Redefining the Best 50 Corporate Citizens in Canada.

With research by Bernice Tong, Ada Puiu, and Daniel Caunter

Six years ago, Corporate Knights broke new ground with our inaugural Best 50 ranking, the first annual ranking of its kind in Canada. The Enron scandal, now immortalized in business school curricula the world over, had just shocked an adolescent economy into a strange new adulthood. Weeks after we released our ranking, the Securities and Exchange Commission launched an investigation into WorldCom’s multi-billion-dollar accounting fraud.

Amidst this doom and gloom came a ranking that highlighted the good things that Canadian companies were doing. Reaction to the Best 50 ranged from hearty praise to outrage over the chosen fifty. One of that year’s ranked companies told us there was “no need” for our ranking and that publishing the results in .pdf form on the website would have sufficed.

For the most part, though, companies were quick to ask how they could be considered for the following year’s list, and some even started to ask for advice on how to better their citizenship record.

Six years ago, Corporate Canada was ready for change.

But what has changed since then?

For one thing, our definition of citizenship has broadened. The meaning of corporate citizenship has morphed from philanthropy on the side to how corporations can change the world for the better through their core competency, whether by providing low carbon green transport solutions via trains by CP, or building wind turbines by GE, or financing more geothermal power by the banks.

Our ranking has evolved with the times to include key performance indicators (KPIs) that get to the bottom of corporations’ impact on society. For instance, if we are talking about banks, making hybrid vehicles available to top executives is nice, but a poor substitute for a thorough investment program in renewable energy.

We’ve also moved away from using the term “corporate social responsibility” to describe citizenship, favouring “responsible business” instead. CSR implies a siloized section of the company that works separately from the “mainstream” divisions like finance or product development. But it’s clear that the best companies integrate citizenship consciously into their entire operations—from the frontlines to the C-suite, from beginning to end of the product lifecycle.

In short, the Best 50 have raised the bar for themselves.

On the other hand, the Best 50 aren’t as Canadian as they used to be. Many of the firms we assessed back in 2002 have been absorbed by global conglomerates or each other.

Zenon Environmental Inc., our very first Best Corporate Citizen, is now a subsidiary of General Electric. Other disappearing acts include Inco (now Vale Inco), Alcan (Rio Tinto Alcan), Falconbridge and Noranda (Xstrata), Ultramar (Valero), Novelis (Hindalco), Tim Hortons (TDL Group), Dofasco (ArcelorMittal), Cognos (IBM), and Abitibi-Consolidated (AbitibiBowater).

We’ve had to decide whether or not to continue to assess these companies as Canadian, and for the most part, we have. After all, these companies employ thousands of Canadians—so they should be accountable to us.

So is this ranking indicative of the best corporate citizens in Canada, or of the best operations in Canada? Is it possible to be a “citizen” when profits and taxes are going back to foreign governments? Of the Best 50, 34 are Canadian-owned and operated firms, but time will tell how long this will remain the case.

All is not lost. Thomson Reuters Corp, vaulting 83 spots from last year, acquired Reuters in April 2008. In doing so, Thomson also acquired Reuters’ social and environmental track record, including its partnership with Planet Ark, one of the key quality comprehensive sources of environmental happenings. The company has a Chief Environment Correspondent and a network of environmental journalists.

The Reuters Foundation also partners with the Com+ Alliance of Communicators for Sustainable Development, a group of international organizations committed to using communications to advance sustainable development projects.

Loblaw Companies Limited (LCL), another Canadian mainstay, increased its score this year thanks to the printing of its inaugural sustainability report. This report highlighted its innovative local food initiatives and private-label PC Organics and PC Green product lines. The company is also making strides in measuring its carbon footprint and has an environmental flagship store. LCL is also piloting several renewable energy projects, one of which involves reclaiming heat from refrigeration systems to heat stores.

Clearly, there are opportunities for Canadian firms to step up and claim a spot on the Best 50. There is a niche ready and waiting for the nice guys to fill with environmentally sound, responsibly sourced products and services created by well-paid, healthy employees from a variety of backgrounds.

At the same time, the Best 50 shouldn’t rest on their laurels. There’s reason to celebrate, but we haven’t reached optimal sustainability yet—there’s certainly room for improvement, and we encourage even our top-ranked companies to continue to strive for better.

As we explained in 2002, those that didn’t make the list aren’t demons, and let us not forget their admirable initiatives. In fact, we expect to see some of them on the list in coming years. After all, the changes this year are proof that no company is guaranteed a spot on the Best 50. But they’re also proof that everyone has a chance.

For full Best 50 coverage, click here.