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Steve Brearton, Rob Gross and Kevin Ranney

Friday, February 25, 2005

For the second year in a row, Report on Business magazine has partnered with Jantzi Research Inc. to rank Canadian firms according to their corporate social responsibility performance. Jantzi is one of Canada's leading authorities on social investment and CSR issues. It provides a full range of social investment research and consulting services to institutional clients and financial professionals who integrate social and environmental criteria into their investment decisions. Jantzi does not provide consulting services to any of the companies in this ranking, though it does sell its database and provide investment or vendor-screening services to four of the listed companies: Citizens Bank, Great-West Life, National Bank and RBC Investments.

Here, we provide a straight-talk explanation of how to read and interpret the ranking.

How the firms were chosen

This year, we have increased the number of firms in the ranking to 109 from 67. Industries and firms were selected by Jantzi Research and Report on Business based on their importance to investors and consumers. A premium was placed on firms listed in the Report on Business Top 1000, which lists Canada's top firms by profits each year, and on the S&P/TSX Composite Index. Other companies, such as Mountain Equipment Co-op and Citizens Bank, have been included because of their reputation as CSR leaders in their respective sectors. We've also introduced some new industries this year, based on their presence in the stock portfolios and daily lives of Canadians. We will continue to add important industries to the rankings in the coming years.

How individual firms were evaluated

Jantzi's research process begins with a thorough examination of all publicly available information on the social and environmental performance of each company. This includes the companies' public documents, media sources, on-line databases, sources from government and NGOs, as well as direct correspondence with key stakeholders. Each company also receives a questionnaire on its CSR practices. For non-Canadian companies, Jantzi made use of research conducted by its partners in the SiRi Network, which comprises 11 socially responsible investment research firms in Europe, North America and Australia.

How the scoring works

Company rankings are based on scores in six areas: community and society, corporate governance, customers, employees, the environment and human rights. Each area contains indicators related to management systems, programs and performance, and each company is scored on between 55 and 100 indicators (see page 67). All indicators are scored, weighted and tallied to create totals within each of the six broad areas. The total is the weighted average of the score in each area. These final numeric scores are noted on our main charts (page 40).

Why firms in different industries can't be compared

Each industry has varying levels of exposure to different social and environmental issues. For instance, an oil and gas company has greater exposure to environmental issues than a software company, while retailers have greater exposure to customer issues than mining companies. As a result, it isn't meaningful to compare total company scores from industry to industry. It is, however, possible to compare scores across industries in certain areas in which the exposure is similar. For example, oil and gas companies and mining companies have similar exposure to community issues, so their scores in this area can be compared.

Why there is no overall average score

Scores in each sector are relative only to other firms in those industries. For instance, Alcan is a global leader in the mining industry, although it scored just 61--think of it as an A grade, not a D. However, not all firms that finished atop their industry are A-level performers. That's because some industries rate poorly overall on CSR. We've made this clear on the individual industry pages, which begin on page 46.

Why some well-known firms are not included

You'll notice that Burger King and Subway restaurants are not included in the fast-food category. That's because, without their co-operation, we couldn't generate enough information to fairly compare them with their peers. Few private firms are included in the survey because few are willing to disclose information about their social and environmental practices. No publicly traded firms were dropped due to lack of disclosure.

Multinationals operating in Canada

Most Canadian operations of international companies are inextricably linked to their international parents. For that reason, our evaluation is based on the performance of the foreign corporate entity. In fact, we found only one case, HSBC Bank of Canada, in which the Canadian subsidiary was autonomous, enough to be evaluated separately.

What's with all the different certifications? The business of certifying best CSR practices in different industries has become a global industry in itself--and an increasingly important yardstick for consumers. According to 2004 polling data produced for Environment Canada by GlobeScan, a public opinion and research firm, four in 10 Canadians look to certification labels on consumer packaging as their preferred indicator of CSR-friendly practices. The industry certifications cited on the industry write-ups represent meaningful measures of performance, unless otherwise noted.

Automotive

1 Toyota Canada Inc. Scarborough, Ont. n/a n/a 59 60 93 34 53 78 21

2 Volkswagen Canada Inc. Ajax, Ont. n/a n/a 56 41 54 54 61 64 33

3 Nissan Canada Inc. Mississauga n/a n/a 55 76 68 50 47 63 21

3 Honda Canada Inc. (Ma03) Toronto 14,096,800 4,600 55 62 74 48 36 74 21

5 Mazda Canada Inc. Scarborough, Ont. n/a n/a 54 42 86 57 37 69 21

5 Ford Motor Co. of Canada Ltd. (De04*) Oakville, Ont. 18,100,000 16,000 54 90 60 21 65 52 51

7 Hyundai Auto Canada Inc. Markham, Ont. n/a n/a 53 41 68 57 40 69 21

8 DaimlerChrysler Canada Inc. (De03) Windsor, Ont. 18,160,000 11,163 49 63 83 38 50 45 39

8 General Motors of Canada Ltd. (De03) Oshawa, Ont. 36,513,571 22,000 49 59 45 20 66 47 51

Banking

1 Citizens Bank of Canada (De03) Vancouver 80,786 n/a 68 79 97 50 61 48 n/s

1 Royal Bank of Canada(Oc04**) Toronto 25,204,000 62,566 68 79 76 45 70 73 n/s

3 Bank of Nova Scotia (Oc04) Toronto 16,497,000 43,928 67 71 72 56 72 55 n/s

4 Cdn. Imp. Bank of Commerce (Oc04) Toronto 16,705,000 37,281 65 79 69 41 67 66 n/s

5 Bank of Montreal (Oc04**)Toronto 13,208,000 33,593 61 67 68 46 65 56 n/s

5 National Bank of Canada (Oc04) Montreal 4,771,000 16,555 61 64 67 51 63 55 n/s

7 Toronto-Dominion Bank (Oc04***) Toronto 16,015,000 42,843 60 78 65 45 58 53 n/s

8 Laurentian Bank of Canada (Oc04**) Montreal 943,574 3,125 45 30 67 53 37 39 n/s

9 HSBC Bank Canada (De03) Vancouver 1,997,000 6,000 44 36 55 50 37 43 n/s

Fast Food

1 Starbucks Coffee Canada Inc. Toronto n/a n/a 53 67 59 35 43 67 52

2 McDonald's Restaurants of Canada Ltd. (De03) Toronto 777,9001 77,000 48 46 46 47 40 64 48

3 Cara Operations Ltd. (Ma03) Mississauga 1,133,202 39,000 43 45 58 46 38 54 14

4 Wendy's/Tim Hortons Restaurants of Canada Inc. (De03) Oakville, Ont. 934,8881 n/a 41 44 53 49 39 41 13

5 Mr. Submarine Ltd. Toronto n/a 2,534 39 48 55 40 32 37 18

6 Yum! Restaurants International (Canada) LP Vaughan, Ont. n/a n/a 38 42 39 37 34 53 22

Food and Drug Retailing

1 Sobeys Inc. (My04****) Stellarton, N.S. 11,046,800 75,000 51 56 84 52 35 62 8

1 Van Houtte Inc. (Ap04) Montreal 328,389 1,725 51 45 66 62 47 45 40

3 Shoppers Drug Mart Corp. (Ja04****) North York, Ont. 4,415,202 35,740 47 63 50 59 35 49 11

3 Loblaw Cos. Ltd. (Ja04****) Toronto 25,220,000 126,000 47 51 64 28 46 64 8

5 Jean Coutu Group (PJC) Inc. (My04****) Longueuil, Que. 3,027,1631 22,948 46 45 72 44 41 50 8

5 Great Atlantic & Pacific Tea Co. of Canada Ltd. Etobicoke, Ont. n/a n/a 46 42 68 51 43 45 8

7 Metro Inc.(Se04) Montreal 5,998,900 11,500 45 47 50 52 39 55 8

8 Canada Safeway Ltd. (Ja04) Calgary 4,043,4001 n/a 43 64 72 35 26 52 8

9 Alimentation Couche-Tard Inc. (Ap04****) Laval, Que. 5,872,394 34,000 40 39 52 48 35 44 8

Footwear and Apparel

1 Reebok Canada Inc. Aurora, Ont. n/a n/a 67 76 62 50 43 76 78

2 Adidas-Salomon Canada Ltd. Toronto n/a n/a 66 42 90 48 47 73 78

2 Gap (Canada) Toronto n/a n/a 66 63 54 50 47 65 83

4 Nike Canada Ltd. Thornhill, Ont. n/a n/a 62 82 58 48 39 57 75

5 Puma Canada Inc. Montreal n/a n/a 59 29 73 53 31 65 75

6 Gildan Activewear Inc. (Oc04) Ville St-Laurent, Que. 533,3681 7,400 54 48 72 50 28 61 60

Insurance

1 Sun Life Financial Inc. (De04)* Toronto 21,748,000 13,802 63 72 86 32 55 58 n/s

2 Manulife Financial Corp. (De03) Toronto 16,656,000 13,000 58 66 71 50 51 48 n/s

3 Great-West Lifeco Inc. (De03) Winnipeg 13,429,000 19,500 54 66 66 40 46 42 n/s

3 Industrial Alliance Ins. and Fin. Services Inc. (De03) Quebec City 3,351,700 2,467 54 49 78 50 45 44 n/s

5 SSQ, Life Insurance Co. Inc. (De03) Sainte-Foy, Que. 873,130 1,150 45 41 61 50 36 37 n/s

5 Atlantic Blue Cross Care Inc. (De03) Moncton 1,279,438 620 45 36 77 46 29 31 n/s

Media

1 Canadian Broadcasting Corp. (Ma04*) Toronto 508,618 7,422 61 83 61 63 55 72 n/s

2 Alliance Atlantis Communications Inc. (De03) Toronto 853,6002 580 55 60 54 63 52 47 n/s

2 Cogeco Inc./Cogeco Cable Inc. (Au04) Montreal 648,101 2,067 55 50 57 66 54 52 n/s

4 Rogers Communications Inc. (De03) Toronto 4,847,363 15,000 53 52 48 63 54 47 n/s

5 Bell Globemedia/ExpressVu (De04*, *****) Scarborough, Ont./Montreal 2,270,000 3,846 52 32 71 63 47 63 n/s

6 CanWest Global Communications Corp. (Au04) Winnipeg 2,113,034 9,270 50 73 60 48 30 48 n/s

7 Shaw Communications Inc. (Au04) Calgary 2,174,558 6,500 47 61 54 40 39 41 n/s

8 Quebecor Média Inc. (De03) Montreal 2,319,600 12,225 38 33 46 48 27 50 n/s

Mining

1 Alcan Inc.(De03) Montreal 13,640,0001 52,000 61 56 71 50 59 70 40

2 Cameco Corp. (De04*) Saskatoon 1,048,487 1,538 58 68 75 50 55 47 40

3 Falconbridge Ltd. (De04*) Toronto 3,070,0001 6,275 54 56 76 50 42 52 50

4 Teck Cominco Ltd. (De04*) Vancouver 3,428,000 7,225 52 64 73 50 43 39 40

4 Placer Dome Inc. (De03) Vancouver 1,802,0001 16,750 52 47 85 50 40 50 46

6 Noranda Inc.(De04*) Toronto 6,978,0001 15,000 50 40 88 50 46 45 50

7 Barrick Gold Corp. (De03) Toronto 2,006,0001 5,200 47 38 69 50 46 46 40

8 Inco Ltd. (De03) Toronto 2,474,0001 10,478 44 36 63 50 41 44 43

9 Fording Canadian Coal Trust (De04*) Calgary 1,167,500 2,775 38 23 56 50 33 46 40

10 Sherritt International Corp. (De03) Toronto 820,800 790 37 20 56 50 34 41 40

Oil and Gas

1 Suncor Energy Inc. (De04*) Calgary 8,618,000 4,261 72 87 82 50 63 76 50

2 Petro-Canada (De04*) Calgary 14,687,000 4,514 68 71 79 50 67 67 63

3 Nexen Inc. (De03) Calgary 3,476,000 2,875 62 57 80 50 60 60 70

4 Shell Canada Ltd. (De04*) Calgary 11,228,000 3,850 58 66 89 40 56 46 50

4 Talisman Energy Inc. (De03) Calgary 5,362,000 1,758 58 57 77 50 52 65 37

6 Imperial Oil Ltd. (De04*) Toronto 21,144,000 6,256 56 55 69 50 58 52 50

7 EnCana Corp. (De03) Calgary 10,216,0001 3,854 55 47 69 46 60 54 54

8 Husky Energy Inc. (De04*) Calgary 8,440,000 2,899 54 50 85 50 55 46 47

9 Canadian Natural Resources Ltd. (De03) Calgary 5,972,000 1,671 46 28 72 50 53 47 40

Paper and Forest Products

1 Tembec Inc.(Se04) Montreal 3,553,400 10,000 58 60 83 50 50 54 50

2 Norske Skog Canada (De04*) Vancouver 1,878,200 4,000 55 46 80 50 48 55 50

3 Norbord Inc. (De04*) Toronto 1,486,0001 6,500 53 46 83 50 47 49 50

4 Fraser Papers Inc. (De03) Stamford, Conn. 873,0001 3,850 52 40 74 50 50 54 50

4 Cascades Inc. (De03) Kingsey Falls, Que. 3,227,000 15,000 52 45 71 42 36 62 50

6 Domtar Inc. (De04*) Montreal 5,115,000 11,000 50 38 72 46 46 50 50

7 Abitibi-Consolidated Inc. (De04*) Montreal 5,751,000 16,000 48 35 68 50 51 49 36

7 Canfor Corp. (De03) Vancouver 2,095,500 5,478 48 28 75 50 45 50 50

9 West Fraser Timber Co. Ltd. (De03) Vancouver 1,508,147 4,000 45 31 71 50 39 44 50

10 International Forest Products Ltd. (De04*) Vancouver 795,997 3,000 37 28 49 50 31 38 36

Retailing

1 Mountain Equipment Co-op (De03) Vancouver 169,605 1,000 64 86 75 50 45 74 65

2 Hudson's Bay Co. (Ja04) Toronto 7,400,051 70,000 60 64 82 44 48 73 59

3 Ikea Canada LP Burlington, Ont. n/a n/a 58 37 55 54 39 78 76

4 Sears Canada Inc. (Ja05*) Toronto 6,230,500 47,973 52 74 72 43 43 63 39

4 Home Depot of Canada Inc. Toronto n/a n/a 52 50 62 48 46 76 42

6 Canadian Tire Corp. (Ja04) Toronto 6,552,800 45,000 50 66 54 48 57 51 37

7 Wal-Mart Canada Corp. Mississauga n/a n/a 49 66 72 39 26 56 46

8 Costco Wholesale Canada Ltd. (Au03) Ottawa 7,583,397 14,578 41 44 63 35 42 41 30

9 Forzani Group Ltd. (Fe04) Calgary 968,078 9,681 39 39 55 44 52 43 17

10 Rona Inc. (De03) Boucherville, Que. 2,710,268 15,000 36 37 62 50 34 38 17

Technology

1 Hewlett-Packard (Canada) Co. Mississauga n/a n/a 79 75 66 50 87 90 72

2 Dell Canada Inc. Toronto n/a n/a 69 58 74 43 71 81 66

3 IBM Canada Ltd. Markham, Ont. n/a n/a 66 63 56 48 75 78 51

4 Siemens Canada Ltd. (Se03) Mississauga 1,492,544 6,200 60 58 78 43 56 75 47

5 Xerox Canada Inc. (De03) North York, Ont. 1,216,722 4,100 59 85 60 50 68 69 25

6 Nokia Products Ltd. Ajax, Ont. n/a n/a 55 54 57 33 54 69 50

6 Celestica Inc. (De04*) Toronto 8,839,8001 40,000 55 53 69 50 52 62 47

8 Nortel Networks Corp. (De03) Brampton, Ont. 10,193,0001 35,160 52 46 65 50 57 65 21

9 General Electric Canada Inc. (De03) Mississauga 2,552,031 5,333 47 56 64 18 53 52 33

10 ATI Technologies Inc. (Au04) Markham, Ont. 1,996,7171 2,787 41 37 66 50 45 40 25

Telecom

1 Manitoba Telecom Services Inc. (De04*) Winnipeg 1,524,900 3,418 55 58 69 55 64 74 n/s

2 Bell Canada (De04*) Montreal 16,787,000 51,369 53 68 73 48 55 75 n/s

3 Aliant Inc. (De04*) Saint John 2,033,415 8,200 50 73 73 48 48 64 n/s

4 Telus Corp. (De03) Vancouver 7,146,000 24,719 47 72 69 45 43 57 n/s

5 Rogers Wireless Communications Inc. (De03) Toronto 2,282,203 2,360 43 47 57 59 46 49 n/s

6 Stratos Global Corp. (De04*) Bethesda, Md. 367,7531 600 38 28 74 59 30 45 n/s

7 Telesystem International Wireless Inc. (De03) Montreal 967,0851 3,334 34 28 61 48 28 45 n/s

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