BC Chapter Update:

In February the BC Chapter held its inaugural CIRI Talks (our own version of the popular TED Talks), followed by our first social event of the year. Lori Rozali of Teck Resources, Kettina Cordero of Pan American Silver, and IR and communications consultant Alyssa Barry shared their professional and very personal experiences, in an informal and dynamic series of presentations. Rozali discussed how analyst modeling workshops are helping Teck bridge the gap between its own forecasts and the expectations derived from models prepared by sell-side analysts and portfolio managers. Cordero discussed how being multicultural and multilingual helped her successfully transition through various industries and countries, from a formal office environment in her native Peru to a very different work environment in Canada. Barry shared experience gained as part of the multidisciplinary team that successfully executed the high stakes sale of Amica Mature Lifestyles to BayBridge Senior Living in a record-breaking transaction. Like the TED Talks, their ideas are worth spreading…and replicating. An engaged audience kept the exchange going past the Q&A sessions and well into the social part of our event. We are eager to hear what experiences CIRI members in other Chapters will share next!

Alberta Chapter Update:

CIRI Alberta hosted two events recently: another of its informal networking sessions, Brains over Beer, in mid-March, and a luncheon in February focused on How Sustainability Has Expanded the IRO’s Role.

The speakers were: Peter MacConnachie, Sustainability Issues Manager, Suncor; Sander Jansen, Sustainability Services Manager, KPMG; and Alison Schneider, Director, Responsible Investment, AIMCo.

AIMCo has a team (responsible investment committee) to support investment decisions and portfolio holdings. It tries to engage in meaningful dialogue to enhance value – particularly in terms of risk mitigation strategies. Responsible investing is growing in importance and the team considers:

• Fiduciary duties – stability and risk adjusted returns;
• ESG (environment, social, governance) companies perform better over the long-term;
• The public demand for this; and
• The impact on the bottom line is becoming more apparent (climate change, safety, pay for performance).

AIMCo looks for data relevant to its decision. For example, banks have better greenhouse gas performance than resource companies – but it doesn’t address key issues. Lack of standard definitions, transparency and clarity create problems. Companies tend to be too inward looking in their CR reporting, ignoring bigger trends and risks.

Suncor has three main sustainability goals:

• Reduce resource intensity – saves money and is good for the environment;
• Support sustainable and resilient local economies – the company wants to be seen as an owner, not a renter; and
• Look at ways (especially new technologies) to reduce carbon emissions.

MacConnachie is being invited to more and more investor meetings. Europeans are further down the sustainability path, but North American firms are catching up. Hot topics for Suncor right now are:

• Provincial Climate Change Regulations timing and impact;
• Relationships with First Nations and Metis.
• Land disturbance, wetland issues, caribou, and boreal forest;
• Water use and low flow concerns (Athabasca River); and
• The divestment movement.

MacConnachie does more than 40 formal meetings and tours a year. He noted that many activists are master storytellers – and that the industry must get better at telling its story rather than just quoting facts.

A recent KPMG survey shows that 67% of portfolio managers see sustainability reporting as important – up from 40% in 2008:

• 63% believe it helps manage investment risk;
• 44% say their clients demand it; and
• 38% see ESG performance as a proxy for management quality.

Looking at the U.S. in 2015, 47% of shareholder proxy resolutions related to oil and gas companies, followed by the power sector at 16%. Leading topics were climate (78%), governance (25%) and sustainability reporting (14%).

Approximately 50% of portfolio managers believe that companies should issue sustainability reports. Almost 70% of those believe that these reports should be subject to external assurance. MacConnachie also spoke about the concept of ‘true earnings’ as starting to gain prominence (taking into account social and environmental costs and benefits).