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

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

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

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

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

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

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

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

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

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

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

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

Click here to go back to the ranking landing page.

The post The future looks bright appeared first on Corporate Knights.

—

Click here to go back to the ranking landing page.

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

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

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

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

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

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

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

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

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

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

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

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

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

Click here to go back to the ranking landing page.

The post Flight plan appeared first on Corporate Knights.

The methodology for the 2014 Future 40 Responsible Corporate Leaders in Canada ranking is based on 12 key performance indicators (KPIs) covering resource, employee and financial management. All information is derived from publicly-disclosed data. All eligible entities are contacted for data verification prior to project completion.

1. Energy productivity: Revenue per gigajoule of energy consumption.

2. Carbon productivity: Revenue per metric tonne of direct/indirect GHG emissions.

3. Water productivity: Revenue per cubic metre of water withdrawal.

4. Waste productivity: Revenue per metric tonne of non-recycled waste produced.

5. Percentage tax paid: Taxes paid in cash, as a percentage of EBITDA, trailing over the past 5 years.

6. Leadership diversity: Percentage of women on board of directors and in executive management.

7. Clean capitalism pay link: At least one senior executive’s compensation tied to clean capitalism-themed performance targets.

8. CEO-to-average worker pay link: How much more CEO gets paid (expressed as a multiple) compared to average worker.

9. Safety performance: Lost time injury rate and number of fatalities/number of employees.

10. Innovation capacity: R&D expenditure as a percentage of revenue, trailing over the past three years.

11. Employee turnover: Number of departures/average employee compensation.

12. Pension fund status: Unfunded liabilities at year end 2012 by market capitalization are divided by market capitalization at year end 2012, or expenses towards defined contribution plans.

Corporate Knights Notice and Disclaimer

This document and all of the information contained in it, including without limitation all text, data, graphs, charts (collectively, the “Information”) is the property of Corporate Knights Inc. known herein as “Corporate Knights” and is provided for informational purposes only. The Information may not be modified, reverse-engineered, reproduced or redisseminated in whole or in part without prior written permission from Corporate Knights.

The Information may not be used to create indexes, databases, risk models, analytics, software, or in connection with the issuing, offering, sponsoring, managing or marketing of any securities, portfolios, financial products or other investment vehicles utilizing or based on, linked to, tracking or otherwise derived from the Information or any other Corporate Knights data, information, products or services.

The user of the Information assumes the entire risk of any use it may make or permit to be made of the Information. CORPORATE KNIGHTS DOES NOT MAKE ANY EXPRESS OR IMPLIED WARRANTIES OR REPRESENTATIONS WITH RESPECT TO THE INFORMATION (OR THE RESULTS TO BE OBTAINED BY THE USE THEREOF).

Information containing any historical information, data or analysis should not be taken as an indication or guarantee of any future performance, analysis, forecast or prediction. Past performance does not guarantee future results.
None of the Information constitutes an offer to sell (or a solicitation of an offer to buy), any security, financial product or other investment vehicle or any trading strategy.

The Information may contain back tested data. Back-tested performance is not actual performance, but is hypothetical. There are frequently material differences between back tested performance results and actual results subsequently achieved by any investment strategy.

Constituents of Corporate Knights equity indexes or stock lists are listed companies, which are included in or excluded from the indexes or lists according to the application of the relevant methodologies. Accordingly, constituents in Corporate Knights equity indexes or lists may include Corporate Knights, clients of Corporate Knights or suppliers to Corporate Knights. Inclusion of a security within a Corporate Knights index or list is not a recommendation by Corporate Knights to buy, sell, or hold such security, nor is it considered to be investment advice.

Corporate Knights receives compensation in connection with licensing its indexes to third parties. Corporate Knights Inc.’s revenue includes fees based on assets in Index Linked Investments.
Any use of or access to products, services or information of Corporate Knights requires a license from Corporate Knights. Corporate Knights brands and product names are the trademarks, service marks, or registered trademarks of Corporate Knights and its subsidiaries in Canada, United States and other jurisdictions.

Click here to go back to the ranking landing page.

The post Future 40 methodology appeared first on Corporate Knights.