Complex overlapping forces, such as the pandemic, war, migration and energy scarcity, are transforming the world in as yet unknown ways. Today’s leaders need to be collaborative, communicative and agile to be effective in this landscape – soft skills are now essential skills to thrive.

But too many of today’s corporate leaders continue to cling to leadership practices from a bygone era, leaning into archetypes that are ill suited to addressing the world we live in today – highly networked, and rapidly evolving.

Henry Ford and John Rockefeller were influential figures in shaping modern management of big business in the 1910s. This first wave of corporate leaders operated their companies with an autocratic style, viewing lower-level managers and workers as extensions of their own will.

In today’s fast-changing world, the contributions of employees are indispensable, and relying predominantly on top-down decision-making processes results in long delays or inaction. Instead, there is a growing trend toward distributed leadership models that catalyze and empower collective action rather than control and direct it. These people are systems leaders and can drive change.

Systems leadership combines familiar skills such as subject expertise, strategy, program management, coalition-building and collaboration in new and different ways to create systemic transformation that leads to tangible change. It’s a leadership model that acknowledges the complexity of modern society and the interconnectedness of various systems. It allows leaders to identify the root causes of problems and work toward sustainable solutions that address multiple issues at once.

Take Kate Bingham, for example. She left her job as a venture capitalist in July 2020 to head the U.K.’s Vaccine Taskforce, realizing quickly that “we had one shot to get it right and no time.” Without a playbook to guide her, she ordered vaccines from seven developers instead of the EU’s vaccine-buying group, with no certainty that even one of them would work. Bypassing established contracting procedures, she struck “creative” deals, as the government later reported. She was, of course, criticized – but her approach enabled Britain to secure large vaccine supplies and get people vaccinated.

Under Satya Nadella’s leadership, Microsoft has undergone a transformation from a traditional software company to a cloud-based technology leader. One of the hallmarks of Nadella’s leadership style is his focus on empowering employees to take risks and innovate. He has emphasized the importance of creating a culture of learning, where employees are encouraged to experiment and learn from failure. This approach has led to the development of innovative products and services, such as Microsoft Teams, which became a vital tool for remote work during the COVID-19 pandemic. Microsoft has achieved record growth and profitability, with the company’s stock price increasing more than 500% since Nadella became CEO in 2014.

Too many of today’s corporate leaders continue to cling to leadership practices from a bygone era, leaning into archetypes that are ill suited to addressing the world we live in today.

In the past, business leaders focused solely on serving shareholders and the bottom line. Since they were often making up the rules for nascent industries that didn’t have them, the pioneering bosses relied on decisiveness and self-confidence to plot their course through uncharted waters. And, of course, they had an impact. Ford is credited with developing the modern assembly line and mass-production techniques. He is also known for his commitment to paying his workers a living wage, which he believed would increase their productivity and loyalty to the company. Rockefeller was able to dominate the oil industry and become one of the most powerful men in America. However, his ruthless tactics were controversial  and ultimately led to increased government regulation of business practices.

In the 1980s and 1990s, it was General Electric CEO Jack Welch who put his indelible stamp on how to lead. He took the company from one that only sold appliances and light bulbs to a booming multinational corporation with multiple product lines. Business schools were erected teaching the “Welch Way.” However, the toxic results-oriented culture he created at GE contributed to its eventual downfall. In recent years, many have questioned Welch’s strategy, leadership style and legacy. Was he really a CEO that today’s emerging business leaders should emulate?

Today, having a high-performing, profitable company isn’t enough. In the boardroom, there’s a broader set of concerns that includes sustainability; climate change; equity, diversity and inclusion; and an overall commitment to responsible leadership.

While there is recognition from global corporate leaders that many of the forces we are facing have far-reaching impacts, they continue to be viewed through a predominantly business-oriented lens. The environment, for example, continues to be treated like an external variable that has the potential to affect the bottom line, rather than a resource that has value beyond quarterly reports. The pyramid-style hierarchies with the Welches of the world at the top need to be replaced by leadership models that feature flexible, flatter hierarchies that revolve around shared leadership built on a clear mission and purpose.

Leaders who can navigate complex landscapes with flexibility and creativity are much more likely to succeed than those who cling to outdated models of leadership. Doing this sounds simple and obvious, yet most find it difficult. We are experts at denying or minimizing a new reality: it isn’t all that significant, we tell ourselves, or it isn’t new, and besides, it won’t last very long, and then the comfortable status quo will resume.

Leaders who can navigate complex landscapes with flexibility and creativity are much more likely to succeed.

In times of heightened uncertainty, “leaders that embrace a consistent application of values stand out,” says Narinder Dhami of New Power Labs, a platform to flow capital more equitably. We may not know what lies ahead, but a leader creates trust and a sense of safety by behaving fairly and consistently connecting their actions to values. And because they are confronting new realities, they are also open to pivots and detours if necessary.

Mike McInerney, a former HR executive in corporate Canada and now co-founder of Rapid Alignment, argues that principle-based leaders “create greater, more trusting and communicative relationships that are required to move organizations forward when they are facing turbulent times.”

Traditional models of leadership are no longer sufficient to navigate the rapidly changing world we live in. As such, we must continue to identify and learn from leaders who have moved us through chaos with humanity. Leaders like Jacinda Ardern, the former prime minister of New Zealand, who showed the world that leading with compassion can deliver results. Ardern’s leadership style played a critical role in promoting healing and unity after 51 people were killed by a white supremacist at two mosques. Her focus on compassion, inclusivity and decisive action helped to build trust and confidence in her leadership, and her response to the crisis has been widely praised, both domestically and internationally. Her leadership style also highlights the importance of transparency and communication in times of crisis.

Systems leaders apply an unusual combination of skills and attributes. Like many of today’s leaders, they are smart, ambitious visionaries, with highly developed management and execution skills. But what sets them apart is how they use their “soft skills,” such as compassion and communication, to create inclusive environments where innovation and creativity thrive. These leaders don’t try to place complex issues in silos but take a networked approach and play the long game, placing an emphasis on creating trust, because business moves at the speed of trust.

Shilpa Tiwari is the co-founder of Isenzo, a boutique firm that takes a systems approach to ESG. 

The post Time to move beyond the autocratic CEO appeared first on Corporate Knights.

You’d think with these leisurely lunches and 30 days of paid vacation that the country would rank quite low on the economic productivity podium. (The law mandates 30 days of paid vacation and many take all of August off.) But look at international productivity rates, which are based on the number of hours worked and the amount of GDP yielded. According to Expert Market’s annual analysis, you’ll find the French are just about as productive as Canadians, falling only one spot behind us at number 14. What gives? Slowing down, taking breaks and letting our systems rest is a key factor in making sure our workplaces are sustainable for the people that work in them.

Yet Canadians are more frazzled at work than ever. A recent poll by IPSOS found that 45% of Canadians say work is a major cause of their stress and 52% say they are more stressed than they were five years ago.

Unlike the French, studies have found that Canadians rush through lunch and that most of us eat at our desk in less than half an hour. On average we take two weeks of vacation a year, which makes us more prone to stress and not as well equipped to handle it. So how are companies getting their employees out of go-go-go mode while not living la vie en France? Corporations like Google, Microsoft and Apple have been investing in mindfulness training for years to better their employees’ mental health, increase focus and productivity. SalesForce Chicago even has mindfulness zones. By re-wiring our brain to tune into the present in spite of the busyness around us and within our own minds, employees are finding calm in the middle of busy work places.

When insurance giant Aetna invested in mindfulness training, productivity gains added up to about $3,000 per employee and health care costs came down by 7%. When we’re in fight or flight mode too often, sparked by an email, deadline or tough conversation with our boss and long hours at the office, we can get run down and more prone to burnout. And if we don’t have the lengthy vacation time of our European counter parts, using moments at the office to find peace through mindfulness can help us navigate a tough work day. One study actually found that meditation can have a longer lasting effect on stress than a vacation.

All this clear mindedness has a long list of benefits but in his new book McMindfulness: How Mindfulness Became the New Capitalist Spirituality, Ron Purser says that, in the wrong hands, it can be used by employers as a tool for corporate compliance. As The Nation argues in a review of Purser’s book,  “rather than organize to change the need for self-care and breathing exercises in the first place, corporate mindfulness, or McMindfulness, becomes a pacifier,” one that teaches workers that emotions like stress and anger are all in your head. Blame shifts to the individual instead of looking at the drivers of stress within the organization.

This doesn’t mean we should walk away from corporate mindfulness altogether. It can be a helpful starting point for a healthier life-work balance. And research shows mindful employees might be even be inclined to make more environmentally driven decisions for their company. A study published in the Journal of Corporate Citizenship found that in comparison to traditional corporate social responsibility training, meditation and relaxation techniques resulted in more socially conscious behaviours.

Mindful employers that value the health and wellbeing of their staff and the planet might also want to consider a different form of slowing down by following the lead of the French and reducing the number of hours worked.

One New Zealand company, Perpetual Guardian, experimented with reducing the number of workdays to four days a week. Data collected by two academics found that Perpetual Guardian’s employee happiness, creativity and energy levels were boosted and stress levels declined. “Their actual job performance didn’t change when doing it over four days instead of five,” said one of the lead researchers. The company then moved to make the trial more permanent.

The state of Utah experimented by cutting one day out of the workweek and adding extra hours to Monday and Friday. In ten months, the state saved 1.8 million in energy costs and 12,000 tons of CO2 a year.

Countries that work more aren’t just more stressed, they also pollute more, use more energy and increase greenhouse gas-heavy commuting as well as mindless consumption. Perhaps the impending climate crisis will force us to question the fast-paced living and endless growth mindset that’s wearing employees to the ground and pushing our planet to the brink. One of the fathers of capitalism, John Maynard Keynes, saw growth as a temporary measure for development. In 1930, he predicted it would end in a century.

If the data is showing us that slowing down and being more mindful is resulting in happier, healthier workers and a greener and potentially more stable economy, perhaps it’s time for Canadian CEOs and politicians to take note.

Kate Petriw is the bestselling author of Let That Sh*t Go: A No Filter Approach To Mindfulness. She came across mindfulness five years ago while trying to resolve unchecked stress sparked by work in the corporate world. She started an organization called Mind Matters, which gives workshops on mental health.   

The post How slowing down corporate culture can help the planet appeared first on Corporate Knights.

Duhigg uses the example of former Alcoa chief executive Paul O’Neill, who took a struggling U.S. aluminum manufacturer and turned it around by being obsessed with one operational indicator: workplace safety.

Not only did O’Neill improve the company’s lost-day injury rate to 0.2 per 100 workers, down from 1.86, he created a culture of safety that has since seen the rate drop to 0.125. Workplace safety statistics are now published publicly on the company’s corporate website, in near real time. On O’Neill’s watch, the decline coincided with a quintupling of Alcoa’s net income and a 15-fold increase in revenue.

An impressive accomplishment, one that got O’Neill handpicked by former U.S. president George W. Bush as America’s 72^nd Secretary of the Treasury. And little did he know that, 13 years after leaving Alcoa, his work at the company would be referenced by the U.S. Occupational Safety and Health Administration (OSHA) to support new disclosure regulation – an expanded “name and shame” rule – that has proven highly unpopular with many American businesses.

David Michaels, an assistant secretary with the U.S. Department of Labor, revealed the details at a press conference last November with a cheerleading O’Neill by his side. Under the proposed rule, employers with 250 or more employees would have to start electronically reporting to the OSHA all serious workplace injuries soon after they occur. That data – including company name, type of injury, and cause – would be posted online for anyone to see.

Extreme Disclosure

Citing the fact that about three million American workers at private companies got injured or ill on the job in 2012, Michaels said such a rule is necessary to “save lives and limbs.”

“How will this make workplaces safer?” he asked. “Public posting of workplace injury and illness information will nudge employers to better identify and eliminate hazards.” The better public disclosure will allow businesses to compare themselves against their peers, while prospective employees will have a way to find out how companies in a sector rank on work safety, Michaels explained.

O’Neill, when introduced later, praised the initiative. “I hope it’s a step but not the final step.”

Many industry watchers cringed, including Howard Mavity, an Atlanta-based labour lawyer with the law firm Fisher & Phillips.

“It’s possible this information will be misconstrued and used unfairly to sully the reputations of employers,” wrote Mavity in a guest post on Forbes.com earlier this year. He described the data published as “lagging indicators” of events that have already happened. “Anyone in the safety profession knows that putting too much emphasis on lagging indicators fails to increase workplace safety.”

Employers should be encouraged instead to do better at communicating safety to employees, Mavity added. “They shouldn’t have to waste valuable time defending themselves to the media. Taking the time everyday to remind employees to be safe is what works. Not publicly shaming employers.”

Joe Trauger, vice-president of human resources policy for the National Association of Manufacturers, said the proposed rules would make information publicly available without context and create confusion. “The raw data may result in unfair conclusions or judgments about a company or particular industry based on information that is not indicative of the actual safety record.”

The OSHA forged ahead nonetheless. In September it formally announced the new rule, which will come into force on January 1. It requires large businesses, with some exceptions, to continue reporting job-related fatalities but within eight hours of happening. On top of that, worker amputations, eye losses, and hospitalizations from injuries must be reported within 24 hours. The reports will have to be called in or submitted via a web portal, but industries with low injury and illness rates are not subject to the rule.

Michaels, in a statement, called hospitalizations and amputations “sentinel events” that reveal serious hazards in a workplace. “An intervention is warranted to protect the other workers at the establishment.” The idea is that by putting such public pressure on an employer it will be forced to raise its game.

Going too far?

In Canada, detailed reporting to worker compensation boards is required. For more serious injuries and fatalities, each province’s ministry of labour must be notified. But data is only publicly released once it is aggregated. Only when a company is investigated and formally charged for a workplace incident are its name and details of the event publicly accessible.

“When you look at how the OSHA operates in the United States versus provincial and federal structures here, things are publicized in Canada but not like south of the border,” said workplace safety consultant Jeff Thorne. The media may discover and reveal details independently, but news outlets are picky about what they cover. “Unless it involves a young worker or it’s a major fatality at a large corporation, you may never hear about it.”

He said in Ontario there have been limited discussions about creating a better way to register occupational injuries and fatalities, but whether such a database would be accessible to the public is unclear. “It’s hard to tell how far along that discussion is.”

Norm Keith, a lawyer with Toronto-based Fasken Martineau who specializes in workplace health and safety, said there is definitely a need for better data collection and disclosure standards, allowing apples-to-apples comparisons across geographies and within sectors, but he has reservations about the name-and-shame approach.

“I have many clients going to trial to defend not so much that they think they’re perfect, but because they can’t afford a conviction in a press release,” he said. A company’s competitors are more than happy to highlight that information when bidding for business in hopes of winning a contract.

Authorities need to be careful in how far they go, Keith said. “Is there benefit from a deterrence perspective? Ultimately, there has to be some fairness and consistency in the way they do it.” For this reason, he added, naming and shaming should probably continue to be governed by the courts.

Corporate Knights contacted the OSHA’s media relations department to request an interview. We were told to submit some questions in advance, which we did. Among them: How measurably effective has this approach been so far? Nearly three weeks after the original request, and after two follow-up queries that elicited no reply, the agency has been silent.

Absent supporting research, workplace safety experts will be watching closely over the next couple of years to see if the U.S. name-and-shame rules do, in fact, lead to a reduction in workplace fatalities and injuries. From Corporate Knights perspective, improving workplace safety disclosure standards, and requiring companies to self-report this high-level data in quarterly and annual reports, may be a more effective approach than government’s creating shame lists, especially when companies may not ultimately be charged with a workplace violation.

Such an approach would set a baseline standard for all companies, and give industry leaders, such as Alcoa, a chance to demonstrate best practices and rise above their peers.

(This story is the fifth 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.)

The post Can “name and shame” reduce worker injuries? appeared first on Corporate Knights.

The data says they aren’t, and this has many in the occupational health and safety profession concerned.

Corporate Knights Capital, in its recent report “Measuring Sustainability Disclosure,” analyzed all seven so-called first-generation sustainability indicators and found that only 11 per cent of the world’s 4,609 largest companies disclosed their worker injury rate in 2012.

It was the lowest disclosure rate of all seven indicators. By comparison, 39 per cent of companies disclosed their greenhouse-gas emissions and 59 per cent reported pay equity data.

For some industries, such as financial services, the low disclosure rate arguably makes sense. For example, only 2 per cent of the 382 largest banks reported workplace injury and fatality numbers in 2012. Of the world’s 156 biggest insurance companies, 1 per cent reported fatality figures and 3 per cent disclosed injuries.

Industries related to manufacturing, construction and other higher-risk activities are better at reporting, but have a long way to go. Of 369 large energy companies, only 14 per cent disclosed workplace deaths while 17 per cent reported injuries. Automotive and capital goods companies didn’t do much better.

“Human resources have become one of the most important productive assets in many industries, so it is quite disturbing that only a minority of companies are reporting on safety metrics at the workplace,” said Michael Yow, lead analyst at Corporate Knights Capital. “That only 17 per cent of the world’s oil and gas companies are reporting on worker safety is quite alarming, given they represent one of the most hazardous industries out there.”

The best discloser was the materials industry, where 20 per cent of the 406 companies analyzed reported fatalities and 33 per cent reported injuries. Still far short of where industry needs to be on worker safety, experts say.

“It’s amazing how often safety is left out of the sustainability discussion,” said Jeff Thorne, a workplace safety consultant with Occupational Safety Group. “It’s still a newer concept, believe it or not, to include safety as a performance indicator.”

But as Tom Cecich, chair of the U.S.-based Center for Safety and Health Sustainability (CSHS) told Corporate Knights, “High profile, tragic global incidents have highlighted the need for better occupational health and safety transparency and reporting.”

(Disclosure: CSHS is co-sponsor of this Workplace Safety web series).

Questionable Data

Indeed, poor disclosure isn’t the only problem. The CSHS reviewed the corporate social responsibility, sustainability and annual reports from 100 companies that appeared on Corporate Knights’ 2011 Global 100 ranking.

In a report it released in February 2013, the CSHS revealed a “high variability in terms and definitions” used by companies that disclosed workplace safety metrics, making it difficult to compare company performance.

“Corporate transparency is not achieved simply by disclosing information,” according to the report. “The information disclosed must also be meaningful.”

Part of the problem, it concluded, was lack of clarity from sustainability reporting frameworks, most notably the widely used Global Reporting Initiative (GRI). For example, GRI only asks companies to provide information on “total workforce,” but it doesn’t define “worker,” leaving it open to interpretation. Does it include contract workers? Temporary workers? What about workers further down the supply chain?

The report also found that 15 different methods were used to define a “report-worthy injury” or incident and six different formulas were used to calculate an overall injury rate. Companies were either ignoring GRI guidelines or being confused by them. In other words, the guidelines appeared to be ineffective.

It’s no surprise that in 2012, when GRI began accepting public comment for its planned fourth-generation guidelines, the issue of occupational health and safety received the fourth-highest number of submissions. In response, the GRI decided to create a working group for workplace safety that would inform updated guidelines.

The goal was to improve clarity and transparency of workplace health and safety guidelines. Despite good intentions, not much has happened since. “As of October 2014 GRI has not started the workgroup due to funding issues,” said Cecich.

The main reason CSHS produced its 2013 report was to offer insight for the multi-industry stakeholders expected to sit on the working group. The report’s recommendations were clear:

• Standardize terms and definitions to eliminate confusion and create a consistency of reported data that allows apples-to-apples comparisons within sectors and across geographies;

• Encourage complete reporting of all leading indicators related to occupational health and safety, as well as reporting over multiple years to allow for internal and external stakeholders to gauge whether a company is improving or not;

• Expand coverage beyond just company staff to include temporary workers and subcontractors, as well as workers in the supply chain, all of them “growing and highly vulnerable segments of the global workforce.”

(This story is the fourth 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.)

The post Companies not reporting on worker safety appeared first on Corporate Knights.

A recent roundtable hosted by the Guardian tackled the issue of food sustainability from both the production and consumption perspective. Experts who took part in the discussion came up with a list of 10 things we can do to make our food system more sustainable, including wasting less food, shifting our diets away from meat, shortening the supply chain that links farm to plate, and reducing the losses that can occur just after crop harvest. Some degree of food waste, of course, is inevitable. That’s why the world’s most popular amusement park, Walt Disney World, has installed an anaerobic digestion system within the Magic Kingdom to turn food scraps generated from park visitors into energy for its hotels and facilities.

Solar bonds for all

SolarCity, the largest installer of rooftop solar systems in the United States, has started selling solar bonds to anyone in the country with a bank account who is over the age of 18, reports the New York Times. The bonds must be purchased in minimum increments of $1,000, but buyers can select from between one and seven years maturity – the longer the maturity the higher the annual interest payments, which range from 2 per cent to 4 per cent. SolarCity plans to issue up to $200 million in bonds for interested retail investors. It’s the latest effort – and perhaps biggest to date – to give the general public a chance to invest in solar projects without having to install them on their own homes. Others include Oakland, Calif.-based Solar Mosaic and Toronto-based SolarShare, which sells community bonds backed by Ontario’s feed-in-tariff program.

Cars and grid unite!

We’re getting closer to vision of using electric vehicles as an extension of the power grid. The Electric Power Research Institute (EPRI) held a demonstration this week of new software that allows plug-in vehicles to provide energy storage support for the electricity system. The software, once commercialized, will allow utilities to sign up EV owners as part of mobile demand response programs using a common standards-based interface. At the same time, EV owners will be able to instruct their vehicles to charge up only during off-peak periods when power is cheapest. The potential is huge. As CK reported recently, EV charging stations are now as ubiquitous as our most popular coffee and fast-food chains. The EPRI demonstration is notable because it involves the participation of 16 utilities and eight major automakers.

Why do western workers hurt more?

Our series on Workplace Safety continues today with a piece by Corporate Knights’ editor Tyler Hamilton, who reports on the difference between Canada’s east and west when it comes to measuring workplace loss-time injuries. It’s generally known that workers in the west are more at risk of injuring themselves on the job than those in the east, but nobody seems to know why. Data analysis by CK shows that injury claims have fallen in every Canadian province since 1992, but whereas western provinces have seen declines of less than 10 per cent eastern provinces have seen declines exceeding 50 per cent. Many theories abound, but more research is needed to figure out why.

Cement plant turns CO2 into baking soda

A cement plant in Texas operated by Capitol Aggregates will soon start capturing carbon dioxide from its cement-making process so it can turn the greenhouse gas into industrial chemicals, such as sodium bicarbonate (i.e. baking soda) and hydrochloric acid. The chemicals will be sold into the marketplace, helping to offset the cost of the process with the idea that it could eventually become a profitable venture. The company behind the process is Austin-based Skyonic, which CK mentioned in its “Why Bury the Treasure?” article back in 2012.

The post Daily roundup Oct-17-2014 appeared first on Corporate Knights.

What’s in that stink?

SC Johnson, the Wisconsin-based maker of household cleaning and air freshening products, said Thursday it would start disclosing the fragrance ingredients in specific products in spring 2015. The company, like many in the industry, does disclose overall ingredients but has not previously tied those ingredients to particular products. It will begin this new disclosure initiative in the United States and Canada, then Europe, starting with air care products and expanding from there into other categories. It may be the right thing to do, but it’s also a reaction to main competitor Clorox, which announced in late September it would start product-specific ingredient disclosure. It’s a big shift for the industry, which has historically been extremely secretive about fragrance ingredients.

Control of dot-eco domain goes to Canada

Corporate Knights reported Thursday that ICANN, the world’s Internet domain regulatory body, has given control of the new “dot-eco” top-level domain to a small Vancouver-based company called Big Room, which in its application had the backing of a global coalition of more than 50 environmental organizations. It took Big Room seven years, and a short-lived battle with another applicant backed by former U.S. vice-president Al Gore, to convince the regulator it would give the dot-eco domain a higher social purpose. The company hopes to have its dot-eco name registry operating sometime next year.

CK launches workplace safety web series

Visit corporateknights.com throughout the rest of October to follow our just-launched workplace safety web series, starting with today’s in-depth piece by award-winning journalist John Lorinc. In his story, Lorinc identifies fundamental shifts in our economy that are making traditionally low-risk, “safe” jobs – such as part-time retail and hotel service positions – more dangerous. The series is a partnership with the Canadian Society of Safety Engineering and the Center for Safety and Health Sustainability. Over the coming three weeks, we’ll also look at which industries are best and worst at disclosing workplace safety data, as well as the challenge of making sure safety standards trickle down through the supply chain. Another question we’ll answer: Why are injury claims in Canada’s east falling faster than in the west? Finally, we’ll end with a report on Canada’s latest worker safety data.

California tops at preparing for climate change

A new online tool developed by the Georgetown Climate Center lets users easily find out which U.S. states are making the most progress with climate adaptation and which ones are lagging behind. And, perhaps to no one’s surprise, California has come out on top, followed by Massachusetts and New York, reports Grist.org. This is exactly how Corporate Knights scored the Top 3 states in its Green Provinces and States ranking, which we released this past June. The difference is that instead of focusing on climate adaption plans, CK’s ranking scored states and provinces on 10 key performance indicators across six categories – air and climate, water, nature, transportation, waste, energy and buildings. We also had a 10-point bonus system that rewarded jurisdictions for having certain environmental programs in place. What’s interesting – and sad – about the Georgetown ranking is that just 14 out of 50 states have a finalized climate plan.

Tesla Unveils Powerful Model D

For all you Elon Musk fans out there, we would be remiss to not mention the unveiling yesterday of Tesla Motors’ new Model D electric car, or officially called the P85D. Wired.com is calling it Tesla’s “most powerful car ever.” That’s assuming, of course, you consider 0 to 60 miles per hour in 3.2 seconds fast. The Model D – basically a sportier, turbo-boosted version of the Model S – will also have all-wheel drive and an autopilot feature. “Tesla is adding a radar that can see through fog and snow; a camera with image recognition capability to spot traffic signs and lights, as well as pedestrians; 360-degree ultrasonic sonar; and a system that combines all the data those produce with navigation, GPS, and real-time traffic systems,” according to Wired.com.

The post October 10, 2014 appeared first on Corporate Knights.

Why has business school research and teaching largely ignored co-ops? The answer to this question is part historical, part ideological.  

Historically, the contemporary business school has grown with the modern shareholder-governed business corporation. As such, business education has always been focused around educating professionals who are interested in a career in these particular organizations.

It is the large corporation in which, over the last century, management has become a profession and the MBA degree the ultimate certificate of being a member of this profession. Consequently, business education has focused on those large corporations at the neglect of other forms of business organization, such as cooperatives. That neglect, by the way, has also been palpable with regard to small-and medium-sized enterprises and not-for-profit organizations.

Beyond this historical explanation there is also an ideological reason for this bias. Certainly since the 1970s, with the rise of what today is often referred to as “neoliberal” thinking, business schools by and large have bought into a view of the firm as an organization whose only purpose is the maximization of its shareholders’ wealth.

Making investors wealthy is still the main game in town. This, of course, is fundamentally opposed to the idea of a cooperative, where the main purpose is to achieve some social goals while at the same time using collaboration as an approach to improve the lot of all people involved in the business.

Cooperatives are based on the assumption that working together as producers, employees and investors (often in the same person) will make everybody better off. Cooperatives represent a “stakeholder view” of the firm, where the purpose of the firm is not just to enrich investors or shareholders but to operate as a social venture that serves the interests and purposes of multiple communities.

On that note, then, having an issue of Corporate Knights focusing on cooperatives is a timely venture. Certainly after the financial crisis of 2008 we have seen some serious navel gazing in the business community. No less than Dominic Barton, global managing director of McKinsey, and Harvard strategy guru Michael Porter have raised their voices to actively think about a different approach to doing business. Seeing business as just extracting value for one single constituency is just not working – it’s not sustainable.

The debate on alternative forms of organizing and governing businesses is in full swing. Cooperatives are just one example. Looking at countries such as Italy, Spain or Switzerland shows that cooperatives can actually be a major player in the economy. And a profitable option, too. Migros, the Swiss cooperative retail chain, is a major multinational player in many markets. And a lot of our super-elite Italian fashion gadgets are produced by cooperatives.

It is time to move beyond the shareholder-dominated view of the firm. Business has always been about creating goods and services that address social needs – or, more simply put, stuff that real people need. Cooperatives are a unique example of how people in a specific situation come together, “cooperate” and collectively create value for all involved.

We should be thinking more creatively about this form of organizing business – and it should definitely play a larger role in the classroom.

The post Business schools and co-ops appeared first on Corporate Knights.

Executives at the Walmart Global Sustainability Milestone Meeting in September rolled out two ambitious initiatives meant to reduce chemical and pesticide use throughout its supply chain. The Bentonville, Arkansas-based retailer will be working with suppliers to institute the Consumables Chemicals initiative, a policy to eliminate 10 priority chemicals from household cleaning, personal care, beauty and cosmetic supplies in products sold at both Sam’s Club and Walmart. Developed in collaboration with the Environmental Defense Fund, it will also focus on expanding public disclosure of ingredients. Some companies have issued restricted substances lists, says Sarah Vogel, director of EDF’s environmental health program, but “no other company is requiring the all-important, but often forgotten, second step to truly transformational phase-outs: putting a system in place that avoids regrettable chemical substitutions.”

With groceries accounting for 51 per cent of Walmart’s U.S. sales last year and expanded home delivery service on the horizon, pesticide use now accounts for roughly half of the retailer’s carbon footprint. The company also announced new agreements with 15 key suppliers to lower pesticide use, with the goal of cutting fertilizer use by up to 14 million acres of American farmland by 2020. “Using less energy, greener chemicals, fewer fertilizers and more recycled materials is the right thing to do for the planet and it’s right for our customers and our business,” said Walmart president and chief executive Mike Duke in a statement.

The world’s largest retailer has grown increasingly aggressive in pursuing sustainability initiatives, even as its fierce opposition to organized labour and higher wages remains a contentious issue. Hundreds of U.S. employees took part in demonstrations across 15 cities in September. The company has been accused of deliberately avoiding Affordable Care Act health insurance requirements by hiring more temporary workers. This has been paired with attempts to reduce the number of employees per store to save costs, which has affected sales. In a victory for labour advocates, Walmart backtracked on the temporary worker policy in late September by moving 35,000 workers to full-time status in an attempt to improve employee performance and retention.

Zero: JP Morgan

A wholly owned subsidiary of JPMorgan Chase is currently under criminal investigation for obstruction of justice in regards to a regulatory probe into electricity market manipulation. The largest bank by asset size in the United States settled Federal Energy Regulatory Commission (FERC) allegations that it exploited electricity power market loopholes with a $410 million payment on July 30, but may have attempted to head off the investigation by withholding key documents from the FERC. The commission alleged that JPMorgan exploited loopholes in the electricity trading markets to drive up prices in the Midwest and California between 2010 and 2012. It suspended JPMorgan from participating in the electric power market in November 2012 while conducting its investigation on the grounds that the company “made factual misrepresentations and omitted material information over the course of several months.” JPMorgan did not admit any wrongdoing in the July settlement, and is “pleased to have this matter behind us,” according to JPMorgan spokesman Brian Marchiony. It has stated repeatedly that all required documents were turned over to the FERC in a timely manner. No charges have yet been filed.

The Federal Bureau of Investigation and the Manhattan U.S. Attorney’s Office began to investigate JPMorgan’s actions in the aftermath of the July settlement, after several federal lawmakers began questioning the terms of the agreement. Massachusetts senators Elizabeth Warren and Edward Markey wrote FERC demanding to know why no employees who “impeded the commission’s investigations” were being held accountable. The Senate Permanent Subcommittee on Investigations has launched its own probe into the terms behind the FERC settlement, focused in part on allegations of a cover-up.

Faced with over a dozen investigations by separate federal agencies, states and foreign governments on everything from foreign bribery allegations to questionable debt collection practices, JPMorgan posted a rare loss in the third quarter, with fines wiping out quarterly profits. It has paid $3.68 billion in total throughout 2013. The Wall Street Journal reported on Sept. 25 that JPMorgan may be facing the largest bank fine in history ($11 billion) over the fraudulent sales of mortgage-backed securities.

Click here to view our complete Heroes and Zeros series.

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Given the casual dress code, the big black dog resting in front of the bar and the beautiful interior of glass, wood and steel, the brewery appears a nice place to work. So do the other boutique businesses on this trendy stretch of Toronto’s Ossington Avenue. What makes the brewery different is the formal commitment made to its workforce as one of the original signees of Wagemark – a recently launched international standard for workplace wage ratios.

To receive Wagemark certification, an organization’s top-paid employee cannot make more than eight times the average compensation of the bottom 10 per cent. The foundation of research the non-profit builds on suggests the wider the income gap, the poorer the performance of both companies and countries. But will the idea sell?

“We actually are pro-capitalist,” says Peter MacLeod, Wagemark’s founder and interim executive director. “We just want everybody to enjoy the fruits of their productivity. It’s about competitiveness. It’s about business, sustainability, the durability, the resilience of an organization.”

MacLeod argues places such as Scandinavia and Japan are examples for the rest of the world. “You look to societies with low income disparities and you see that they not only outperform us around [quality of life], they also outperform us on some important economic indicators, whether it’s productivity, whether it’s a social-economic indicator, like generational mobility.”

In a report published by the University of California, Berkeley, in September, economist Emmanuel Saez found that post-recession income gains made in the U.S. from 2009 to 2012 were 31.4 per cent for the top 1 per cent compared to 0.4 per cent for the remainder. Bloomberg reported in April that J.C. Penney’s CEO had been paid 1,795 times as much as the average company employee.

MacLeod says Wagemark isn’t about “naming and shaming” companies and their leaders, nor does he expect such companies to sign up. But J.C. Penney could learn something from the fallout after its CEO’s golden parachute, when the company’s share price slid, MacLeod points out. “The company has rarely been in a weaker position. They can take whatever lesson from that they like.”

Income disparity has received increased political attention in the United States lately. The Securities and Exchange Commission (SEC) is preparing to vote on a proposal that will require companies to reveal the pay gap between CEO compensation and the median compensation of their workforce, based on a sample of employees. The proposal is a mandate of the 2010 Dodd-Frank Act and expected to pass with three out of five SEC votes; two Democratic and one independent versus two Republican.

While not as extreme as those in the U.S., pay gaps in Canada have also increased. According to the Canadian Centre for Policy Alternatives, the 50 highest paid CEOs made over 200 times as much as the average Canadian wage in 2011, compared to 85 times in 1995.

Wagemark, which is Toronto-based, was inspired in part by The Spirit Level, a book written by British epidemiologists Kate Pickett and Richard Wilkinson. The two researchers argue that equal societies are better for all who live in them. Wilkinson has served as an advisor to Wagemark. “It’s at work we have most to do with each other, yet it’s at work we are most divided by hierarchy. We can change that,” says Wilkinson on the phone from London. “Work ought to be the place where we can get our sense of purpose and our sense of self-worth and appreciation by others.”

Taking a step back, Wilkinson argues, “The big, long-term objective for progressive politics, as well as dealing with sustainability, has got to be to democratize our economic institutions, to extend democracy by pursuing all forms of economic democracy. I do regard the bonus culture as an indication of a lack of any democratic constraint on people at the top. They think they can do just what they like.”

When The Spirit Level was published in 2009, it was predictably lauded by the left and lambasted by the right. As Pickett and Wilkinson write in a postscript to their 2010 edition, the criticism has often been political, not scientific. They maintain that mental health, physical health, obesity, educational performance, teenage births, violence, social mobility and imprisonment all relate to levels of inequality.

The authors dedicate a chapter of their book to the connection between inequality and sustainability. “Given what inequality does to a society, and particularly how it heightens competitive consumption, it looks not only as if the two are complementary, but also that governments may be unable to make big enough cuts in carbon emissions without also reducing inequality,” they write. Interestingly, according to data cited in The Spirit Level, business leaders in more equal countries tend to be more positive towards public policy that complies with international environmental agreements than their peers in more unequal countries.

MacLeod says he doesn’t expect every company to agree with the worldview Wagemark represents, but he’s not necessarily going after the Fortune 500. His focus instead is on medium-sized organizations that have hundreds of employees, not tens of thousands; that have tens and hundreds of millions of dollars in revenue, not billions; and that have strong corporate cultures where people still have a sense of being a part of the same organization.

He also doesn’t expect Wagemark to be a silver bullet for workplace inequality, but more of a long-term contribution to a broader movement for societal equality. Included in this movement are Pickett and Wilkinson’s organization, the Equality Trust, and other national and international advocacy groups and policy initiatives, such as those pushing for increases to minimum wage or “living wage” levels.

It’s a work in progress, and adjustments could become necessary in some scenarios. Take outsourcing. What if a profitable company meets Wagemark’s standard within its own facilities, but not when taking into account the factory workers who produce the company’s product through a contractual arrangement?

“We can’t write a licence that prohibits explicitly all sorts of business activities,” says MacLeod. “But to be perfectly frank, I don’t think those kinds of businesses are going to be attracted to Wagemark initially.”

Some big American companies, on the other hand, have demonstrated a commitment to maintaining modest wage gaps relative to others in their industries since long before Wagemark. Costco is one frequently cited example. In the midst of the economic downturn, while competitors struggled and tightened belts, Costco raised employee salaries, which are over double minimum wage – yet the company has thrived. According to Businessweek, the company plans on expanding internationally, opening outlets in France, Spain, Japan, Taiwan and South Korea over the next five years.

But falling within Wagemark’s 8:1 pay ratio will be a huge challenge for big companies, more so in specific sectors that have a proportionately higher number of low-skilled, lower-paid workers. According to data compiled by Corporate Knights Capital – which looks at CEO compensation relative to a company’s average worker pay (as opposed to an average of the bottom 10 per cent) – the global average ratio is 133:1 and 113:1 for consumer discretionary and consumer staples, respectively.

At 139:1, Costco is above the global average, according to U.S. union federation AFL-CIO. But compared to Walmart, which comes in at 597:1, Costco still looks like a champion of the people. On the other hand, ratios for the high-skilled utilities and health care sectors are 57:1 and 53:1, respectively.

“We completely accept that in different industries it could be more difficult,” says MacLeod. “We’re starting with 8:1, and it’s our hope and intention over the next two years to bring on several thousand organizations. On the issue of how we evolve the standard, it’s a question we’ll have to pose to our membership, so stayed tuned.”

Already, Wagemark is preparing this fall to unveil its Tier 2 certification designed to appeal more to larger companies. The pay ratio standards would range from 9:1 to 30:1 depending on a company’s revenues. The higher the revenues the wider the allowable pay gap.

Small and medium-sized companies, meanwhile, continue to sign up to Wagemark. Mike Clark, co-owner of Bellwoods Brewery, doesn’t see the current standard too much of a burden. As one of the more than 20 companies that have so far joined, the brewery is aiming to have a pay gap of between 3:1 and 4:1 over the next few years. Today, it has 35 employees, but Clark has plans to expand. Complying with Wagemark, he says, shows employees they are being treated fairly and with respect, and helps retain them.

“It just makes me feel so good about the people that I’m working for and the fact that they’re conscious of building a team that’s going to progress together,” says Bellwoods staffer Kristi Porter.

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With the 1959 opening of the St. Lawrence Seaway linking Montreal’s ports to Lake Ontario, the lakes opened to the rest of the globe. Today, annual shipping exceeds 200 million net tonnes; almost a quarter of that travels to and from overseas ports.

As a result, the region is now the world’s fourth-largest economy. With a GDP of $4.7 trillion, the Great Lakes account for 28 per cent of combined Canadian and U.S. economic activity, according to a 2013 report from BMO Nesbitt Burns. Manufacturing is the top industry.

That makes the region particularly vulnerable to global economic volatility, but it also faces a more insidious risk: climate change. The symptoms – low water levels, extreme weather conditions and invasive species – threaten not only the Great Lakes, but also its businesses and people.

Lower lakes, lower revenues

Huron and Michigan’s levels have been below average for the past 14 years, and in January 2013 both lakes reached record lows. Ontario, Erie and Superior also face persistent low levels.

Gail Krantzberg, professor of civil engineering at McMaster University in Hamilton, Ontario, says climate change is part of the reason. “There’s less ice cover in winter, and you get evaporation in the winter months that is not compensated for by [rain] in the summer months. You also get snow packs that melt in the middle of winter, so there’s no spring meltwater, and that lowers levels even more.”

These conditions “are a direct threat to manufacturing in the Great Lakes,” says Ed Wolking, president of the Great Lakes Manufacturing Council in Detroit. He says they also challenge the $33.5 billion commercial navigation industry.

That’s because there is now less clearance at key transit points on the lakes, forcing ships to reduce the amount of cargo they carry. This is concerning in part because shipping is more fuel-efficient than rail and truck delivery per tonne of cargo.

The Lake Carriers’ Association (LCA) estimates for every inch of water drop, its 57 ships have to leave behind 8,000 tonnes of cargo – enough iron ore to produce steel for 6,000 cars. What’s more, “Vessels are reducing loads by an average of 15 per cent per trip to avoid scraping the bottoms of harbours and channels,” says the LCA.

Wolking adds, “A ship that would make 50 trips a year would incur extra costs of $2 million a year from operating at a depth shortfall of 24 inches. Consumers and manufacturers will pay for it in the end.”

Manufacturing operations also suffer. “If a [factory] has a near-shore water intake, [it could be] high and dry now,” says Stephen Carpenter, director of the Center for Limnology (a term for freshwater science) at the University of Wisconsin. “They’d have to build the pipe out further or deeper, and that costs money.”

Lower lake levels also threaten local tourism, which rakes in $12 billion annually, and fisheries, a $7 billion industry. A consortium of Georgian Bay mayors in Ontario says cottagers will have to spend $500 million to extend and repair docks and water systems. Marinas have to dig up sediment, or dredge, to maintain enough clearance for boats. And businesses that rely on a thriving waterfront suffer when harbours dry up.

Commercial and recreational fishers can’t go as close to shore as they used to, which reduces the types and number of fish they can catch. Those who risk it can damage their boats when bottoms hit shore.

Flooding the supply

Not only are the Great Lakes now chronically low, but when rainfall comes, too much comes down on water systems too quickly. In June 2012, about 10 inches of rain fell over northeastern Minnesota in less than 24 hours, causing more than $100 million in damage. Then, in July 2013, a record-breaking five inches fell on Toronto in seven hours, cutting power to 500,000 people.

According to reinsurer Munich Re, such extreme weather events aren’t going away. From 1980 to 2011, they became more frequent in the United States. Such storms cause massive flooding, and are exacerbated in major cities because asphalt surfaces don’t absorb water. Instead, rain must flow into storm drains, further overwhelming infrastructure. “That releases sewage back into the lakes,” says Krantzberg. “There’s economic burden for municipalities, households, businesses and insurance companies when basements get backed up with sewage, for example, or when entire bridges get washed away.”

And in rural areas, heavy rains wash soil and fertilizer into lakes. Trouble is, that runoff includes phosphorus, which boosts algal growth. Too much algae clogs water intakes, imbalances fish populations and irritates people’s skin. That drives away tourists, and challenges recreational and commercial fishers.

“Storm events are going to transport more nutrients into the lakes and lead to more algal bloom, coastal pollution and water quality problems,” says Carpenter. “That means the water drawn needs to be [more heavily] treated, which is expensive.”

In 2011, Lake Erie experienced its worst bloom in decades – it covered a fifth of the lake. Boats had to slow down when driving through the toxic, neon-green scum, reports news service EcoWatch.

Unwelcome guests

Climate change and carelessness have caused more than 180 non-native species to settle in the Great Lakes. “As the lakes warm, some species that couldn’t handle the deep cold waters now can,” says Krantzberg. And as global trade increases, so do the number of international ships and the number of foreign species hitching rides.

These species have caused declines in almost 46 per cent of local endangered plants and animals. One invader, the common reed, has grown so densely on shorelines that birds can’t nest and fish can’t move, says Mary Muter, chair of Sierra Club Ontario’s Great Lakes section.

And invasive fish and animals disrupt the food chain, meaning native species may not get enough to eat. Recreational and commercial fisheries suffer if their usual catch disappears.

“Salmon are valuable both for sport and commercial fishing, but the entire [Chinook salmon] fishery is now dwindling” in Lake Huron, says Carpenter. “To some extent that’s being replaced by inshore fishing of walleye and yellow perch, but that means the industry [has to] retool.”

Invaders can also cause problems for municipalities and manufacturers. Zebra mussels arrived in Lake St. Clair in the late 1980s via transoceanic ships. The crustaceans like to colonize intake pipes, clogging them. Controlling this costs $250 million each year, according to the University of Wisconsin. Worse, the U.S. Geological Survey estimates the mussels cause “billions in damage annually to boats, docks, hydroelectric systems and other vital infrastructure.”

And scientists are concerned about a potential invader: Asian carp. The carp make up 95 per cent of fish in some parts of the Illinois and Mississippi Rivers. They breed quickly and eat voraciously. Silver carp can leap as high as 10 feet out of the water when disturbed, damaging property and injuring people.

The carp haven’t yet reproduced in the Great Lakes system, but if they do, they could devastate native fish populations, and thus the combined $23 billion fishing and recreation boating industries. Recognizing that, in 2002 the U.S. Army Corps of Engineers built electronic barriers in the Chicago Area Waterway System to prevent migration of the carp from the Mississippi River to Lake Michigan.

Such initiatives aren’t cheap. The barrier cost $9 million to erect and $47 million to maintain in 2011. In total, the U.S. government has invested more than $200 million over four years in anti-carp measures. As part of that, in July 2013, the government will spend $51.2 million to upgrade existing barriers and construct new ones.

Completely dividing the two waterways could cost up to $9.5 billion, finds a 2012 report from the Great Lakes Commission and the Great Lakes and St. Lawrence Cities Initiative.

Solutions: mitigation, adaptation

The threats facing the Great Lakes magnify each other, so mitigation requires broad action. Slowing climate change should be an industry priority, says Carpenter. “Their livelihoods depend on the climate, so they should be activists in climate improvement.”

He recommends removing U.S. and Canadian biofuel subsidies. “It’s driven a huge increase in corn acreage, which is the most harmful crop for water quality,” he says. “Corn is not good at intercepting runoff, and the land sits vacant for nine months of the year. There’s a short line between the subsidy and harm to water resources.”

Agriculture can also stem fertilizer runoff to help reduce algal bloom. “Increase the amount of cover by year-round vegetation so we don’t have a lot of bare soil,” he suggests. “Use less phosphorus fertilizer.”

Saad Jasim, an environmental consultant and former director with the International Joint Commission (IJC), agrees. “If you used to put fertilizer down in September, but now the heavy rains come in September, wait another month because you don’t want to waste money,” he says.

Improving infrastructure can also help reduce severe storm damage and prevent sewage from getting into the lakes. “Our wastewater infrastructure isn’t designed for the 100-year storm, which is now happening a few times a year,” says Krantzberg. She says to adapt, municipalities should upsize pipes when it’s time for repairs. Cities can also redevelop brownfields and leave greenfields to absorb rainwater.

To compensate for impervious city surfaces, Krantzberg says local businesses can “use porous pavement, [construct] green roofs and put bioswales [grassy gutters that let water percolate down] on the sides of parking lots.”

Industry players should also track and manage their water impact. The Council of Great Lakes Industries is creating a region-specific water footprinting tool based on the Alliance for Water Stewardship model and set to launch in 2014.

To prevent new invaders, ships must follow water intake and discharge regulations. Ships are required to: take on water when floating high to avoid sucking bottom-feeders, minimize the amount of water drawn, treat water prior to discharge, and only discharge in designated areas.

To combat low lake levels, many industries have advocated dredging. But it can displace marine life and disrupt water flows. “From an environmental perspective, dredging is a pretty horrible activity,” says Muter.

Instead, she applauds the IJC’s April 2013 recommendation to install flow-reduction sills in the St. Clair River, saying the structures would both increase lake levels and protect fish habitats over the long term. The IJC proposed raising levels by 10 inches; Muter would prefer 20 inches. She adds there’s an outstanding agreement between the U.S. and Canada for 16 inches.

Sills, which are like speed bumps, would hold water back on Lake Huron. Muter estimates it would cost about $200 million. “It will take three years for the U.S. Army Corps of Engineers to come up with the analysis,” she says, and another year for governments to agree to and fund the project. “Within 10 years the water levels in Michigan, Huron and Georgian Bay can be restored.”

While some stakeholders may not be able to wait, Muter says that’s the “harsh reality when dealing with bi-national waters.” Plus, dredging can literally only go so far. If you install sills responsibly, she says, “you protect all Great Lakes and deal with 100 years of human alterations in the St. Clair.”

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