast, the greatest decade-over-decade growth occurred in retail/wholesale, education, hospitality and healthcare/social services – sectors we don’t associate with mortal danger. It may be time to reconsider. In 2012, 12 per cent of Canadians killed on the job worked in these fields, up from 10 per cent a generation ago. Between 1993 and 2012, 516 retail workers were killed on the job, including Desjardins.

Fear factor

The fatality data represents a small slice of the bigger picture. Workplace injuries overall seem to be falling in Canada. In British Columbia, for instance, almost 145,000 workplace injuries – everything from broken bones to soft-tissue disabilities – were reported to WorkSafeBC. That figure is almost 30,000 claims less than the pre-recession peak. Similarly, Ontario’s Workplace Safety and Insurance Board says that despite 8 per cent population growth in the past decade, the number of injury claims fell by 6 per cent.

Yet in the low-end service sector, the raw numbers may not tell the whole tale, say union health and safety reps and occupational safety experts.

Kathy Yamich, a WSIB representative with the Niagara Falls, Ontario, office of Workers United Canada, observes that in the hotel sector, women who clean rooms risk strain injuries when they lift heavy mattresses and race to meet their daily quotas. Most are recent immigrants, and many don’t speak English. “There’s such a fear factor in those workplaces that they’re not reporting their injuries.”

Hospitality isn’t the only sector that experiences under-reporting. In an aging society, home care has emerged as a fast-growing employment ghetto, dominated by new Canadians. With health ministries pushing aging-in-place policies as a means of keeping seniors out of long-term-care facilities, demand has jumped.

But Bill Hulme, the community care lead for the health care local of the Service Employees International Union, says personal support workers and home care nurses face a range of hazards when they enter someone’s home – everything from fierce dogs to environmental risks, like apartments infested with vermin or packed with the stuff accumulated by a client with hoarder’s syndrome. His union also represents members who’ve been sexually assaulted – another injury that doesn’t show up on workers’ comp stats.

Similar conflicts occur at group homes, where the residents may be out on parole after serving time for criminal code offences. Employees may be beaten up, says Hulme, but the group home operators are reluctant to notify police for fear of losing the resident. “There’s a disincentive for them to report incidents.”

Chronic problem?

In New Brunswick, the Desjardins incident resulted in a court-imposed fine of $120,000, the highest ever levied in the province, even though the presiding judge said the accident wasn’t a case of a company putting “profit ahead of safety concerns.” The figure is a rounding error on Walmart’s balance sheet, but the message was nonetheless clear: pay more attention to the wellbeing of employees.

To its credit, Walmart Canada took Desjardins’ death seriously. According to spokesperson Andrew Pelletier, “We reviewed and enhanced our workplace safety policies and programs. This includes improvements and additions to our health and safety training, extensive and ongoing communication to our associates on a wide range of important health and safety topics, and detailed monitoring of the implementation and execution of our health and safety programs.”

But just a month before the company agreed to the terms of a New Brunswick court order to improve its Grand Banks store, the company’s U.S. parent was grappling with a major safety push by inspectors with the Occupational Safety & Health Administration. After scrutinizing a store in Rochester, New York, the OSHA released a damning report and issued a stiff fine. 

According to a press release, “The Rochester inspections led OSHA to identify fall hazards, obstructed exit routes, an absence of lockout/tagout procedures for energy sources that would allow employees to safely perform maintenance on a compactor, an unguarded grinder, no training for employees using personal protective equipment, a lack of eye and face protection, and a lack of information and training on hazardous chemicals in the workplace.”

It wasn’t the only store with problems. The OSHA identified Walmarts in several other states with a similar disregard to maintaining a low-risk workplace.

The Bentonville, Arkansas, giant wasn’t a stranger to such controversies. Four years earlier, Jdimytai Damour, a 34-year-old Walmart employee in a small New York State town, had been trampled to death during a Black Friday pre-dawn sale after a crowd of crazed shoppers stampeded. The chain refused to pay the OSHA’s $7,000 fine and is still appealing the OSHA ruling. 

As for the numerous infractions at Walmart’s Rochester store, the company last year struck a deal with the U.S. Department of Labor to make broad safety and training improvements at almost 2,900 stores in the 22 states under OSHA jurisdiction. The company paid a $190,000 fine, bargained down from the initial $365,000 penalty.

The agreement, however, doesn’t extend to Walmart’s Canadian stores, says Pelletier. “At Walmart Canada we have a broad range of policies, standards and controls in place to address a range of health and system topics.” He adds that the company now uses a ticketing/controlled entry system for Black Friday crowds. 

A trend emerges

The Walmart story is part of a larger narrative about the evolution of mass merchandise retailing and the proliferation of sprawling distribution centres. With many such facilities dependent on a non-unionized, transient workforce, the conditions inside aren’t well understood, says Cam Mustard, president and senior scientist at the Institute for Work & Health, in Toronto. “When you get behind the walls of a big warehouse in Brampton, I don’t know what goes on in there.”

Some accident reports have leaked out. In 2012, John Whitcombe, an employee of a firm hired to wash trucks at the Brewers Retail distribution centre in Brampton, died after inadvertently drinking windshield washer fluid stored in a vodka bottle at the plant. Inspectors discovered that employees regularly filled old liquor bottles with cleaning fluids, and fined Brewers $175,000.

Amazon is another global e-commerce giant that has seen its share of distribution centre tragedies. Last winter, Ronald Smith, a temp working in one of Amazon’s New Jersey centres, died after being crushed in a conveyer belt. 

These aren’t isolated incidents. In 2010, the U.S. National Institute for Occupational Safety and Health found that workplace injuries in the retail/wholesale sectors were surprisingly high, with over 800,000 injuries and 561 fatalities in 2006. The study noted that while the wholesale and retail trade industry made up 15.5 per cent of private-sector work for the year, it accounted for 20.1 per cent of non-fatal injuries.

Another assessment by UCLA’s Labor Occupational Safety and Health Program and Warehouse Workers United had even more shocking conclusions. Interviews with a hundred current and former warehouse workers in Los Angeles’ Inland Empire – a district with hundreds of distribution centres and tens of thousands of workers – painted a picture of ever-present danger.

“Of the 101 current or former warehouse workers surveyed, 63 told us that they had been injured on the job, 83 had suffered from a job-related illness, and 84 witnessed an injury to a fellow co-worker,” noted the study. “Simply put, Inland Empire warehouse workers often work in dangerous conditions.” 

Canada has its own distribution centre zones, on the fringes of cities like Vancouver, Halifax, Montreal and Greater Toronto. The workforces tend to be transitory, with lots of part-time employees. Mustard says that organizations with high turnover may be less safe because there are fewer employees with a thorough understanding of workplace risks.

The working hurt

Barry Fowlie, Canadian director of Workers United Canada, which represents employees at Winners stores and distribution centres, says in many warehouses, operators rely on temp agencies to provide workers at wages of about $14 an hour. Many are recent immigrants and reluctant to report accidents. “They know they won’t be sent to other jobs,” he says. “They’re working hurt.” (Kathy Yamich says most injuries are musculoskeletal or repetitive strain; for example, carpal tunnel syndrome resulting from hours of stickering packages.)

Fowlie, however, points out some fundamental differences between the Canadian and U.S. distribution centre sectors. In the Inland Empire, most employees are Latinos, including many illegal aliens working under the threat of deportation. “These workers are disposable. Where are they going to go if they get hurt?”

The Canadian system, by contrast, connects worker compensation insurance premiums to year-end rebates given to employers. If an employer exceeds an industry-benchmarked accident rate they don’t get a rebate.

Moreover, provincial officials have been paying more attention recently to health and safety infractions in the retail/wholesale sectors. In Ontario, both have been subjected to safety blitzes. Inspectors targeted almost 1,100 workplaces and issued 3,990 orders, including 134 “stop work” citations involving poorly maintained equipment. As the July 2014 report of the blitz concluded, “The results indicate warehouse hazards continue to be a key concern and that workplace parties need to improve safety and their understanding of their duties and responsibilities.”

Cam Mustard points to important reforms meant to help temporary employees: According to legislation currently in debate in the Ontario legislature, companies that contract with temporary employment agencies would be responsible for the financial consequences should a temporary employee experience a work-related injury or illness. Also in Ontario, independent contractors in the construction industry who were previously excluded from provincial workers’ compensation coverage are now required to participate in the provincial insurance program. This shift, he says, “moves them away from the underground economy.”

This story is the first in a series of articles on workplace safety that will appear on corporateknights.com during October, in partnership with and with funding support from the Canadian Society of Safety Engineering and the Center for Safety and Health Sustainability. Visit our Workplace Safety landing page to follow the series.

(NOTE: The final paragraph of this story was updated on October 17 to clarify the status of legislative changes/efforts in Ontario.)

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