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Ranks of Canadian Corporate Sustainability Reporters Swell as Business Case Made

Published 12-16-03

Submitted by Stratos Inc.

OTTAWA - The number of Canadian companies issuing corporate sustainability reports is escalating as the business value of demonstrating corporate responsibility is being recognized.

That’s one of the key findings of a benchmarking survey released Monday by Stratos Inc., an Ottawa-based sustainability consulting firm.

“More companies are responding to increased demands for transparency by issuing reports detailing corporate performance in a range of environmental, social and economic areas,” said George Greene, president of Stratos. He added investors are learning that companies that manage environmental, social and economic issues effectively tend to be better managed overall and represent a higher value investment.

Stratos identified 100 Canadian companies that published sustainability or integrated annual reports for the 2001 or 2002 reporting years. That’s almost double the 57 reporters identified for the 2000 reporting year.

Greene noted that 60 per cent of the companies on the TSX Composite Index now report some sustainability performance information, and 22 per cent published sustainability or integrated annual reports for 2001 or 2002. He added that the 35 reports studied in detail in the benchmark survey also show a significant improvement in the quality of the information the companies provide on their environmental, social and economic performance.

The leading Canadian companies compare favourably with the best in the world. Two Canadian companies - Calgary-based energy company Suncor and Vancouver’s VanCity Credit Union - ranked third and fifth when compared with five of the top international reports.

Based on how companies report on their sustainability practices, 11 reports share the top 10 scores in the Stratos survey:

  • Suncor
  • VanCity
  • Hydro-Quebec
  • Petro-Canada
  • Enbridge
  • Weyerhaeuser
  • PotashCorp
  • Dofasco
  • Syncrude
  • BC Hydro
  • OPG
  • This second survey is part of an ongoing sustainability benchmarking program by Stratos that seeks to stimulate an increase in both the quantity and quality of corporate sustainability reporting in Canada.

    To view the entire survey on-line, see the Stratos Web site at www.stratos-sts.com.

    Executive Summary

    Building Confidence is the 2nd national survey of corporate sustainability and social responsibility reporting practices in Canada conducted by Stratos Inc. The report focuses on corporate transparency and what information companies choose and choose not to reveal to the public about their performance on environmental issues, on social issues such as health & safety, business ethics and human rights, and on relations with communities and Aboriginal peoples.

    What the Survey Found

    Leading the way

    There has been a rapid growth in companies publishing reports on their environmental, social and economic performance in Canada – the number of reports has almost doubled from 57 in 2001 to 100 companies in 12 sectors in 2003.

    Quality is improving but highly varied

    Report quality is improving with a 11% survey average increase from 2001 to 2003; Canadian best practices exist in most categories of reporting. The spread between the top reporters and the rest remains wide, both within and between sectors. The survey found that for many reports:

  • Environmental information is not complete and lacks rigour
  • Economic information does not reflect contributions made to local, regional and national economies
  • Social information is weak in areas such as employee relations and business ethics
  • Leading Canadian reporters compare well with the world’s best

    When 35 Canadian reports are ranked against five global leaders in sustainability reporting, two Canadian companies – Suncor and VanCity Credit Union - rank among the top five.

    TSX Companies Responding

    60% of the TSX Composite Index listed companies are reporting some form of sustainability information. Of these, 22% produce substantive reports on their environmental, economic and social performance.

    Raising the Bar

    Responsible corporate governance

    The public is increasingly demanding information on how corporations address environmental and social issues. Good governance requires demonstrating clear Board and executive accountabilities and robust management systems to act on corporate environmental, social and ethics policies. Leading Canadian companies are responding with Board-level committees overseeing these broader aspects of corporate performance.

    Involving stakeholders

    Stakeholders can significantly affect corporate reputation. Engaging them constructively in reporting processes and in addressing company issues can lead to more informed corporate decision-making and better external relationships. While there are good practices, few companies report thoroughly on key issues identified by their stakeholders or how the companies respond to their concerns.

    Expanding what is material

    What matters to investors is moving beyond short-term financial risk. Investors are increasingly expecting companies to disclose environmental and health liabilities, and financial implications and management strategies for a wider range of risks such as climate change or human rights conditions. Responding to the Canadian Institute of Chartered Accountants guidance for disclosure, leading companies are starting to address these material risks in their annual Management Discussion and Analysis (MD&A).

    Furthering the debate – To share your comments and perspective, please contact:
    George Greene ggreene@stratos-sts.com or Julie Pezzack jpezzack@stratos-sts.com
    Stratos Inc (613) 241 1001 www.stratos-sts.com

    Building Confidence Sponsors: DFAIT - the Department of Foreign Affairs and International Trade, Enbridge, Environment Canada, Industry Canada, Natural Resources Canada, Nexen, Petro-Canada, PotashCorp, Syncrude, TELUS, VanCity Credit Union

    Stratos Inc.

    Stratos Inc.

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