automotive
The Industry
What it's doing right
The major auto manufacturers continue to develop models with higher fuel efficiency and lower emissions. Hybrid models that combine gasoline and battery power, such as the Toyota Prius, are already strong sellers. The automakers have also reduced manufacturing defects and improved performance and safety.
Much of the focus is now on what industry consultants such as J.D. Power and Associates call "active" safety (helping drivers avoid accidents), rather than "passive" safety (trying to protect them in accidents). Stricter environmental regulations in Europe and Japan have also prompted drastic changes in the dismantling and recycling of automobiles at the end of their life cycle.
Still needs work
Safety and the environment remain the big problem areas, and a lot of the concerns involve trucks and SUVs. Smaller cars are easier to handle and are thus better for avoiding accidents, yet manufacturers can't resist the higher profit margins on larger models. Big vehicles also guzzle more gas and emit more pollutants, but it is unlikely that North American automakers will begin large-scale production of greener vehicles any time soon.
Regulators still have to push the industry. California has led the way for decades, and in September, 2004, the state's Air Resources Board adopted more stringent emission regulations. But those standards are being challenged in court by the Alliance of Automobile Manufacturers, which represents nine major North American, Japanese and German automakers, including the Big Three, Toyota and Volkswagen.
The Bottom Line
The industry continues to focus on large, high-profit-margin vehicles and lacks a commitment to developing and introducing fuel-efficient alternatives.
CRITICAL ISSUE
Hybrid electric vehicles
Public demand and government regulation are slowly forcing automobile manufacturers to address the environmental impact of their vehicles, particularly their significant impact on climate change.
After reviewing its options, the consensus in the industry is that hydrogen fuel-cell vehicles will eventually replace the internal combustion engine.
The bad news: Fuel-cell technology won't be available in your auto showroom for at least 10 years. You have to wonder about that long-term prediction, though. Ford has already fallen short on a 2001 promise to improve overall fleet fuel economy by 25% by mid-decade, and it's hard to forget that GM is 25 years late on its plan to introduce a commercial electric vehicle by the end of the 1970s.
Meanwhile, several companies have introduced less-polluting hybrid vehicles powered by a combination of gasoline and electric batteries. As of December, 2004, four automotive manufacturers were selling seven hybrid vehicle models.
The recent introduction of SUV and pickup-truck hybrids by GM and Ford has sparked a debate over whether it is more environmentally beneficial to develop small hybrid models, as Honda and Toyota have done, or to develop hybrid SUVs and other large versions. Although the GM hybrids reduce fuel consumption by 20% and 27% for those models, they are still not the most fuel-efficient vehicles in their class--or even the most efficient pickups produced by GM.
Ford and GM argue that they are maximizing benefits by increasing fuel efficiency in the vehicle classes that have the largest environmental impact. But environmentalists say that argument is a non-starter, given the negligible improvement that a limited number of hybrids will have on overall fuel efficiency.
Toyota 59
Still the leader in hybrid engine technology (the Prius is the world's most popular hybrid vehicle). Also a leader in safety technologies, such as the headlights on the LX 470, which assist with cornering at night by adjusting to the vehicle's speed and turning angle. However, Toyota and six other companies, including the Big Three, were sued in the U.S. over allegations they were attempting to stop the shipment of lower-priced cars, originally exported to Canadian dealers, back to the U.S.
Volkswagen 56
Has one of the highest overall fuel efficiencies among automakers, primarily because of its focus on diesel-engine vehicles. At the same time, those engines are criticized because of their higher emissions of some pollutants.
Nissan 55
Greater-than-99% industrial recycling rate is the highest among the automotive manufacturers. Signed a technological co-operation agreement in 2002 with Toyota to help develop the Altima hybrid, which Nissan expects to begin producing commercially in 2006.
Honda 55
Best overall fuel efficiency of any major automaker. Already sells three hybrid vehicles, including the two-seat Insight hybrid, the most fuel-efficient vehicle to date. Promotes sustainable transportation through pilot projects with universities and transit authorities that encourage participants to use hybrid vehicles together with public transit and bicycles. A U.S. class-action lawsuit filed last year alleged that Honda's finance arm discriminated against African-Americans.
Mazda 54
The most energy-efficient automaker set a goal of meeting the Japan Automobile Recycling Act requirements of recycling 95% of each vehicle, from its 2003 model year onward.
Ford 54
Recently introduced two- and four-wheel-drive hybrid versions of its Escape SUV that are the most fuel-efficient vehicles in their class (they decrease fuel consumption by 30% and 35%, respectively). Has been embroiled in several safety lawsuits in recent years related to the Crown Victoria sedan and the tires on SUVs.
Hyundai 53
Has one of the highest overall fuel efficiencies because it produces smaller vehicles and has introduced seven electric car models, including the Accent and the Santa Fe SUV. Has developed, but has not introduced, Elantra and Verna hybrids.
DaimlerChrysler 49
As of early 2005, still had not introduced a hybrid vehicle for sale. The company is concentrating on yet-to-be-proved hydrogen-based fuel-cell technology in co-operation with Ballard Power Systems of Vancouver.
General Motors 49
Over the past five years, GM North America has reduced waste from all of its operations by more than half, through reduction and recycling. Introduced two new hybrid pickups, the Chevrolet Silverado and GMC Sierra, in the 2004 model year.
HOW THE INDUSTRY RATES OVERALL
Effort demonstrates progress, but work frequently incomplete
(Graeme Hussey)
banking
The Industry
What it's doing right
Canada's large banks have a relatively high percentage of women in senior management and on their boards. Banks continue to be leaders in corporate philanthropy, with extensive charitable donations programs and strong support for employee volunteer efforts.
Most banks have endorsed the United Nations Environment Programme's Statement by Financial Institutions on the Environment & Sustainable Development, which calls for environmental-management best practices and recognition of sustainable development as part of sound business management. Three of the Big Six domestic banks - Royal, CIBC and Scotiabank - have also adopted the Equator Principles, a set of voluntary social and environmental guidelines for financing projects in emerging markets that were drawn up by the private-sector arm of the World Bank.
Still needs work
Executive pay at most banks is high compared with other sectors. Also, all the major banks' brokerage arms have been formally disciplined by industry self-regulatory bodies in recent years. In some cases, they have been penalized by stock exchages and securities commissions as well. Last year, the Investment Dealers Association of Canada levied record penalties of $41.4 million against TD Waterhouse Canada, RBC
Dominion Securities and BMO Nesbitt Burns for helping speculators engage in rapid in-and-out trading in mutual funds from 2000 to 2003.
One key social and environmental exposure for the sector is loans to, and investments in, enterprises that cause social and environmental damage. Despite public pressure, banks are not required to publicly disclose detailed underwriting or financing information on individual loans and investments.
The Bottom Line
While environmental reporting has shown improvement in this sector, there is still work to be done on the reporting of the ethical, social and environmental impact of loans and investments. Whatís more, regulatory violations by bank brokerages are still common, and top bank executivesí pay is high. Although three banks have signed the Equator Principles, it remains unclear how that commitment will evolve into practice. On the bright side, banks remain leaders in diversity and corporate philanthropy.
Citizens Bank 68
Founded by Vancouverís VanCity credit union, the bank has the highest charitable donations as a percentage of pretax profits, and the highest percentage of women on its board (35%).
Royal Bank 68
Has the highest percentage of women in senior management (33%), and has adopted the Equator Principles. Received the highest score among the banks for diversity programs and performance, and has excellent reporting practices.
Bank of Nova Scotia 67
Scotia Capital, the bankís brokerage arm, ranks first for compliance with securities regulations among the major banks, and has excellent employee programs and benefits. The bank has the best overall customer record.
CIBC 65
Has a very strong overall record, having adopted the Equator Principles, tying for highest donations as a percentage of pretax profits among the major banks and providing excellent reporting. The one exception is customers, where CIBC ranks last.
Its customer privacy safeguards were questioned last year after it faxed confidential customer data to a wrong numberóa junkyard in West Virginia.
Bank of Montreal 61
Strong programs to encourage workplace diversity. However, its brokerage arm, BMO Nesbitt Burns, is tied with CIBCís brokerage operations for worst score for compliance with securities regulations.
National Bank 61
The only major Canadian bank that has not formally endorsed the United Nations Environment Programmeís Statement on the Environment & Sustainable Development. On the plus side, National has the second-highest percentage of women on its board (33%).
TD Bank 60
Tied for highest charitable donations as a percentage of pretax profits among the Big Six. Based on Jantzi Researchís valuation of executive pay packages, TD CEO Ed Clark received the highest total compensation among the banksí chief executives in fiscal 2003. As well, along with RBC and CIBC, TD still faces lawsuits from investors over the Enron fiasco, and the bank set aside $300 million last year to cover potential losses.
Laurentian Bank 45
Boasts the second-lowest CEO compensation in this group. Among the banks, however, Laurentian also has the lowest percentage of women on its board of directors (15%).
HSBC Bank Canada 44
The parent company has adopted the Equator Principles and was the worldís first major bank to commit to going carbon-neutral. A private company, HSBC Canada does not have the level of disclosure of its competitors.
COMPANIES THAT WERE EXCLUDED DUE TO LACK OF DISCLOSURE
Amex Bank of Canada
HOW THE INDUSTRY RATES OVERALL
Positive attitude; work much improved
(Christie Stephenson)
fast food
The Industry
What itís doing right
Known for their poor labour and environmental standards, fast-food giants are now providing healthier menu options. Whatís more, itemized nutritional information is featured on most company websites, and is often made available upon request in restaurants.
McDonaldís was a leader in partnering with experts to develop animal-welfare guidelines; Starbucks was one of the first among mainstream coffee chains to source fair-trade beans. The industry supports communities through cash and in-kind donations, and is cautiously pursuing measures designed to improve resource and waste management.
Still needs work
Most of the achievements mentioned above have been in reaction to public controversy. North American operations are lagging behind European counterparts in environmental management, sourcing fair-trade products and eliminating the use of genetically engineered ingredients, trans fats and other harmful ingredients. Canadian chains remain laggards in most areas of social responsibility.
People for the Ethical Treatment of Animals has resorted to targeting one fast-food chain at a time (at the moment, itís KFC) in an effort to raise the bar on animal welfare. Even companies that have committed to improving their practices, such as Yum! Brands and McDonaldís, are not doing enough to influence suppliers. More resources must be invested in training, monitoring and auditing the supply chain. Another key issue: Fast-food service employees enjoy minimal benefits, little job security and few opportunities for promotion.
The Bottom Line
Though notable efforts have been made to improve customer health and social responsibility, this industry is inherently unsustainable for our society and for the environment. Implicated in the obesity epidemic and cultural homogenization, the fast food sector has few rivals for generating controversy.
Starbucks 53
Donated a generous 2% of pretax profits to community initiatives last year. Although Starbucks has committed to buying certified fair-trade coffee, where local producers are guaranteed a living wage, critics are still pressuring the company to increase the quantity to 5% of all beans purchased. Recently demonstrated its commitment to diversity by signing the Calvert Womenís Principles, which promote gender equity and empowerment; at the moment, thereís only one woman on the 12-person board.
McDonaldís 48
Has made notable efforts to break from its dubious past image and now leads its fast-food peers. It was the first major fast-food company to develop animal-welfare principles, and the first to provide customers with nutritional information. Recently, it introduced a number of healthier menu options. Still, McDonaldís continues to generate unparalleled controversy over its use of trans fats (which have been linked to heart disease), marketing to children, unfettered global expansion and alleged anti-union stance.
Cara Operations 43
A recently privatized family-owned business that owns some of Canadaís favourite brands, including Harveyís, Swiss Chalet and Second Cup. Cara ranks tops in diversity, with women representing two of seven senior officers and two of nine directors of the board; however, without animal-welfare guidelines and policies governing its supply chain, Cara canít guarantee that its suppliers behave responsibly.
Wendyís/Tim Hortons 41
Owner of Tim Hortons, Wendyís International ranks high for its employee and customer relations. The target of an aggressive campaign by PETA, it adopted formal animal-welfare guidelines in 2001. Lacks progressive policies governing sustainability and suppliers and is below average on issues of human rights and the environment.
Mr. Submarine 39
A private Canadian company that eschews the aggressive franchising practices typical of its sector. Although Mr. Submarine has generated far less controversy than its peers, it has no progressive programs or policies that relate to employees, the environment or animal welfare.
Yum! Brands 38
Although the owner of KFC, Pizza Hut and Taco Bell has policies on animal welfare and supply-chain conduct, the company has been involved in prominent industry scandals. Taco Bell has been the target of nationwide boycotts for sourcing tomatoes picked by immigrant workers in Florida who earn on average $7,500 (U.S.) per year.
Meanwhile, video footage depicting a KFC poultry supplierís inhumane treatment of animals drew universal condemnation.
COMPANIES THAT WERE EXCLUDED DUE TO LACK OF DISCLOSURE
Burger King, Timothy's, Subway
HOW THE INDUSTRY RATES OVERALL
Poor concentration and lacking responsibility
(Heather Lang)
food and drug retailing
The Industry
What it's doing right
The industry is a significant donor to local food banks, and almost all companies have community giving initiatives. Some firms have also established modest green initiatives, such as the composting of organic waste, and programs designed to increase the energy efficiency of new stores. Most have responded to public concern over health and environmental issues by introducing selective green and "healthier eating" product lines.
Still needs work
All companies need to improve their public reporting and accountability, and employee relations have been a perennial problem. For grocery store employees, years of sustained downward pressure on wages, benefits and job security--not to mention the increasing use of part-time workers and "two-tier" collective agreements--mean that few employees entering the industry will share the pay and benefits that those close to retirement now have. Pressure to further reduce wages and benefits resulted in a bitter strike at Safeway in 2001, and a controversial deal between the union and management at Loblaw Cos. that allowed for lower wages and fewer benefits at the company's newly opened Real Canadian Superstores in Ontario. There is little evidence of any effort by retailers to establish basic labour standards or to monitor conditions at their supplier factories and farms. One company--Van Houtte--has taken a small step toward addressing these issues by selling a line of certified fair-trade coffee.
The Bottom Line
No company in this industry could be called a CSR leader. Basic public reporting on CSR is still weak, and labour rights and supply-chain issues still fail to register. Improving the treatment of employees remains the key challenge for this industry.
Sobeys 51
Consistently solid in most CSR areas compared with its peers, and rates highest for corporate governance and health and safety performance. Room for improvement in its diversity programs.
Van Houtte 51
Only company in the group to address some supply-chain issues, through its line of organic and fair-trade-certified coffees. A small portion of revenue from another line of coffees is donated to a project supporting small coffee producers in Honduras. Good labour relations compared with peers.
Shoppers Drug Mart 47
While programs for charitable donations and disclosure on charitable initiatives are strong relative to its industry peers, Shoppers is an average performer on most other CSR issues. Corporate governance practices are poor compared with industry counterparts.
Loblaw Cos. 47
An industry leader in environmental management and performs well above the industry average on employee relations. Has suffered from a number of consumer-related fines, including penalties for the false or misleading labelling of meat products.
Jean Coutu Group 46
The highest percentage of women on its board of directors and in senior management positions. Also rates highly for its corporate governance practices. Employee programs and benefits and environmental initiatives are mediocre compared with its peers.
Great Atlantic & Pacific Tea Co. (A&P) 46
Notable for the relatively high percentage of women on its board of directors and in senior management. The company has been fined repeatedly for health and safety infractions.
Metro Inc. 45
Notably poor performance in corporate governance, having a dual-class share structure, relatively high executive compensation and a relatively low proportion of independent directors on its board.
Safeway 43
Leads in public reporting on CSR issues, despite the fact it no longer publishes an environmental report. Scores poorly on employee relations because of acrimonious union relations and numerous settlements relating to alleged violations of labour laws.
Alimentation Couche-Tard 40
The laggard in the industry for disclosure on CSR issues. The company is relatively weak in the area of corporate governance and does not report having any environmental or health and safety initiatives in place.
COMPANIES THAT WERE EXCLUDED DUE TO LACK OF DISCLOSURE
Katz Group Canada
HOW THE INDUSTRY RATES OVERALL
Some improvement, but occasionally disruptive
(Laurie Uytterlinde Flood)
footwear and apparel
The Industry
What it's doing right
The industry reacted with denial, anger and disappointment after allegations of sweatshop abuses surfaced in the early 1990s. The six companies in this year's ranking can add acceptance to that list--acceptance of their responsibility for working conditions in the foreign factories that manufacture their products. To their credit, these firms are now trying to remedy the situation. In addition, the leading sports-shoe companies have begun to limit the use of toxic chemicals in the manufacturing process.
Still needs work
The working conditions of most foreign apparel and footwear workers is what really matters in this industry. The pressing issues: wages, working hours, freedom of association and collective bargaining. The way in which the industry deals with China, the world's largest exporter of footwear and apparel--and a place where workers with limited rights can toil up to 90 hours a week--will be one of the defining social responsibility challenges of the decade. Public reporting on factory audits also needs to improve, as most reports ignore such crucial information as auditing standards, factory locations and company initiatives to promote supplier compliance.
Three Canadian firms were not included in the ranking due to an almost complete lack of disclosure. Two of the three--Bata and Nygrd--failed to report on any programs or initiatives to improve working conditions or environmental impacts in their supply chain. The third, Roots Canada, has posted a code of labour standards for suppliers, and reports that it is developing a factory monitoring program, though no details are available.
The Bottom Line
Leading companies are finally developing a more mature approach to social responsibility. International firms need to focus on instituting their stated commitments to worker's rights and environmental stewardship overseas. Canadian-based companies must evolve from the social responsibility Stone Age.
Reebok 67
Last year became the first company to have its footwear factory monitoring program certified by the Fair Labor Association standards. Reebok and Adidas stand apart from the others for their environmental initiatives, among them the implementation of green management systems in supplier factories and reducing the environmental impact of transporting shoes over long distances by avoiding airplanes--which cause more pollution--and using ships.
Adidas-Salomon 66
Top marks for corporate governance and corporate employee practices.
Along with Nike and Reebok, Adidas-Salomon was a founding member of the Fair Labor Association, an initiative that monitors working conditions and reports factory audits.
Adidas has also promoted good environmental practices with its suppliers.
Gap 66
Produced its first social responsibility report last year, which detailed conditions in its factories and won praise for its unvarnished openness. Gap has adopted some of the industry's highest labour and ethics standards. But the company dragged its feet in settling a major lawsuit around sweatshops in the U.S. territory of Saipan. Women account for 30% of Gap's corporate directors and 40% of its senior executives.
Nike 62
Once a poster child for sweatshop scandals, the world's largest sportswear company has improved greatly. Nike expects to receive Fair Labor Association certification of its footwear factory monitoring program later this year, and underwrites programs for women and girls in developing countries where its products are made. Still, the company has issued retractions following protests from women's groups over its advertising campaigns.
Puma 59
Became the fourth major sports-shoe manufacturer to join the Fair Labor Association and adopt its workplace code of conduct and factory monitoring programs following a major sweatshop scandal in Mexico in 2003. The company has strong corporate governance policies and practices.
Gildan Activewear 54
North America's largest T-shirt manufacturer recently made peace with the Fair Labor Association, which threatened to turf Gildan if it failed to respect workers' rights.
Last December, Gildan offered a group of union supporters whom it had fired preferential hiring at a new sewing plant the company will open shortly. It has begun a major corporate governance overhaul, eliminating its dual-class share structure and appointing its first independent chairman.
COMPANIES THAT WERE EXCLUDED DUE TO LACK OF DISCLOSURE
Bata, Nygard, Roots Canada
HOW THE INDUSTRY RATES OVERALL
Effort demonstrates progress, but work frequently incomplete
(Ian Thomson)
insurance
The Industry
What it's doing right
Like the banks, most Canadian insurance companies provide comprehensive reporting on their charitable donations, corporate governance practices, and employee programs and benefits. However, again like the banks, their environmental reporting remains limited. Canadian insurers continue to feature both solid representation of women at the board level and employment equity programs that are generally strong.
Still needs work
A key area of exposure to ethical, social and environmental risk for insurance companies is their investment holdings, which could include businesses with low social or environmental standards. But insurance companies are not required to disclose information about investments that would enable stakeholders and consumers to judge their merits based on social and environmental criteria. Strangely, there has been little public or investor demand for disclosure of these risks.
Another area of concern is the public perception of the sector. Rising vehicle premiums combined with reduced coverage and record industry profits has consumers and politicians crying foul. Despite the widespread public outcry, a 2004 review by the federal Competition Bureau on possible abuses among property and vehicle insurers found no cause for complaint.
The Bottom Line
While the industry's social and environmental impact appears to be minimal, the level of exposure from investment holdings is unknown due to a lack of disclosure.
Sun Life 63
Has a mixed record on employment equity--within this sector, has the highest percentage of women on its board, but has none among its nine most senior executives. Tied with Great-West for highest level of donations as a percentage of pretax profit over the past three years.
Manulife 58
Earns high marks for employee practices, including the best work/life programs among insurers. However, it also has the highest CEO compensation, and no women in the ranks of its most senior executives. John Hancock, with which Manulife merged, has to contend with a number of lawsuits, among them a discrimination suit filed by a former agent who is gay.
Great-West Life 54
Has demonstrated an industry-leading level of community support through corporate donations. Only one of 21 board members is female. Subsidiary London Life is involved in an ongoing class-action suit in which homeowners were allegedly overcharged for closing out mortgages early. Many other banks and insurers were also named in the suit.
Industrial Alliance 54
Has both a share-purchase plan for employees and pays a bonus to all permanent non-management employees if profit targets are met. No women among its most senior executives. In late 2004, the firm settled a class-action lawsuit filed by home mortgage holders who were allegedly overcharged.
SSQ Financial Group 45
Nearly one in three positions in senior management is filled by a woman--the highest percentage in the sector. Although the company reports having an environmental policy, it does not report having any systems or programs in place to manage environmental issues and does not publicly report any environmental information.
Atlantic Blue Cross 45
Ranked last among companies for diversity initiatives. Last year, in the midst of an ongoing legal battle with a woman with multiple sclerosis, the firm stopped clawing back certain CPP benefits from long-term disability plans it administers for the province of New Brunswick.
HOW THE INDUSTRY RATES OVERALL
Effort demonstrates progress, but work frequently incomplete
(Christie Stephenson)
media
The Industry
What it's doing right
Media companies are generally good employers to their broadcast, print and cable workers. They're above average for programs and initiatives that encourage more representative work forces, and are also generally strong in employee education and development, as well as work/life balance initiatives. Most have strong community giving and charitable donations strategies in place.
Still needs work
Firms have done relatively little to address their environmental impact. Paper production is one of Canada's most polluting industries, and print media, especially newspapers, have been slow to examine "greener" paper or more innovative means of distributing content to reduce the estimated 12,000-plus tonnes of newsprint delivered to Canadians each week.
In a similar vein, media companies have done very little to reduce their energy consumption and contribution to climate change. Most companies could also publicly disclose far more about their CSR performance: Among all the companies in this group, only CanWest Global has produced a report on its community initiatives, and only CBC has posted its government-mandated employment equity report on its website.
The Bottom Line
Strong on employee issues, weak on environmental ones. Media companies should start turning the lens on themselves by reporting on their own CSR performance.
CBC 61
Publishes several detailed statements on CSR issues, including its advertising standards and environmental policies. CBC ranks first in diversity, health and safety management, and the environment. Employee relations have been strained recently, with four work stoppages in 51/2 years.
Alliance Atlantis 55
Scores relatively well on diversity and on wellness programs. Alliance is the only company in this industry that has a formal policy statement on community donations.
Cogeco 55
Ranks second for employee programs and benefits and is one of the few companies in the group to have an environmental policy. That policy extends to employees as well as suppliers and subcontractors, and commits the firm to doing business without unduly exploiting the environment.
Rogers 53
Unique among its peers for creating a barrier-free work environment--all facilities are accessible to people with disabilities, and initiatives are in place to attract and retain people with disabilities. Corporate governance practices lag behind most peers, however. And Rogers's CSR record is further tarnished by its failure to ensure that companies contracted to sell Rogers Cable products door-to-door paid their employees (who said they wore Rogers badges and were trained by Rogers staff) back wages owed to them.
Bell Globemedia/ExpressVu 52
One of the few in the industry to have, through its parent company (BCE), a formal environment policy in place and to report on environmental performance and initiatives. On the other hand, Bell Globemedia's disclosure on its employee programs and practices lags behind that of its peers. Also of concern is the number of times its broadcast holdings have breached the Canadian Association of Broadcasters' voluntary code of ethics.
CanWest Global 50
Above-average community performance and the only company in the industry to have published a separate community report. Relations with employees have suffered recently, as the company has moved to a more unified approach to news reporting, including the imposition of a national editorial policy that some journalists view as limiting freedom of speech. These moves have prompted byline strikes at some papers.
Shaw 47
A laggard in CSR disclosure whose diversity initiatives are weak. Shaw has the dubious distinction of being the only company in this category that does not report having any environmental policies or programs.
Quebecor Média 38
Stands out for its poor CSR disclosure practices and relatively weak community, employee and corporate governance performance. A recent bitter work dispute at Vidéotron, now a Quebecor subsidiary, started as a lockout, then became a strike.
It featured strike-breakers and vandalism that disrupted cable service to customers.
HOW THE INDUSTRY RATES OVERALL
Effort demonstrates progress, but work frequently incomplete
(Laurie Uytterlinde Flood)
mining
The Industry
What it's doing right
"The mining industry is facing growing challenges to its social licence to operate." The majority of large mining companies have responded to those words from the Mining Association of Canada by improving CSR reporting. Most also recognize, at least in principle, that local communities are key stakeholders who ought to be consulted.
The growth of metals recycling is another promising trend, from aluminum cans to batteries and electronics. Although "recycled feed" still makes up a small fraction of total production, companies like Alcan and Noranda are increasingly important players in reprocessing waste, and reducing their dependence on raw materials extracted from the ground.
Still needs work
Mining companies remain among Canada's leading polluters. Efforts to reduce emissions, cut back on greenhouse gases and limit toxic discharges could be stepped up. Ways must also be found to minimize both the toxic aftereffects of acid drainage from closed mines, and the social trauma of shutting down a town's primary employer once a mine closes. Although many firms operate overseas, where environmental and labour standards generally aren't as high as Canada's, they must adhere to the same stringent performance standards as they do here.
Most importantly, the industry needs to become far more consistent in community consultation and benefits sharing. In the process, it should address power imbalances faced by affected communities by, for instance, providing them with funding to hire legal experts to research a project's impact.
The Bottom Line
Sustainable mining is practically an oxymoron. The industry should continue to raise the bar on environmental performance and do more to put principle into practice in its relations with affected communities.
CRITICAL ISSUE
Affected Communities
The way mining companies treat communities affected by their operations has generated arguably more confusion - and conflict - than any other CSR issue. Each stage of a mining project - exploration, construction, production, closure and remediation - carries significant opportunities and risks for nearby communities.
When a mining firm initiates a new project, locals are often divided over the perceived economic benefits and potential environmental harm. In the case of aboriginal communities, mine development may also undermine traditional land use.
Companies that mess up in this initial stage often pay the price for years. Noranda is a case in point. Soon after it announced plans in 1995 to build a Chilean aluminum plant and six dams to feed hydroelectric plants, the project faced strong opposition. Residents of Patagonia feared the Alumysa development would adversely affect the environment and such local industries as ecotourism and salmon farming. Noranda put the project on hold indefinitely after eight years of opposition.
Getting a mine into commercial production in a fair and timely manner often means ensuring that local communities receive a reasonable share of the economic benefits. To get its Raglan mine in northern Quebec into operation, Falconbridge committed to profit sharing and hiring at least 20% of the mine's workforce from local Inuit communities.
Mining operations risk leaving communities with contaminated soil, lower property values and residents with chronic health problems. Placer Dome still faces controversy over the operations of Marcopper Mining Corp. in the Philippines, which it partly owned and managed until 1997. The cleanup of tailings from a major spill in 1996 has not been completed, and according to a company-commissioned assessment, a siltation dam and tailings impoundment are in danger of collapsing, which would cause further damage.
All mines eventually close, but some extraction companies have softened the blow by providing transitional support to those dependent on their operations. Ten years before the closing of its Sullivan Mine in Kimberley, B.C., Teck Cominco formed a public liaison committee to consult with the town; it later provided land and financial support for golf courses and a miningÊmuseum to help the community develop its tourism and retirement industries.
Alcan 61
Continues to be recognized internationally as a CSR leader. Alcan is a major processor and recycler of aluminum, though the company's record is blemished by numerous workplace fatalities over the past five years.
It faces opposition in Orissa, India, where its 45%-owned Utkal Project includes plans to construct a mine and refinery that will displace 147 families.
Cameco 58
Progressive employment and economic development initiatives with the aboriginal communities living around its uranium mining operations in northern Saskatchewan. And the fate of nuclear waste remains a stewardship issue for the world's largest uranium miner.
Falconbridge 54
Has strong relations with aboriginal and Inuit communities in Canada through benefit-sharing agreements. Bitter strikes at its Sudbury operations in Ontario suggest that labour relations could be improved. Through environmental programs, the company is working hard to meet emission-reduction targets.
Teck Cominco 52
Has a good record in benefits sharing with local communities, including an agreement with Inuit communities in Alaska and company-sponsored transition committees for communities facing mine closures in B.C. Still, has a bad name with U.S. environmentalists after decades of cross-border pollution.
Placer Dome 52
Has a benefits-sharing agreement with aboriginal communities in Northern Ontario, and is making a positive contribution to the fight against HIV/AIDS in Africa. Placer Dome has adopted a health and safety charter in response to its horrendous workplace safety record (over 30 fatalities and $1.6 million in fines since 1999). The company still faces claims for compensation after a major tailings spill in the Philippines in 1996, and cleanup has still not been completed.
Noranda 50
Scores well for its corporate governance practices and charitable donations.
Noranda has also provided assistance to former employees of recently closed mines and smelters. The company has racked up a number of fines and convictions for environmental and health and safety infractions in the U.S. in recent years.
Barrick Gold 47
Has an HIV/AIDS prevention program at its African operations, and signed on to a new international cyanide management code last year. Its public reporting on environmental issues is good, but community relations need more work, including the resolution of ongoing tensions surrounding its gold mining projects in Tanzania and Australia.
Inco 44
Extensive public reporting on CSR issues, but remains one of the largest polluters in the Canadian mining sector despite efforts to improve. The company has finally established good relations with aboriginal communities at Voisey's Bay in Labrador, although community relations are strained at nickel projects in New Caledonia and Guatemala.
Fording Canadian Coal Trust 38
Provides little reporting on environmental, health and safety, and community issues. Fording's new Cheviot coal mine on the border of Jasper National Park, a joint venture with Teck Cominco, continues to face legal challenges from environmentalists.
Sherritt International 37
Silence on social responsibility issues is deafening, although shareholder democracy has improved since Sherritt decided to dump its dual-class voting structure.
HOW THE INDUSTRY RATES OVERALL
Some improvement, but occasionally disruptive
(Ian Thomson)
oil and gas
The Industry
What it's doing right
Extracting, refining and burning oil and gas damage the environment--there's no avoiding that. The process often leads to conflict with surrounding communities as well. Despite all that, Canadian energy companies are leaders in addressing social and environmental concerns. The Canadian Association of Petroleum Producers, requires members to report annual environmental, health, safety and socioeconomic data to an independent third-party analyst. Most producers also voluntarily track their greenhouse gas emissions.
There is progress on other fronts as well. Time lost due to injuries hit an all-time low in 2003. Suncor, Nexen, Shell and Petro-Canada are investing in alternative energy sources. Canadian producers are also leaders in consulting with indigenous peoples. For the $7-billion Mackenzie Valley pipeline, Imperial Oil and Shell Canada have formed a consortium with local groups, giving them up to a one-third stake in the project.
Still needs work
Conventional oil and gas reserves in the Western Canada Sedimentary Basin are waning, so producers are looking to the Far North, the oil sands of Northern Alberta and offshore British Columbia to sustain or increase output. There are unique social and environmental risks in each of these areas. Canadian companies with overseas operations in Colombia, the Middle East and West Africa are also vulnerable to public backlash over environmental and human rights issues.
The Bottom Line
As demand grows, producers will migrate to where new supplies are available: the oil sands, the Arctic tundra and nations led by dictators. Global warming is a critical issue, and companies should help speed the shift to alternative and renewable energy sources.
CRITICAL ISSUE
The Oil Sands
Production in Alberta's oil sands has grown remarkably over the past several years, and that growth will continue. There are more than 40 major projects either planned or under way, and total output is forecast to reach 1.8 million barrels of oil per day by 2010, up from an average of 920,000 barrels per day in 2003.
From both a social and environmental perspective, oil sands development has some advantages. Production is relatively concentrated in a remote region, rather than spread over more densely populated areas. Alberta's north is also free of the serious human rights issues facing companies working in zones of conflict such as Colombia and the Ivory Coast, or in undemocratic countries like Syria and Libya. And while aboriginal people have often suffered from the impact of resource extraction, oil sands development - and the economic benefits it brings - has generally been welcomed by local aboriginal communities.
Still, companies must use large quantities of natural gas and other fuels to separate oil from sand. Technological progress is helping somewhat - Suncor, which derives most of its revenue from oil sands production, has reduced its greenhouse gas emissions by 17% over the past three years. Further innovation and Kyoto Protocol requirements will likely spur other companies to improve their performance as well.
Suncor 72
A world leader in investing in renewable energy. In its most recent renewable energy project, Suncor and joint-venture partners began producing electricity from an Albeta wind power project. The green energy generated is expected to save the equivalent of 82,000 tonnes of carbon-dioxide emissions per year--equal to taking about 12,000 vehicles off the road for a year. On the negative side, Suncor was fined $325,000 for the death of a worker in 2003 at its Sarnia, Ont., refinery, despite aggressive efforts to improve safety.
Petro-Canada 68
Has three women on its board of directors--the most among the major producers--and scores well across the full range of CSR issues. The company's record was tarnished by two oil spills from its Terra Nova oil field off the coast of Newfoundland in late 2004.
Nexen 62
Emerged as a Canadian CSR pioneer in 1997 by helping to develop the International Code of Ethics for Canadian Business. The company's commitment to social and environmental issues will soon be tested as it expands production in West Africa and begins development of its Long Lake oil sands project in Alberta. Nexen also has a poor record when it comes to flaring and venting solution gas.
Shell Canada 58
Has an extremely poor environmental compliance record and has been ordered to pay more than $650,000 for various environmental transgressions over the past five years. Still, Shell has developed impressive environmental management and reporting systems.
Talisman 58
Sold its interests in the Sudan in 2003, but is still suffering the fallout of a lawsuit filed in the U.S. alleging that Talisman and Sudan's government collaborated in an ethnic cleansing campaign. The company denies the allegations and claims it worked to promote peace and development. Now has some of the strongest human rights policies and management systems in the industry, plus a good environmental and reporting record.
Imperial Oil 56
Has a strong record for containing greenhouse gases--only EnCana and Talisman have lower emissions per unit of output. Imperial has also performed well in health and safety. However, the company lags in social and environmental reporting, and continues to resist the province of Alberta's efforts to make it clean up the site of a former refinery.
EnCana 55
Boasts the lowest greenhouse gas emissions per unit of production of any oil and gas company in this ranking. Still, the company loses marks in the environmental category, as well as in community and indigenous relations due to its interests in Ecuador, where it helped build a pipeline through areas of a protected tropical rain forest. The company is now trying to sell those interests, and its ranking will rise when it does.
Husky Energy 54
The only major integrated oil and gas company, aside from unranked PetroKazakhstan, that does not release annual social and environmental reports. Husky also has the second-highest level of greenhouse gas emissions per unit of production in the industry, and no women among its 13 senior executives and officers.
Canadian Natural Resources 46
Despite working in Angola and the Ivory Coast, provides almost no reporting on its human rights policies or other social and environmental concerns.
In Alberta, the company flares and vents more solution gas than any other producer.
HOW THE INDUSTRY RATES OVERALL
Effort demonstrates progress, but work frequently incomplete
(Ian Bragg)
paper and forest products
The Industry
What it's doing right
The industry recognizes the need to manage forests under its care in a more sustainable manner. As a result, certification for best practices has spread to more firms in the sector and is being extended to multiple stages of the life cycles of products.
Companies are also becoming increasingly involved in broad-based conservation initiatives. Since January, 2000, Canfor, NorskeCanada and others have been involved in the Coast Forest Conservation Initiative, an attempt by forest companies and environmental groups to collaborate on a model for the conservation and management of coastal forests in British Columbia.
The industry has had success reducing greenhouse gas emissions, primarily through improved manufacturing processes. Between 1990 and 2000, as industry output grew by 21%, it achieved an overall decrease in greenhouse gas emissions of 22%.
Still needs work
Consultation at the community level is still a problem. Only Tembec has formal consultation processes, and benefits-sharing agreements are the exception rather than the rule. Disputes with First Nations communities are all too common.
Emissions from pulp mills and manufacturing operations continue to be a problem. Some sawmills still operate a type of wood residue burner that was scheduled to be phased out in B.C. in 1998; that deadline was extended to December, 2007. And finally, a number of firms that are starting ventures in such places as China have no policies, systems or programs in place to manage human rights issues.
The Bottom Line
While progress has been made, without a universally accepted standard it's hard to predict how certification will contribute to the development of a more sustainable industry.
CRITICAL ISSUE
Forest Management Certification
Early in 2002, the Forest Products Association of Canada entrenched forest management certification as a condition of membership. There are three competing forestry certification systems operating in North America: the Canadian Standards Association's (CSA) Sustainable Forest Management standard; the Sustainable Forestry Initiative (SFI) standards; and the Forest Stewardship Council (FSC) standards. All three claim to be performance-based and to provide third-party auditing, certified product labelling, multistakeholder involvement and chain-of-custody procedures. So which system is the best?
Currently, FSC is the only standard that is broadly supported by conservation groups, and the preferred standard of major retailers like Home Depot and Ikea. A 2003 report commissioned by Forest Ethics, Greenpeace and Sierra Club of Canada concluded that, of the three certification systems in North America, only FSC "represents a viable system that delivers positive results on the ground and in the communities where it matters most." What's more, a 2004 study conducted by non-governmental organization Forests and the European Union Resource Network states that forest management certification schemes must be performance-based, rather than systems-based, and claims that FSC alone fulfills this criterion.
The U.K. Environment Ministry announced in November, 2004, that of five forest certification programs it assessed, only the FSC and CSA standards provide both assurance of legal harvesting and sustainable forest management. It also stated that the SFI standard ensures that certified forests meet U.K. government requirements for sustainable timber, but not its chain-of-custody system.
While the goal of certification standards is to put in place sustainable systems, the existence of competing schemes is a significant problem. It has created confusion among consumers and retailers, and continues to fuel an unproductive debate between non-governmental organizations, companies and other stakeholders over which standard is the best. The sum effect is to undermine the industry's efforts to improve its image and manage its impact on the environment and communities.
Tembec 58
Continues to demonstrate a strong commitment to CSR and has elected to obtain Forest Stewardship Council (FSC) certification for all forests under its care by the end of 2005. In December, 2003, along with Domtar, it became a founding member of the Boreal Leadership Council, whose goal is to "sustain the ecological and cultural integrity of the Canadian boreal forest region, in perpetuity." Still, Tembec has been unable to resolve ongoing effluent treatment problems at its mill in Temiscaming, Que.
NorskeCanada 55
Has not had a worker fatality in the past five years, and has not been convicted or penalized for occupational health and safety or environmental violations.
Norbord 53
Formerly Nexfor, a perennially strong performer, the company ranks first for corporate governance. Two significant (and uncharacteristic) environmental penalties at U.S. mills in 2003 had a negative impact on the company's environmental score.
Fraser Papers 52
Former subsidiary of Nexfor has the highest percentage of women on its board of directors. The burning question: Will it adopt its former parent's commitment to CSR?
Cascades 52
A significant provider of recycling services, and involved in alternative energy production. In the coming years, the firm's unsystematic approach to environmental management and reporting may see it fall behind the industry's leaders.
Domtar 50
In November, 2003, the company announced that it intends to pursue FSC certification of all its forest and manufacturing operations. Its record is blemished by a legacy of contaminated sites, most of which it no longer owns.
Abitibi-Consolidated 48
The largest collector and recycler of old newspapers and magazines in North America, and the world's largest newspaper recycler. Remains embroiled in a dispute with the Grassy Narrows First Nation over the impact of its logging activities in Northern Ontario.
Canfor 48
Has the lowest lost-time injury rates in this group over the past three years. Canfor's diversity record is mixed: It has three women among its senior executives, but has implemented almost no formal programs to encourage the advancement of women, visible minorities and other under-represented groups.
West Fraser 45
Has an employment equity policy but has implemented almost no formal programs to encourage the advancement of women, visible minorities and other under-represented groups.
Interfor 37
Scores poorly in almost every major category, in part due to lack of disclosure. The company's record with respect to working with First Nations is mixed. It has several partnership agreements in place, but in July, 2003, the Tla-o-qui-aht First Nations issued a "notice of eviction" to Interfor, ordering the company to leave its traditional territory in B.C.'s Clayoquot Sound.
HOW THE INDUSTRY RATES OVERALL
Effort demonstrates progress, but work frequently incomplete
(Steve Brearton, Rob Gross and Kevin Ranney)
retailing
The Industry
What it's doing right
In the wake of alarming reports about children stitching soccer balls in Pakistan and young women toiling for long hours at sewing machines in unsafe factories in China, the conduct of suppliers has become a touchy issue for retailers. Leading chains have responded by making an effort to adopt labour standards for their suppliers and monitor their compliance.
Some retailers also focus on the environment, favoring suppliers that practise sustainable forestry, minimize waste and limit other harmful practices. In general, women are better represented on retailers' boards of directors and in senior management than they are in other industries.
Still needs work
Despite some progress on labour rights and supply-chain issues, most of the companies in this group need to increase accountability and improve public reporting. The industry has a lower percentage of unionized employees and a higher proportion of part-timers than in most sectors, so many workers are excluded from benefit programs.
Environmental initiatives also need more attention. Many retailers recycle waste from stores and support community initiatives, but greenhouse gas emissions could be cut by improving the transport of merchandise by, for instance, moving goods by sea, rather than air, and by heating and powering stores with greener technologies. On the customer front, some companies have been caught using deceptive marketing practices.
The Bottom Line
Leading retailers are forging ahead with green sourcing, green power and green transportation initiatives. Sweatshops still need greater attention from all companies, especially as China becomes the source for an increasing proportion of consumer goods.
Mountain Equipment Co-op 64
Best known for sustainable building designs, green suppliers and annual donations to environmental initiatives and wilderness conservation.
Monitoring and reporting on labour issues in its suppliers' factories exceeds all others on this list. A CSR leader. Could the high proportion of women directors and senior managers be a factor?
Hudson's Bay 60
Monitors labour conditions in factories of suppliers, though public reporting could be better. Works with department stores internationally to develop an expanded factory monitoring system. Has also set clearly defined environmental and health and safety targets for stores and its transportation network. Strong corporate governance and employee practices.
Ikea 58
Impressive CSR programs and reporting, especially considering it's a private company. Sets environmental and labour standards for suppliers. Promotes sustainable forestry and green transportation throughout its supply chain, and contributes to the elimination of child labour through its purchasing practices. Ikea is a founding member of the Business Leaders Initiative on Climate Change.
Sears Canada 52
Well-developed charitable and community giving program, though not as strong in the monitoring of, and reporting on, supply factories. Marks off for a combined chairman and CEO. In January, the federal Competition Tribunal ruled that Sears Canada had misled consumers with deceptive marketing practices in 1999 and had violated the Competition Act.
Home Depot 52
Promotes sustainable forestry by avoiding suppliers that log ecologically sensitive forests and, increasingly, by purchasing wood products certified as environmentally friendly. Improvements needed in monitoring and reporting on labour practices in its supply chain. Good employee benefits and programs, including initiatives to promote employee volunteerism and charitable giving.
Canadian Tire 50
Women well represented at senior levels. Good benefits and programs for corporate employees, but most retail store staff are employed by individual dealers.
Poor corporate governance marks for multiple-voting share structure. Started to monitor working conditions in suppliers' factories this year.
Wal-Mart 49
Monitors working conditions in overseas supply factories, following many sweatshop labour scandals, though reporting could be improved. Embroiled in several U.S. class-action lawsuits and legal disputes over alleged gender discrimination and unpaid overtime.
Costco 41
Strong labour relations record and good employee programs, but very little reporting on environmental or supply-chain issues.
Forzani 39
Employee benefits include flex time, subsidized daycare and profit sharing.
However, last year Forzani paid a record $1.7-million settlement after a Competition Bureau investigation found that the company had engaged in deceptive marketing practices.
Needs better programs for environmental and supply-chain issues.
Rona 36
Fairly good union relations, but has no reporting on formal programs to manage environmental and supply-chain issues.
HOW THE INDUSTRY RATES OVERALL
Effort demonstrates progress, but work frequently incomplete
(Ian Thomson)
The Industry
What it's doing right
The manufacture and use of tech equipment often involves large amounts of energy and water, and hundreds of hazardous substances. Responsibly disposing of waste and old equipment can be very difficult. Fortunately, the multinationals that top this group are global leaders in environmental stewardship and in reporting. Hewlett-Packard, in particular, is working to minimize environmental damage at all stages of its products' life cycles.
Most tech firms have strong labour practices because of intense competition for employees, but this competition has led to increased outsourcing abroad in countries where the companies' own head-office labour practices don't apply.
Still needs work
Many large tech companies have exposure to human rights issues through overseas suppliers, and only a few industry leaders have addressed this concern. A January, 2004, report by the Catholic Agency for Overseas Development prompted the drafting of the Electronic Industry Code of Conduct. Few companies have signed on to the EICC, which itself fell short of expectations.
Canadian companies, such as Nortel, Celestica and ATI, are conspicuous by their presence at or near the bottom of this industry ranking. Nortel, in particular, continues to suffer from the fallout of regulatory misdeeds.
The Bottom Line
The best companies in the tech sector are global leaders in environmental stewardship and reporting on corporate social responsibility issues. The laggards, however, are far, far behind.
CRITICAL ISSUE
Electronic Industry Code of Conduct
In October, 2004, eight electronics companies developed the Electronic Industry Code of Conduct, which outlines commitments related to labour and employment, health and safety, ethics and protection of the environment for the firms and their suppliers. It was developed in response to Clean Up Your Computer: Working Conditions in the Electronic Sector, published in January, 2004, by the Catholic Agency for Overseas Development (CAFOD).
The CAFOD report was critical of the labour conditions at Dell, Hewlett-Packard and IBM manufacturing and supplier sites. Among other things, it reported that Chinese workers were spending up to 11 hours a day testing monitors in front of flashing screens.
Celestica, Dell, HP and IBM were all original signatories to the code, and although it's an important step for the industry, it falls short of the expectations set by CAFOD--specifically, the lack of detail on how change will occur. CAFOD also cited the failure of companies to support workers' rights to join an independent trade union and bargain collectively (experience from the garment industry shows that an effective union can have the greatest impact on working conditions). The code also demands compliance with local laws, which are frequently less stringent than international standards. If public campaigns against garment manufacturers are any indication, the electronics industry will have to go beyond legal compliance to ensure customer approval and achieve meaningful improvements.
Hewlett-Packard 79
A world leader in developing systems to measure and reduce the environmental impact of products and processes. Has developed criteria to measure its suppliers' performance in such areas as the environment and health and labour practices. HP will soon require suppliers to report annually on compliance.
A strong contingent of women on the board and in senior management. Signed on to the Electronic Industry Code of Conduct. Policies on suppliers' labour practices still fall short of those of leaders in the footwear and apparel industries.
Dell 69
Has an international program in place to take back and disassemble its used products. Most new products adhere to the U.S. Environmental Protection Agency's Energy Star requirements. Signed on to the Electronic Industry Code of Conduct. In 2003, Dell returned some customer service calls to U.S.-based operators from Indian call centres, following complaints of long wait times and heavily accented English.
IBM 66
Products are designed to be upgraded, thus extending their life. Also, many products are reused and recycled. Signed on to the Electronic Industry Code of Conduct. Still in the process of remedying a chemical spill first discovered in 1979 in Endicott, N.Y.
Siemens 60
Publishes a detailed annual CSR report on citizenship and the environment. Also has comprehensive policies and programs in place to promote the advancement of women and minorities. Progress marred by complaints of sexual discrimination at a plant in Virginia.
Xerox 59
Has the highest level of charitable giving in the industry, and received the top score for waste management. In 2002, Xerox treated 97% of its hazardous waste through recycling, treatment or fuel blending. In the U.S., the firm faces several race discrimination lawsuits, including one for allegedly denying minority workers promotions and lucrative sales territories.
Nokia 55
Strong supply-chain management program to reduce the environmental impact of mobile phones. Unfortunately, supply-chain management of labour practices is not as strong, and has not signed on to the Electronic Industry Code of Conduct.
Celestica 55
Signed on to the Electronic Industry Code of Conduct, but ranks among the worst in the group for environmental reporting.
Nortel Networks 52
Has implemented employment equity and workplace harassment policies in all operations. Also, launched a program in 1980 to encourage subcontracting to minority- and women-owned businesses. Has been plagued by controversies relating to the restatement of its financial results. The cost of those restatements: $115 million (U.S.) to date.
General Electric 47
Environmental reporting is among the best in the group--every week, each GE facility completes an environmental and health and safety checklist. Audits suppliers as well. Health and safety record is the worst in the industry. Company also has the highest environmental penalty total in the group.
ATI Technologies 41
Scores poorly on corporate governance. Share dilution rate from the company stock option plan is the highest in this group. Chairman K.Y. Ho has been accused by the Ontario Securities Commission of avoiding losses by selling shares ahead of a profit warning in 2000. Also, ATI recently settled U.S. shareholder class-action lawsuits.
HOW THE INDUSTRY RATES OVERALL
Positive attitude; work much improved
(Graeme Hussey)
telecom
The Industry
What it's doing right The telecom industry has made significant progress in taking responsibility for the end use of its products by accepting back for reuse and recycling products such as telephone directories, cellphones and batteries. Relative to other industries, many firms boast above-average numbers of women in senior positions, and most have made progress in hiring minorities. Several companies are leaders in supporting employees' charitable donations and volunteerism. Progress has also been made recently in CSR reporting.
Still needs work Problems with employee relations and customer service remain, and have worsened in some cases. Several telecoms, including Telus and Aliant, have experienced a significant increase in labour tension in recent years. Jobs used to be relatively well-paying and secure, but some companies, such as Bell and Telus, have made deep job cuts lately, and a number have sought to reduce employee benefits and weaken job security guarantees. Nagging customer service problems include billing errors and long waits for installations and repairs.
The Bottom Line
This industry is clearly divided between companies that have taken considerable steps to improve their CSR performance and those that have yet to take much--if any--action. However, even the industry's would-be leaders risk undercutting their efforts by outsourcing much of their work to firms that are CSR laggards.
Manitoba Telecom 55
Decent community, diversity and environmental initiatives coupled with relatively few performance-related problems. With only an annual environmental report, it is falling behind the CSR disclosure leaders.
Bell Canada 53
A leader in public disclosure, with annual reports on CSR and the environment.
Bell's environmental sourcing policy and verification procedures are tops in this industry, and it's a leader in supporting employee giving and volunteerism. However, many former employees are doing essentially the same jobs for less pay at new firms set up to take contracted-out work. A 12-year-old dispute over pay equity has been only partially resolved.
Aliant 50
Leader on community initiatives. New three-year agreement largely preserving job security may improve labour relations following a bitter five-month strike over pensions, benefits, job security and contracting out.
Telus 47
Once a CSR leader, Telus has dug in its heels during a long and now-soured collective bargaining process, and failed to meet CRTC-mandated minimum telephone service standards for more than six months in 2004.
Rogers Wireless 43
Unique in the industry for creating a physically barrier-free environment in all facilities. Also, the company has several initiatives in place to attract and retain employees with disabilities. Environmental programs and practices still lag behind peers.
Stratos Global 38
Falls far short of the rest of the industry on disclosure on CSR issues, and is a poor performer on employee diversity. Corporate governance is the company's one area of strength.
Telesystem International 34
Only firm in this group with no women directors. Continued poor disclosure on all CSR issues.
(Laurie Uytterlinde Flood)
© The Globe and Mail
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