Vancouver’s community-minded credit union Vancity leapt into action, reducing credit card interest rates to zero, buying back foreign currencies from customers who’d had travel plans cancelled, at the same rates as they had been sold, offering small businesses emergency zero-interest working capital, and waiving ATM and Interac e-transfer fees. In addition to a $1 million Community Response Fund to support Vancouver groups fighting the pandemic, it also set up a Unity Term Deposit, which raised an impressive $200 million in just one month – money that’s being used to fund programs that will directly support those affected by COVID-19.

A number of Canadian businesses scrambled, innovated and retooled to solve medical supply shortages and pandemic-related breakdowns in global supply chains. Ontario Power Generation dug through its inventory and found more than one million surgical masks, 75,000 N95 masks and 17,500 protective suits that it shipped to Ontario’s Ministry of Health in March. The company also donated $900,000 to emergency food support.
Transportation equipment giant Bombardier used its manufacturing muscle to combat the shortage of medical supplies by retooling its Thunder Bay, Ontario, railcar plant to produce crucial parts for 18,000 ventilators for delivery to the Ontario government. Similarly, Bombardier’s engineering site in Saint-Bruno, Quebec, pivoted to produce 40,000 visors for healthcare workers who are most at risk in the pandemic.

Sustainable packaging producer Cascades started manufacturing a million pre-cut recycled plastic medical visors for Bauer, a sports-equipment manufacturer turned PPE producer.

Not coincidentally, all these companies are on our 2020 list of Canada’s Best 50 Corporate Citizens. These homegrown heroes are not only leading the charge against the coronavirus, they are strategically adopting more sustainable business practices that demonstrate their commitment to a healthier world.

The journey to more sustainable lifestyles is a long one, and progress is measured in years. But calamities such as COVID tend to strip away the rhetoric to expose individuals and organizations for who they truly are. In these tough times, Corporate Knights is pleased to see that the companies we consider role models in the shift to sustainable civil society have also proved to be generous leaders in a time of crisis.

It’s all connected. Companies that embrace environmental measures, diversity and responsible risk management aren’t just better prepared for the climate crisis and public emergencies; they are actively strengthening themselves in a fast-moving economy that increasingly rewards speed, resilience, empathy and innovation. Good citizenship isn’t a constraint – it’s an opportunity.

The 2020 Best 50 ranking includes well-known consumer staples, such as our No. 1 company this year, Mountain Equipment Co-op (MEC), as well as High Liner Foods and Canadian Tire, and industrial giants such as Cascades, Agnico Eagle Mines and RioCan Real Estate Investment Trust. As in previous years, the list is peppered with financial institutions (10) and utilities (13), which is great news for the future: utilities are key partners in reducing greenhouse gases and embracing new technologies, while we need clear-sighted banks, credit unions and pension-fund managers to fund the cleantech revolution.

We’re also pleased to see a wide spectrum of industries represented, including cleantech (Canadian Solar, Secure Energy Services), natural foods (SunOpta), media (Transcontinental), telecom (Telus, Cogeco), airlines (Transat A.T.) and mining (Teck, Agnico Eagle). It’s a reminder that any company, in any industry, can choose to do the right things.

Corporate Knights ranks the Best 50 Corporate Citizens on 21 key performance indicators. We scrutinize their percentage of clean revenue, board and executive gender diversity, GHG and waste productivity, employee turnover, innovation efforts, and even the amount of taxes they pay, along with a dozen other factors.

By recognizing genuine advancements on the road to cleaner capitalism, the Best 50 reinforces good behaviours, sets higher standards and seeds hope. To those who think that all corporations are venal, that climate change can’t be stopped, these 50 leaders demonstrate that, as Telus (No. 20) likes to say, “The future is friendly.”

When COVID struck, Vancouver-based Telus lived up to its branding as “Canada’s Most Giving Company.” In addition to waiving some service charges and offering its clients more flexible payment options during lockdown, Telus has invested some $150 million to support COVID relief. Among its initiatives, it’s offering free phone service to frontline healthcare workers; donating more than 10,000 devices, tablets and prepaid SIM cards to help isolated seniors, hospitalized patients and vulnerable Canadians stay connected; and supporting communities with $10 million in medical technology and equipment.

While mining giant Teck Resources took some heat for keeping its B.C. mines open during the COVID emergency, it used its supplier network to procure a million N95 masks to donate to B.C. healthcare workers. And that’s just a part of the $20 million COVID-19 Response Fund Teck launched to aid medical research; support local healthcare and social services in Canada, Alaska and Chile; and fund international relief efforts.

Customer relief has also been on companies’ minds. In April, when many businesses were struggling to pay the monthly rent, retail property trust RioCan offered independent commercial tenants a 60-day, interest-free rent deferral, repayable within a year. RioCan said it’s committed to its clients and to “finding solutions on a case-by-case basis to support their businesses.”

In Alberta, EPCOR Utilities, an Edmonton-based provider of municipal water systems, offered to defer customers’ bill payments for 90 days. It also donated $300,000 to the United Way and the Edmonton Community Foundation, a contribution that was then matched by the Alberta government.

Best 50 company donations poured into Canada’s food banks and charities across the country, with companies such as Canadian Pacific, Canadian Tire, Sun Life, Brookfield Asset Management and others donating millions to emergency COVID relief.

The financial institutions that comprise so much of the Best 50 list have also stepped up. In addition to the Vancity efforts already cited, Bank of Montreal, Desjardins, RBC and HSBC Bank Canada and others raced to offer financial relief for hard-hit personal and business clients, including many deferrals on payments of loans, credit cards and lines of credit.

As well, the banks undertook new COVID-related philanthropic activities. For instance, BMO donated $1 million to the United Way to support newly exposed gaps in community services. RBC committed $2 million to support local response efforts, including food banks, as well as the World Health Organization’s COVID-19 Solidarity Response Fund. TD Bank committed $25 million to the TD Community Resilience Initiative, a “strategic philanthropy” initiative to support communities and organizations across North America responding to COVID-19 and supporting community recovery.

Sudden crises can reveal deep fractures in society. But they can also inspire innovative, big-hearted behaviours that recognize our mutual dependence and shared humanity.

The post Top 50 Corporate Citizens: Thought leaders, role models, change makers appeared first on Corporate Knights.

The stock market’s reaction to the COVID-19 pandemic was swift and harsh, crashing more than 33% in about a month. The market has bounced back somewhat from those mid-March lows, sparking optimistic talk of a “V-shaped recovery,” where the economy quickly returns to normal, though RBC CEO Dave McKay suggests a longer downturn, with a “U-shaped recovery,” is more likely.

Bank CEOs warn that we should prepare for a recovery period that spills into next year, so let’s examine a handful of eco-friendly companies that will continue to profit during a longer period of pandemic-induced economic pain.

Note: These are investment ideas, not recommendations. Speak to a financial professional before investing and ensure that any holdings are part of a more diversified investment strategy.

Cascades

I would have never picked toilet paper to be the hot commodity as society faces a global pandemic, but here we are. Cascades is a Quebec-based company that makes tissue paper and packaging from recycled materials. The company is the most sustainable toilet paper manufacturer in Canada and is well positioned to take advantage of the growing demand for eco-friendly home-delivery and takeout packaging.

Long considered a leader in developing a closed-loop or circular economy, Cascades uses recycled fibres for 84% of its paper products. The remaining materials are sourced using a strict procurement policy that prioritizes fibre suppliers certified by the Forest Stewardship Council (FSC). In 2015, Cascades set ambitious sustainability targets for 2020, and I’m excited to see how much further they’ll push the targets with their next five-year plan. Cascades was #49 on the 2020 Corporate Knights Most Sustainable Companies in the World list.

Cascades’ share price didn’t dip much in the initial crash, and is up 16 % over the past two months. The stock is expected to pay a 2.54% annual dividend.

Microsoft

The pandemic is forcing everybody to work from home, and Microsoft — the world’s largest company — is perfectly placed to profit from this massive transition in our economy’s workforce. Consumer device sales will likely drop as unemployment rises and people are less likely to upgrade their phones and computers, but only about 36% of Microsoft’s revenue comes from personal computers and gaming. Its other segments include productivity and business processes and Intelligent Cloud. My instinct is that demand for these business-to-business segments will be resilient to the current economic current and will likely benefit as old-school businesses evolve to become completely or much more remote.

Microsoft is highly rated by environmental, social and governance (ESG) rating agencies including Corporate Knights, MSCI and Sustainalytics, and the company has pledged to become carbon negative by 2030. However, Microsoft did come under pressure last year when employees threatened to walk out after it signed a big contract with the U.S. military.

It’s hard to argue that Microsoft is leading us directly into a green economy, but it’s fair to classify it as “doing less harm” and ahead of the curve on corporate responsibility measurements.

Microsoft’s share price initially fell by 27%, but rebounded nicely such that it is only down 5% over the past two months. The stock is expected to pay a 1.19% annual dividend.

Brookfield Renewable Partners

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Brookfield Renewable Partners, the renewable energy division of Brookfield Asset Management that generates electricity through hydro, wind and solar projects, is well positioned to resist the current economic storm. (Full disclosure: The author owns shares of Brookfield Renewable Partners).

I consider Brookfield Renewable Partners pandemic-proof because the company’s revenue comes from multi-decade purchase price agreements (PPAs) to sell electricity at a pre-set price. Electricity demand is falling as factories are locked down, yes, but that doesn’t affect the price that Brookfield Renewable gets paid for generating electricity. The weighted average remaining duration of these contracts is about 17 years, so investors can reasonably expect the company to maintain consistent cashflows. Brookfield Renewable Partners seems to be on solid financial footing, having just raised $350 million in green bonds.

I’ve criticized Brookfield Renewable Partners in the past for not reporting sustainability data, so I’m thrilled to see that it’s produced a detailed ESG report for 2019. Now that the company is finally disclosing data, I expect it to start popping up more regularly on lists of sustainability leaders. About 0.2% of its energy generation comes from relatively carbon-intensive natural gas co-generation (also known as combined heat and power), so although it isn’t quite 100% renewable, I still consider it to be green.

Brookfield Renewable Partner’s share price fell by 30% like the rest of the market during the crash, but has recouped more than two-thirds of that loss in the rebound. The stock is expected to pay a generous 4.82% annual dividend.

Tim Nash blogs as The Sustainable Economist and is the founder of Good Investing.

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Kimberly-Clark is an American consumer products company that makes personal care products like diapers, tissues, and yes, toilet paper. Some of its brands include Huggies, Kleenex, Kotex and Cottonelle. I was quite skeptical of Kimberly-Clark going into my research. The forestry sector, in general, has a chequered past with impacts on biodiversity loss, climate change, and indigenous rights.  As far back as 2005, Greenpeace vocally accused Kleenex of blowing our noses on the Boreal forest.

Earlier this year, Natural Resources Defense Council (NRDC) and Stand.earth released a damning new report: The Issue with Tissue: How Americans are Flushing Forests Down the Toilet. You may have also read about how disposable wipes are creating costly sewage systems clogs or ‘fatbergs’ – giant clumps of unflushable waste mixed with grease. How could I forget learning about the epic fatberg found in London, England that was 250 meters long and weighed 130 tonnes in 2017.

It’s worth noting that, since Greenpeace’s early campaign, KC developed a sourcing strategy that dramatically increased its recycled content (anywhere from 24 to 28% of its total fibre usage is currently recycled). And the vast majority of its virgin tissue fibres are certified by the Forest Stewardship Council (FSC). FSC certification isn’t perfect. The NRDC calls FSC certification a floor, not a ceiling for responsible sourcing. But it’s the most respected forestry certification out there.

No matter how stringent FSC certification becomes (it’s just announced comprehensive new Canadian standards), some environmentally conscious investors may not want to flush trees down the toilet. Lucky for them, there is a Canadian company that produces a line of toilet paper from 100% recycled fibre. Cascades is a Quebec-based paper company that produces tissues and packaging, with a long history of sustainability leadership.  Across its entire product line, 82% of its fibres come from recycled sources, and any virgin (non-recycled) source material comes from FSC-certified sources. Cascades has also hired a third-party firm EcoVadis to assess suppliers on sustainability criteria. With all of these initiatives, it’s no surprise that Cascades is a common sight on Corporate Knights’ ranking of the best 50 Corporate Citizens in Canada list (the 2019 list will be released June 4^th).

From an investment perspective, Cascades is a much smaller company than Kimberly-Clark and pays a smaller dividend. Cascades could see higher revenue growth from expansion into areas like 100% recycled food packaging, and may provide better growth over time as the anti-plastic wave picks up.

Both companies have good sustainability scores, but I’ll give Cascades the win for this week’s Sustainable Stock Showdown since it is the Canadian king of virgin tree-free paper products.

Beta is a measure of a stock’s volatility in relation to the market. By definition, the market has a beta of 1.0, and individual stocks are ranked according to how much they deviate from the market. A stock that swings more than the market over time has a beta above 1.0. Lower beta means less risk.

Have a company in your portfolio that you want to replace with a more sustainable option? Write us an email or send us a tweet!

Tim Nash blogs as The Sustainable Economist and is the founder of Good Investing.

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