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May 07, 2003
Canadian Greenhouse Gas and Toxic Emissions Resolution Garners Near Record Support
    by William Baue

A near majority of IPSCO shareowners voted in favor of a resolution asking the company to report on its greenhouse gas and toxic emissions.


At last week's Annual General Meeting (AGM) of Canadian steel manufacturer IPSCO (ticker: IPS), 49.2 percent of shareowners voted in favor of a resolution that asks the company to disclose facility-specific toxic and greenhouse gas (GHG) emissions. This result represents second highest levels of support for a social or environmental shareowner proposal ever recorded in North America, according to Vancouver-based Ethical Funds, the socially responsible investment (SRI) firm that filed the resolution.

Although the company characterized the resolution as "defeated," Board Chair Burton Joyce reassured shareowners that the company listens to their concerns.

"The board will, as proposed, irrespective of the outcome of the vote, consider the question of a disclosure policy at our next regularly scheduled meeting," said Mr. Joyce at the AGM.

Robert Walker, Ethical Funds' vice president for SRI policy and research, lauded the positive environmental practices IPSCO employs at its 12 steel plants in Canada and the U.S. Such practices include environmental management system certification, an exemplary scrap steel recycling process, and production technology that creates an environmental burden ten times lower than conventional steel manufacturing.

"In the area of public disclosure of its emissions of toxic, hazardous, and substances of concern, however, IPSCO lags its peers," Mr. Walker stated at the AGM. "IPSCO also lags its peers in disclosing greenhouse gas emissions."

Ironically, the scrap steel recycling process represents one of the stumbling blocks to disclosure. IPSCO is currently embroiled in litigation that seeks to block Environment Canada from publishing facility- and company-specific emissions data in the National Pollutant Release Inventory (NPRI). This inventory is similar to the U.S. Environmental Protection Agency (EPA) Toxic Release Inventory (TRI).

IPSCO points out that most companies cannot currently equal the quality of IPSCO steel produced from scrap, and contends that publication of NPRI data would allow competitors to gain insights into IPSCO's proprietary production techniques.

"Yet it would appear that competitors can readily do so, should they chose, by examining emissions releases from U.S. plants which are already disclosed under the TRI," said Mr. Walker.

IPSCO counters that Canada's NPRI and the U.S.'s TRI are not exactly the same.

"US regulations are not as misleading," said David Sutherland, IPSCO's president and chief executive officer. "They are confined to true toxic materials."

Both NPRI and TRI focus on toxic materials, but NPRI does track materials that have not been proven to be toxic yet. However, Mr. Walker points out that scientific understanding of toxicity is constantly evolving. What is now considered benign may be discovered to be toxic in the future.

IPSCO also claimed that disclosure could be costly.

"IPSCO already collects and provides information to the NPRI," Mr. Walker countered. "It is therefore difficult to understand how allowing disclosure would cost the company additional money."

Ethical Funds also notes that IPSCO does not participate in the Voluntary Challenge and Registry (VCR), which tracks greenhouse gas emissions, though most of its competitors in the steel industry do participate. The Canadian government has committed to mandating GHG emissions reductions by 2004, a measure that will require reporting as well.

At the heart of the matter is the benefits versus the liabilities of disclosure.

Mr. Walker clearly believes in the power of disclosure to encourage best practice and safeguard shareowner value.

"What gets measured gets managed," said Mr. Walker. "What gets disclosed gets reduced. Reducing emissions reduces potential risks and liabilities."

"Ethical Funds believes that the adoption of a policy of disclosing emissions data would be in the best interests of IPSCO, in the best interests of IPSCO shareholders, in the best interests of IPSCO employees, in the best interests of the communities where IPSCO locates its plants, and in the best interests of future generations," Mr. Walker continued. "We're gratified that nearly a majority of IPSCO shareholders agree."

 

 
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