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.
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
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
"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."