Sources: China National Coal Association, National Energy Administration, CoalSwarm, National Bureau of Statistics, Frankfurt School and United Nations Environment Program, Greenpeace.

The post INFOGRAPHIC: China’s rocky road to a clean energy future appeared first on Corporate Knights.

Failing to wear a helmet will result in a fine of $319 in Australian dollars, as well as a $106 penalty for failing to provide proper identification. Cyclists who are caught going through a red light can also be hit with a $425 charge.

The new regulations, spearheaded by Duncan Gay, minister of roads for NSW, were introduced as common sense solutions to improving road safety overall. Gay, however, has previously described himself as “the biggest bike-lane skeptic in the government” and was behind the controversial removal of a popular bike lane in downtown Sydney last year.

Cycling advocates across NSW gathered over 10,000 signatures for a petition criticizing the laws before they went into force, but the premier’s office refused to back down.

Gay and other government ministers have defended the laws as even-handed, pointing to one provision requiring that all motorists maintain a one-metre distance from a cyclist when travelling under 60 km/hr and 1.5 metres above that speed as proof. Organizations like Safe Cycling Australia counter that the government is using the pretence of safety to pass laws that are really meant to reduce the number of cyclists in NSW.

Cities like London and New York City have managed to reduce the fatality rate per bike trip by focusing on the installation of better bike infrastructure like separated bike lanes.

The post Biking down under appeared first on Corporate Knights.

This has been attributed to a variety of factors, including lower commodity prices and a lack of new market opportunities. The United States, Argentina and Brazil account for over 75 per cent of GMO acreage, and adoption rates for the four major crops – canola, cotton, corn and soybeans – in these markets is already over 90 per cent, leaving little growth potential.

A small increase was registered in Brazil and Argentina, but was more than offset by reductions in the U.S. and Canada. Repeated attempts to break into new markets such as India and China have run into regulatory and consumer opposition, especially in regards to food crops. Genetically modified cotton has been more successful in those markets.

Several developing trends in the United States are likely to challenge GMO crops’ market share in the years ahead, with Vermont’s GMO food labelling law slated to come into force in July and several other states preparing to follow suit.

Domestic demand is also growing for organic food, with the Organic Trade Association reporting a sales jump from $11.13  billion (U.S.) in 2004 to $35.95 billion in 2014. U.S. organic food sales captured about 5 per cent of the market in 2015.

Europe remains the weakest market for biotech crops, representing less than 1 per cent of the global market. Last year, 19 European Union countries voted to ban the cultivation of GMO crops.

The post GMO headwinds appeared first on Corporate Knights.

He fought (and lost) a high-profile battle against an offshore wind project in Scotland that would have impacted a golf course he was building, pushing the case all the way to the Scottish Supreme Court. Along the way he called wind energy a waste of money, ugly, bad for human health and killer of birds, among other things.

https://twitter.com/realdonaldtrump/status/194493341302394880

But a funny thing happened during a televised town hall in Iowa last November. Patricia Scalabrini, whose husband is employed at a local wind turbine factory, asked Trump if he supports subsidies for the industry. After hemming and hawing, he seemed to come out in favour of continued subsidies – even marvelling at the technological innovation involved.

Trump’s contortions on clean energy mirror those facing Republicans across the country these days. The cost of electricity production for wind power has dropped 61 per cent in the past six years, while solar costs fell a whopping 82 per cent.

Bloomberg New Energy Finance calculates that renewable energy investment in the U.S. rose 17 per cent to $44 billion (U.S.) in 2015, accounting for more than two-thirds of all new electric generation capacity added to the grid last year. Much of this demand is being driven by big corporations like General Motors and Google and other non-utility customers who collectively signed 2,074 megawatts of power purchasing agreements in 2015.

The primary reason for shifting Republican views on clean energy has to do with jobs. Many of the estimated 296,000 clean energy jobs are located in Republican-controlled states and congressional districts, changing the calculus for conservative lawmakers who have long railed against wasteful clean energy spending. The ten congressional districts producing the most wind energy, for example, are represented by Republicans in Congress. Lawmakers hailing from wind-producing states like Iowa and Texas were integral to the extension of the production and investment tax credits by Congress in December.

Longtime Iowa Republican Governor Terry Branstad has been an aggressive champion of wind energy in the state, along with senior Senator Chuck Grassley. “We’ve seen the economic success story behind renewables up close and personal,” said Grassley in an April statement. That same month the Republican-dominated state legislature in Nebraska passed a sweeping bill to ease in-state wind development.

There’s also the widespread popularity of clean energy among the U.S. population at large. Republican philanthropist and clean energy advocate Jay Faison commissioned a nationwide poll last September that found 84 per cent of registered voters, including 72 per cent of Republicans, favoured “accelerat[ing] the development and use of clean energy in the United States.” Another poll released last month found 85 per cent support among Texas voters.

In states where Republican opposition has stunted progress on clean energy, unlikely coalitions of tea party activists and environmentalists are forming to take their arguments to the people through referendums and pressure campaigns. Opposition to the expansion of solar power in Georgia and Florida led to the creation of the Green Tea Coalition, conservative activists pushing for energy freedom through decentralized electricity generation. Barry Goldwater, Jr., son of the conservative icon, has led a similar push in Arizona by condemning the power of utility monopolies.

Donald Trump wants to Make America Great Again, in part, through the return of good-paying manufacturing jobs to the country’s heartland.

Patricia Scalabrini knows where to find them.

The post Blowing hot air appeared first on Corporate Knights.

It may come as a surprise to learn that Environment Minister Catherine McKenna has already approved a west coast LNG export project as one of her first executive decisions, notably doing so one week before subjecting another LNG export project to further intense regulatory scrutiny.

Woodfibre LNG, owned by Pacific Oil & Gas and sited at Squamish, British Columbia, is the approved project. It then immediately awarded a major engineering contract, thus setting itself ahead of the pack as competing projects tumbled back to the regulatory blender to face the attendant uncertainty and delay.

So how did this project gain such a competitive advantage?

Here’s the answer by Woodfibre’s VP of corporate affairs, Byng Giraud, laid out for the public at a Vancouver conference in late 2015. It is one of the most strategic commentaries ever from corporate Canada and no doubt influenced the federal approval:

“We needed a breakthrough because the Squamish First Nation was not onside with the proposed environmental assessment process. So we engaged them in their own environmental process. We had to respect the outcome – it took a couple of years of tough slogging and ended with the imposition of 25 conditions. The process was unique in that there was no outward or upstairs reporting. These conditions were written up in our Squamish Nation Environmental Agreement and when that was signed we gained our Squamish Nation Environmental Certificate – meaning that we are bound by these instruments and can’t walk away without repercussions.

“We adopted the philosophy that the First Nations community would be a huge part of our workforce and part of running this facility. We saw contracts as something only used in fights, and consequently strove to develop an understanding above that – one based upon trust. (To the audience in closing) If you didn’t think that this was going to happen, then you probably weren’t paying attention.”

This was one of the most sophisticated strategic moves made by a member of Canada’s business community, and it came just as First Nations broke through the 200-legal-win mark in the resources sector, denoting their ability to determine project outcomes.

It shows that once natives officially endorse a project, federal approvals (if not all regulatory approvals) will typically follow. It’s akin to them granting a project a “Good Housekeeping seal of approval” that can be used to proper effect when matters go before regulatory or judicial review. The numerous attempts to circumvent this process have come up empty, demonstrating why Canada’s First Nations have ascended to the role of “resource rulers.”

So when Prime Minister Trudeau told the Assembly of First Nations (AFN) general assembly that “no relationship is more important to me, and to Canada, than the one with First Nations, the Metis, and Inuit,” he was notionally rolling out the red carpet for any proponent to gain project approval by getting First Nations onside. That paradigm shift has now been validated by Woodfibre’s recent approval.

Flash back three years to the same convention, same place, a much different paradigm: that’s when the AFN leadership abruptly downed tools and proceeded en masse to crash Parliament. The house was in session and managed to barricade the main door; a brief standoff ensued, with the native leadership ultimately retreating to the refrain of “Wait till you try to come to our homeland” echoing in the halls of power.

Notably, that same morning, the National Post ran the headline: “The fate of our resources is in the hands of our most disadvantaged citizens”. Sadly, nothing’s changed three years later; only the stark realization that the rise of native empowerment (on the ground, in the courts, in corporate boardrooms) is without a doubt the unrelenting driver behind this necessary and essential change in political direction.

It was in 2004 that “free, prior and informed consent” first registered on the mining scene; and that’s also when native land rights started to gain real momentum. From the Voisey’s Bay nickel mine in Labrador, to the Mackenzie Valley Pipeline project and the Cliffs chromite discovery (now defunct) in the Ring of Fire, the assertion of native land rights dictated whether these projects proceeded or not – the common denominator being key native legal wins that either derailed regulatory processes, voided ministerial permits, or both.

South of the Trans-Canada Highway, native land rights assertions more often than not resulted in on-the-ground pushback. Oka, Ipperwash, Caledonia and Rexton showed an ever-increasing militancy and an emerging national native alignment. That’s because native empowerment was consistently downplayed as a political force all along the rural-urban fault line right across Canada. A case can even be made that native pushback on the road to Rexton changed the New Brunswick government, resulting in the replacement of the (pro-fracking) minister of environment with the province’s leading eco-activist.

So when Premier Rachel Notley’s inaugural Throne Speech last year opened with “Alberta is a province of Indigenous people here for 1,000 years and we’re learning to respect that” and closed with “a Canadian Energy Strategy is now a pending necessity and reality, as well, a respectful relationship with Indigenous peoples” we can see how the major players are realigning in recognition of First Nations, Metis and Inuit assuming the mantle of resource rulers.

In a year-end interview, the president of the Canadian Association of Petroleum Producers conceded that his organization had been left out of the loop when the Notley government took public stage with key captains of industry, several environmentalists and a regional chief in full headdress to announce its climate change strategy.

The unmistakable message here is that resource proponents no longer need to embrace groupthink. Working with progressives, natives and environmentalists may actually prove to be the only way to go after all.

They now realize that there’s an easier way to do business than by butting heads with massively empowered First Nations. That’s because the latter have redrawn the map of Canada – one native legal win at a time.

The post Resource rulers appeared first on Corporate Knights.

Here are two key moments in the history of Indigenous women’s organizing, one before and one after the destruction of the world as they knew it. Separated by 100 years, both moments attest to the resilience of Indigenous women’s political and cultural efforts to address the impacts of patriarchal colonialism in order to seek justice for their people, culture, and the earth, their mother.

This peace must last forever. Let your women’s sons be ours. Let our sons be yours. Let your women hear our words.

– Nancy Ward, speech to U.S. treaty commissioners (1781)

With these few words, Nancy Ward, Beloved Woman of the Cherokee, closed her speech to U.S. treaty commissioners in an effort to bring peace and instill in her audience of white men a sense of respect for both the kinship relationship such a treaty would represent and her authority to negotiate the treaty. Moreover, this particular statement noted the troubling absence of white women in the political process that would broker peace between the two nations. Ward’s words were not merely a sisterly comment on the political participation of white women, but on the capacity of white men alone to negotiate and institutionalize relationships of mutual respect and coexistence.

The U.S. treaty commissioner’s response proved such a point, “Our women shall hear your words, and we know how they will feel and think of them.” He added, after all, “We are all descendants of the same woman,” a telling biblical reference to a patriarchal world vastly different than one shared by the matrilineal society of the Cherokee nation.

For decades following this initial interaction, Cherokee women resisted the persistent threats of removal after the Treaty of 1781 as well as the loss of political authority over lands that the Cherokee governance structure extended to women. In letters to the U.S. government and their own national council, these women would petition for their rightful authority over decisions about their land and territory, a movement captured by many Cherokee writers and historians.

For decades to follow, the Cherokee women’s council would convince the male leadership of the women’s ongoing authority in such matters and encourage the men to fight removal for the sake of the nation’s future. Of course, this concerted effort would be thwarted by President Andrew Jackson’s rejection of Cherokee sovereignty and the forced removal known as the Trail of Tears.

Yet, the resistance and organized efforts of the Cherokee women are reflected in ongoing struggles of contemporary Indigenous women land defenders and feminists. This story reminds us that in our own history of Indigenous women’s political resistance are the strategies for asserting our power today as well as what constitutes the foundations of that power: the land – and our relationship to it – as well as those forms of governance that respected such a relationship.

It is only one story among many.

For spite I feel like putting my hand forward and simply wiping the Indian men‘s committee into nowhere!! No – I should not really do such a thing. Only I do not understand why your organization does not include Indian women. Am I not an Indian woman as capable to think in serious matters and as thoroughly interested in the race as any one or two of you men put together?

– Zitkala-Ša, letter to Carlos Montezuma (1901)

In the early decades of the 20th century, Zitkala-Ša embarked on a career of Indigenous organizing, activism, writing and leadership that few have ever accomplished. Famous from an early age as a writer, poet and storyteller, Zitkala-Ša would leave behind her literary efforts to commit to full-time activism in the last decades of her life. Yet as evidenced in the youthful admonition of her one-time lover and fellow organizer Carlos Montezuma, Zitkala-Ša could not abide organizing by “progressive” Indigenous men at the expense of women’s voices.

Indeed, once disillusioned with such organizations, she turned to the General Federation of Women’s Clubs, convincing the organization to begin an Indian Welfare Committee to which she had herself appointed. Working as the face of the committee, she would set out on a journey – one of many – to research and write about the injustices facing Indigenous people.

One of these trips was to the Oklahoma oil fields in the 1920s. Sent there to study the conditions of Indigenous life caught in the storm of rapid extractive development, fast money and white greed, her research is the surviving record of not only injustice, but of a remarkable Indigenous woman who laboured over the work of reviewing 14,000 probate cases, conducting interviews of American Indian women who suffered violence and analyzing various court proceedings. This research resulted in the 1924 pamphlet, dramatically titled, Oklahoma’s Poor Rich Indians: An Orgy of Graft and Exploitation of the Five Civilized Tribes, Legalized Robbery, in which her narratives of violence against women reveal her anger and resolve.

Zitkala-Ša’s storied example of ethical kinship and responsibility to the land, women, children and men in her research and writing is one that must be heard by contemporary Indigenous men and women acting in their own contexts to write the next chapters of Indigenous feminism.

Indeed, Indigenous feminist activists fighting for ecological, economic and gender justice in places such as Alberta’s oil sands, Attawapiskat in northern Ontario, North Dakota already do this work.

They remind us that Indigenous feminist history is defined not by academics such as me, but by the women whose work is accountable to their communities and, most importantly, the land of their mothers.

The post Dreams and thunder appeared first on Corporate Knights.

Fifty-two oil companies have already filed for bankruptcy this year, and over one-third of the world’s biggest oil and gas companies could end up bankrupt in 2016 under stress from crushing debt loads (over US$150 billion) and lacklustre cash flows depressed by low oil prices, according to a recent study by Deloitte.

While growth in fossil fuels stagnates, growth in clean energy is taking off. Since 2000, the International Energy Agency has had to revise its long-term solar forecast upwards 14 times and its wind forecast five times. Wind’s market share of power generation has doubled four times in the past 15 years, and solar has doubled seven times. It is getting a lot cheaper to make power from wind and solar thanks to technological breakthroughs, better financing arrangements and economies of scale. The world is currently adding twice as much clean power capacity than coal, oil and gas combined, according to Bloomberg New Energy Finance (BNEF).

The bigger worry for oil businesses is the unexpected speed and scale of the rise of the electric car. The main reason is cheaper batteries, which make up one-third of the cost of electric cars. Battery prices fell 35 per cent last year and electric vehicle sales rose by 60 per cent. By 2022, BNEF estimates electric vehicles will cost the same as their internal combustion counterparts, and if growth continues at the current 60 per cent year-over-year pace, oil displacement by electric vehicles will reach two million barrels per day by 2023. Two million barrels per day is the size of the current oil glut, which was enough to drive global oil prices into the gutter. Factoring in autonomous cars and ride-sharing services, electric vehicles could reach 50 per cent of new vehicles sales by 2040, according to BNEF, 50 times higher than what OPEC is projecting.

None of this portends an imminent end to our fossil fuel age, but it does spell an end to fossil fuels as a juicy growth market. This sentiment has been ratified, sanctified and tallied by the political, moral and financial bellwethers of our time from Paris (195 countries committing to phase out fossil fuels this century) to the Vatican (the Pope’s moral invocations to drastically reduce use of fossil fuels), to the Bank of England (governor Mark Carney’s prudent warnings not to get stuck holding a bag of stranded fossil fuel assets).

The upshot for oil businesses that care about growth: focus growth strategies on renewables (and possibly gas).

Some big oil companies are betting big that the stroll away from coal will parlay into a dash for gas. That played into Exxon’s $41 billion acquisition of XTO Energy in 2009, which vaulted it to the top of the natural gas producers table in the U.S., and it also explains Shell’s recently closed $52 billion acquisition of BG Group. Whether natural gas is a bridge to a low-carbon future or a bridge to nowhere on climate progress hinges on containing the downstream methane leaks.

Other oil companies including European majors Eni, Statoil and, most prominently, Total are diversifying into renewables, albeit less emphatically. “Electricity will be the energy of the 21st century,” according to Total CEO Patrick Pouyanné, who has placed renewables at the top of Total’s growth goals.

If you follow the money, however, the company making the biggest move to diversify into renewables is not based in Europe, but in Calgary. Enbridge, just one-third the size of Total by market cap, has a renewable investment program twice as large. Over the past decade, while under heavy fire from environmentalists opposed to its pipeline expansion plans, Enbridge invested nearly $5 billion in renewable energy and now plans to ramp that up to $10 billion by 2019.

In just the past half year, Enbridge has invested $1.3 billion in wind projects in England, France and West Virginia. On his last quarterly call with analysts, Enbridge CEO Al Monaco talked more about offshore wind farm opportunities than oil pipelines by a score of 796 words to 528. The stalled (perhaps indefinitely) Northern Gateway pipeline didn’t merit a mention or even a question from the analysts.

Investors are taking note. “We encourage our portfolio companies to increase their exposure to clean energy growth markets relative to legacy fossil fuels, and applaud Enbridge’s investments in this respect,” said Jeanett Bergan, head of responsible investments at Norwegian insurance giant KLP, which holds $100 million of Enbridge stock.

To be clear, Enbridge is not abandoning its traditional bedrock: over 70 per cent of the company’s profits still come from transporting oil through its vast network of pipelines, though Monaco recently indicated this could shrink to 50 per cent as early as 2020 as its other business lines grow.

Why is Enbridge making the biggest bet on green energy among its oil business peers?

After a decade of pitched battle with environmentalists and local communities over the proposed Northern Gateway pipeline, Enbridge has a visceral understanding of how hard it is to build a major new oil pipeline in the 21^st century. The other reason is Enbridge’s utility-like shareholder value proposition, which is premised on building and operating major capital projects that crank out stable cash flows with minimal commodity price risk based on fixed-term contracts with creditworthy customers.

Taking a dispassionate view of the fundamentals, it’s a lot easier to build a wind farm today than a new oil pipeline. You’re able to earn similar returns with customers that are more creditworthy. So Enbridge is taking the plunge, gearing up to be a player in the $200 billion European offshore wind market build-out over the next 14 years.

This December, on the sidelines of the Paris climate summit just hours before countries reached historic agreement to shift from fossil fuels to clean energy, Toby Heaps caught up by phone with Enbridge CEO Al Monaco.

CK: What was the genesis of the strategy for Enbridge to meaningfully diversify into renewables?

MONACO: When we started with our first wind farm a number of years ago, it was more of a side business. We were investing small amounts into new energy technologies as a way to promote their growth. But it quickly developed into something a little bit different because we had some good success and the world changed.

CK: How did the world change?

MONACO: We all now agree that we are going to change to a low-carbon economy. The economics of renewables also changed a lot. It’s not really unusual and we should have expected it, but we have had a huge decline in the levelized cost of renewable energy in the last five years. In fact, if you look at the costs on a per-megawatt basis it has come down over 60 per cent for wind and 80 per cent for solar. The biggest reason for this is scale. We started our first wind farm with 0.6 megawatts offshore – now we are talking about 6 megawatts. The yields on our offshore wind energy are much improved these days because of better technology and our understanding of wake effects [changes in wind speed caused by the impact of the turbines on each other]. The supply chain has grown stronger and there are a lot more wind developers, which have driven costs down. Renewable energy generation targets set by regulators have also helped.

CK: As the economy shifts from liquid fuels to clean power, how bullish are you on power transmission lines?

MONACO: There are literally hundreds of billions of dollars required just to replace existing transmission infrastructure, never mind growing it, so a huge opportunity set there for us. In the scope of our strategy if you look at gas, renewables and transmission, they all fit together. Gas fits with renewables quite well to allow for management of load, and transmission is going to be a big part of renewables, given where the best resources are at and where they need to get to.

CK: You have set aside billions of dollars to ramp up your renewables portfolio over the next few years. How do you decide where to invest?

MONACO: Before we execute a project, it has to go through the tumbler and meet the investment criteria. We want to know if it will provide a good return, if it has a good underpinning commercially, for example a power purchase agreement. Can we manage the capital cost risk, does it have good transmission capacity and is the resource in the area strong? Are we able to gain public support? Those are the things we look at before making the investment decision.

CK: How have your investors responded to this pivot toward renewables?

MONACO: They get it. They look at it from a fundamentals point of view like we do. They ask us whether or not the projects achieve the same kind of returns as with the rest of the business.

CK: Do you see a day in your lifetime where new energy becomes the core part of Enbridge’s business?

MONACO: It’s hard for me honestly to envision how renewables become the major driver of our business within the next decade or two.

CK: I would hope you are going to be around more than two decades.

MONACO: Ha ha. Well, maybe by then. It all depends on the fundamentals.

The post Mind the gap appeared first on Corporate Knights.

After rising rapidly through the ranks of France’s civil service, Daveu moved to the political side as technical adviser to the cabinet of Prime Minister Jean-Pierre Raffarin and then as chief of staff to Serge Lepeltier, minister of ecology and sustainable development. In 2005 she moved over to the private sector, becoming head of sustainable development at French pharma giant Sanofi-Aventis. In 2007 she returned as chief of staff to Nathalie Kosciusko-Morizet through various cabinet posts including minister of ecology, sustainable development, transport and housing.During this period she was one of the key architects behind France’s two sweeping environmental laws known as Grenelle and Grenelle II, solidifying the strong commitment to sustainability held at the time by President Nicolas Sarkozy’s centre-right UMP party. The legislation touched on everything from transportation to renewable energy targets, including the introduction of a mandatory corporate social responsibility (CSR) reporting regime targeted at the private sector.

After the UMP was swept from power in 2012, Daveu joined French luxury goods holding company Kering as chief sustainability officer. Since then she has helped refine Kering’s pioneering environmental profit and loss (EP&L) report, an attempt to fully measure the company’s environmental footprint, and has begun overhauling its supply chain.

Corporate Knights recently caught up with her to discuss the scope of the Grenelle laws, the importance of CSR reporting and what Kering has learned through its EP&L report.

CK: Can you describe to me the goals and the process around the Grenelle acts?

Daveu: What is very interesting for me when you are thinking about the “Grenelle de l’environnement” process was the primacy of both format and content. It was, for the first time, a multi-party debate that brought together different representatives from labour, industry, environmental NGOs and local government. Everyone was on an equal footing.

The objective was to determine – and you can imagine that at the beginning there were different ways of thinking about the issues and diagnosing the problems – how to tackle sustainability in a holistic manner, to design the blueprint for ecological policy and sustainable development over the following five years. What was very interesting was that there were no topics that were off limits, nothing was blocked as taboo.

CK: What was ultimately included in the two bills?

Daveu: It was imperative for us to establish a common objective that the nation could get behind, so the bills touched upon six major areas: building and housing, transportation, energy, health, agriculture and biodiversity.

A number of innovative ideas were adopted, including the creation of a “green grid” linking natural areas together throughout the country to encourage the maintenance and spread of biodiversity. On the housing side, along with efforts to fight urban sprawl we began requiring landlords to disclose the energy performance of their buildings ahead of time [so] renters knew what they were getting into.

CK: Let’s get into Section 225 in particular, the section of the law that made CSR mandatory.

Daveu: For a company to make improvements on sustainability, it needs to first quantify where it stands. This is the same approach taken for financial metrics. If you don’t know exactly where you are, you won’t be able to put in place and to define an action plan to fill in the gap. This applies to all listed companies, as well as unlisted companies with more than 500 employees and €100 million in revenue. We wanted to help catalyze a movement within each company to make incremental environmental improvements over time, not simply create another unsexy reporting requirement.

Section 225 was an attempt to lay out a path for the future. We firmly believed that it was the responsibility of the public sector to facilitate change within the private sector. It’s a very French approach, one that might not work as well in other jurisdictions around the world. But I think that five years on we’ve been vindicated, with the European Commission moving to replicate many of these steps and to build upon them as well.

CK: How does this relate to Kering’s EP&L?

Daveu: It takes reporting a step further than the Section 225 requires. We are not only measuring our own operations, but are beginning to take into account all of our supply chain from Tier 1 (direct suppliers) all the way up to Tier 4 (raw material production). We believe that if we truly want to reduce any negative impacts we bring about as a worldwide company that we need to first place a monetary value on it. For example, using one metre of water in Western Europe doesn’t have the same local and regional impact than if you’re using the same amount in sub-Saharan Africa. We try to quantify this impact as a dollar amount so it can be properly measured and then addressed.

So this is why Kering created this tool, to be able to measure everything from land use to waste across our entire supply chain. The original idea came from François-Henri Pinault, Kering’s CEO, and beginning in 2011 a few pilot projects were launched with [subsidiary] Puma. Since then we’ve been working with both PwC and [independent] environmental and economic experts to improve the methodology to the point that last year we were able to publish an EP&L report, I believe the only company thus far to have done so.

Our CEO also decided to make the formula open-source. The thinking was that if we want to bring about a paradigm shift and reset business on a more sustainable path that we have to share the best practices. Kering is big, but it’s not big enough to change the world all by itself.

CK: What were some of the most surprising discoveries made through the EP&L?

Daveu: We had a sense that it was big, but the outsized impact our supply chain had was stunning. For example, only 7 per cent of Kering’s environmental impact was connected to our own operations – the rest is supply chain. In terms of overall greenhouse gas emissions, over 50 per cent is linked to cattle and cotton farming.

This has brought about a real culture change within the company, where all of a sudden Kering is working much more closely with industries such as the livestock sector to reduce carbon emissions. This is a very different skillset from preparing a fashion show; it’s far outside our traditional comfort zone.

CK: Is it better to simply set stringent standards for suppliers to meet or to work with them directly?

Daveu: When you’re working on the luxury side, most of them have been suppliers for many years. You have a long-standing relationship with them. So we try really hard to work with them and to share best practices, as well as to support them and implement new practices. This remains an ongoing process, because often the suppliers need to invest and we need to find the right action plan that makes this feasible. This also means working with NGOs that are experts in this field.

For example, we use pythons in our supply chain for Gucci and other brands. Two years ago, we did a study to see where the most sustainable place to source pythons would be. Do best practices involve python farming or is it less impactful to source those that come from the wild? We decided to work with the International Union for Conservation of Nature to design social, environmental and animal welfare criteria. Sometimes we need to determine exactly what sustainability means in a certain aspect of our supply chain before establishing new guidelines for suppliers.

We’ve also created the Materials Innovation Lab, a hub based in Italy to work with suppliers to see how they can improve their practices linked with cotton and leather and other goods. So we’ve put into place different tools and practices to be very operational with our supply chain and our suppliers.

The post The French connection appeared first on Corporate Knights.

For better or worse, Canada’s business community is both risk-averse and generally skeptical of new regulatory actions. The safest bet for the average company is to stay silent on controversial policies like carbon pricing, even if there’s internal support for it. But the private sector is also home to smart and innovative leadership that is demonstrating remarkable foresight on issues related to sustainability. To push Canada towards a low-carbon future, private sector leadership will be needed to spur governments into action, and vice versa.

We’ve begun to see a new dynamic play out over the past year across Canada. In Metro Vancouver, major business groups worked hard in support of the failed Yes side for the transit plebiscite.

Over 160 B.C. businesses signed an open letter calling on the provincial government to strengthen the province’s carbon tax, while major oil sands producers joined Alberta Premier Rachel Notley on stage for her climate policy announcement last November. The Mining Association of Canada recently endorsed the federal government’s efforts to establish a national carbon price.

The Council for Clean Capitalism takes this a step further by placing CEOs at the head of a group advocating for the integration of clean capitalism principles into broader economic and social policy.

Companies are grappling with how to shift their business models internally towards an economic model in which what is good for business is also good for the environment and society. Economist and author Jeremy Rifkin counselled companies at an event in Toronto earlier this year “to be in two business models simultaneously for the next three decades.” Many companies, including energy powerhouses Suncor and Enbridge, are working hard to bridge this gap to a cleaner future.

Another example of business pursuing this dual focus is the B.C.-based financial co-operative Vancity, the top-ranked company in the 2016 Best 50 Corporate Citizens in Canada ranking. The company has worked hard to remake itself as a different kind of financial institution, one that places values-based or ethical banking at the heart of its business model (see here for a full profile).

Following Vancity on the list is WestJet, a leader in the airline industry on resource productivity and taxes paid. Third place went to the Co-operators group, the insurance provider and perennial contender that finished first in 2011. It performed particularly well on its pension and tax scores, and maintained one of the lowest CEO to average worker pay ratios among the Best 50.

A deeper dive into the indicators turned up a mixed bag when it came to benchmarking any improvements in disclosure practices. All but two companies on the 2016 Best 50 released their energy and carbon productivity, with slight disclosure increases occurring around water and waste productivity as well. The CEO to average worker pay ratio fell to 73:1 from 88:1 in 2015, whereas the amount of tax paid increased three points to 14 per cent.

One troubling finding was a significant decline in innovation capacity from 0.97 per cent in 2015 to 0.55 per cent in 2016. R&D expenditure is measured as a percentage of revenue, trailing over the past three years. Diversity levels, meanwhile, stayed stagnant. Slightly better board diversity scores were offset by lower levels of diversity among senior management.

As Rifkin said, this shift to a cleaner form of capitalism will remain a work in progress for decades to come. The companies on this year’s Best 50 are setting themselves up to flourish in this changing environment.

Click here to go back to the ranking landing page.

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That rare attribute helps explain why Corporate Knights has named Vancity Canada 2016’s Best Corporate Citizen. The credit union was also awarded the top spot in 2013.

Vancity scored above 75 per cent in all 12 categories used to compile the rankings, except for water use, employee turnover, taxes and pension benefits. (Full disclosure: Vancity is a minority investor in Corporate Knights. It played no role in compiling the rankings.)

Vancity – its full name is Vancouver City Savings Credit Union – is a rare beast in the corporate world. Size and growth (though not profits) take a backseat to what it calls “values-based” or ethical banking. Its goal is, in its words, “to integrate social, environmental and economic factors into all aspects of our business, and collaborate with others to build healthy communities.”

Owned by its 515,000 members, Vancity is dwarfed by the big Canadian shareholder-owned banks. Its assets of $19.8 billion amount to less than 2 per cent of the balance sheet of Royal Bank of Canada, the country’s largest financial institution. It has fewer than 2,600 employees, and just 59 branches in Vancouver, provincial capital Victoria and British Columbia’s Fraser Valley.

“A lot of smaller local banks see Vancity very much as a role model,” says Peter Blom, chief executive of Netherlands-based Triodos Bank and chair of the Global Alliance for Banking on Values, of which Vancity is a member.

The alliance’s 28 members, mostly cooperative and community banks and credit unions, promote sustainable banking as a way of improving their communities and society at large. Vrooman, who was B.C.’s deputy finance minister from 2004 to 2007, chairs the alliance’s North American chapter.

“What’s so interesting about Vancity,” Blom says, “is that they are in a transition from a local credit union that did a lot of good work to a modern credit union that incorporates the environment and broader social issues into their banking space. That’s quite unique.”

Vrooman’s efforts to immerse senior staff in social responsibility and environmentally sound banking “is a real source of inspiration to the CEOs of other, smaller organizations,” Blom says.

He cites a small bank in Melbourne, Australia, that is modelling itself on the Canadian credit union. Vancity also helps train young “social bankers” from other countries.

Even as many of the world’s biggest banks find themselves in the political crosshairs, Vrooman sees the financial services industry as a powerful force for good in society. “The allocation of capital – what kind of firm, what kind of person does and doesn’t get access to credit – is probably the single most positive force in creating the future society that we want,” she says.

“It’s pretty difficult to create the kind of society that most people say they want if we’re not connecting capital to the things that matter to them – the sustainability of the planet, how welcoming and inclusive a community is, the business and corporate environment, the role of education and health and democracy, the inclusion and reconciliation for indigenous people…all those things.”

The credit union’s drive to burnish its do-good credentials takes many forms. For example, the influx of refugees to Canada has been a golden opportunity to pursue both social responsibility and the bottom line.

Vancity offers to open bank accounts for government-assisted refugees within two weeks of them stepping off the plane. Last fall, in anticipation of the arrival of thousands of Syrians, it expanded the number of branches that process refugee accounts from one to five.

Its members can also obtain interest-free, seven-year loans of up to $50,000 to provide accommodation for a refugee.

On other fronts, Vancity claims to be the biggest organization in Canada to stick to a “living wage” policy for its employees; in other words, pay that significantly exceeds the legal minimum wage and is sufficient to meet basic living needs.

Management compensation hinges partly on meeting social responsibility goals. “Finance has no greater weighting than those criteria,” Vrooman says. “In fact, it’s only one of five.”

Vrooman earned a base salary of $441,000 last year. Performance-related bonuses added another $522,000, making a total of $963,000.

Vancity has attracted 30,000 new members a year over the past three to four years. As Vrooman sees it, more and more people are saying “hey, I care what happens to my money and what my money is used for, and I understand what role my community cooperative financial institution can play in that.”

As a result, she says, “we think we can do even more. A lot of the digital technology around social media and social networking works well with a values-based financial institution that’s open and transparent and inclusive. We think technology can extend our business model.”

She declines to disclose projects currently in the pipeline, but points to Vancity’s alternative to payday loans as an example of where the credit union is heading.

Customers with low credit scores or no credit history can obtain a Vancity “fair and fast loan” of between $100 and $2,500 within an hour at an annual interest rate of 19 per cent, compared to the typical 60 per cent favoured by the industry. Vancity arranged almost 1,000 of these loans last year.

“Being able to offer an ethical, transparent alternative to payday lending that at the same time provides capacity building and financial literacy online is definitely a place where we want to go,” Vrooman says. “We think we can reach more people if we do it that way.”

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