Westport Innovations has had enough of being the underdog. Soaring from seventy-first place to ninth on this year’s Best 50 list, Westport Innovations Inc., developer of environmental technologies that enable vehicles to operate on clean-burning alternative fuels, published its first sustainability report in June and applied to list with the NASDAQ in July.

In a candid interview with Corporate Knights, Westport’s Jonathan Burke, Vice-President Corporate Development, and Karen Hamberg, Director, Sustainability and Environmental Performance, discuss Westport’s strategy and brand in Canada, the triple bottom line, and the sustainability of sustainability reports.

CK: Westport’s score increased dramatically this year. Have you found that the appetite is increasing for green technology?

Jonathan Burke (JB): The financial improvement we’ve seen for the top line of the company and the bottom line is being driven by the demand of our customers – not just for climate change initiatives, but also for overall sustainability principles.

We’ve slugged it out here for over ten years and are just now starting to see that our products are becoming mainstream. They’ve been validated enough by enough different early adopters in places like California and China that we are now considered a mainstream product, which is a big turning point for a product that initially was marketed for environmental reasons only.

We are seeing that they are being embraced by corporations not just for their environmental benefits, but also for their economic benefits. Many sustainability managers go to their CEOs and wave the sustainability flag, but tend not to communicate the other potential benefits such as higher efficiency business processes, energy savings, cost savings – all those kind of things that ultimately financial managers and CEOs need to show for their shareholders and their stakeholders.

CK: This year marks Westport’s first sustainability report. What brought this on?

Karen Hamberg (KH): We had fielded so many questions from institutional investors and customers about what we’re doing. [They said,] you can tell me all the stories you want, but we want to see the numbers, your plans, your objectives. We’ve kind of come out at the peak of it, when you see these fantastic, glossy fifty-page sustainability reports, and now it’s trending back to what people really want to see and need to know. Ours is quite Spartan. There are no pictures of ducks and kids flying kites!

JB: If we’re truly a sustainable organization we’re going to do everything we can to reduce the size of our annual report. We print the thing on thin paper in as small a font as could be reasonably expected to be read by someone with a magnifying glass. [laughs] There are sustainability reports that are like lead bricks that land on your doorstep - 60 pages of glossy, but printed on recycled paper! [sarcastically] But ours has good data in it; it shows areas where we could improve, areas where we have improved, and it lays out what we’re trying to do.

CK: We’ve found that the companies best regarded by consumers are those that not only act green (converting to CFL bulbs, recycling internally), but incorporate environmental friendliness into their entire business – including products. Has Westport found that this is true?

JB: Absolutely. It is tough at first because you’re a bit of standout – I can tell you $290 million later it’s quite expensive as well to build a business selling products with environmental merits. But we’ve had some very long-term shareholders in Europe who have tended to be a lot more patient with regards to our goals and mission, understanding that this stuff doesn’t happen overnight. So that’s been critical to our success.

KH: I know that when I sit with other sustainability [officers], they’re always [wondering] how to communicate the green virtues of their products. And with us it’s not a program and it’s not priority – it’s just who we are and it sort of drives everything else. So I may not have had the same sort of battles that other sustainability managers have had because it’s just right there; it’s in our product.

JB: We’re a company and employee group that really does stand behind and walk the talk of what we’re trying to sell.

CK: As one of our few Canadian success stories remaining on the Best 50 list, what has Westport done to develop its brand in Canada?

JB: One thing we’ve really struggled with is of our $72 million in revenue (as of March 31, 2008), approximately $150,000 of it was in Canada. And that’s sad to us. And many other technology and cleantech companies will probably tell a similar story. First, Canada’s a relatively small marketplace. Second, purchasing managers tend to be more risk-averse here in Canada than elsewhere. They tend not to want to stick their noses out and take a risk on a technology or a fuel type – they like the status quo. So that is problematic for us. We do a lot of business in California and elsewhere in the US. We’re now doing a lot of business in Asia. We just signed an agreement to jointly develop a product with a large European manufacturer. So there’s a tremendous amount of pull to go to those other jurisdictions.

One thing we can say about Canada and Vancouver is that it’s a great place to work and raise a family. Here in BC we’re starting to see our government take some pretty bold steps with regards to climate change, and also more broadly on environmental and air quality issues. And that gives us even more reason to stay.

CK: When what’s good for sustainability isn’t good for the bottom line, does business have a responsibility to change the rules?

JB: I have a hard time with the question because in our opinion, although many business leaders may consider the bottom line the only target for a business, we consider more than just the bottom line when running our business for the long term. And if you talk to many leaders of sustainability “gold standards” in business, they will state that it may not appear to be good for the bottom line in the short term, but sustainability initiatives are ultimately good for the business.

I think the biggest problem we have in business today is we chase the short-term, quarterly objectives at the expense of good long-term business planning. And many CEOs will probably agree with that. When we look at what it takes to be a sustainable organization, we look at those things from a long-term perspective because sustainability is measured in the long term.