From disaster to action on sustainability

In conversation — Beyond the headlines

Sustainability principles are being embedded in business, Paul Shrivastava and Stephen Kibsey agreed, during a probing exchange at Concordia. Kibsey is in a good position to know. He’s vice-president of Equity Risk Management at the Caisse de dépôt et placement du Québec, which is one of Canada’s leading institutional fund managers, with over $150 billion in assets.

Sustainability is not a sentimental appeal for “do-gooders and treehuggers,” Shrivastava maintains during their conversation. It’s now mainstream, which is why finance and investment professionals are tapping into research at Concordia’s David O’Brien Centre for Sustainable Enterprise.

The centre focuses on research that enables us to “understand all the connections in marketing and operations, in finance and accounting and information systems, to lead efforts to move towards social and ecological responsibility,” says Shrivastava.

The caisse for sustainability

Supported by the Caisse’s welldeveloped policy on responsible investment, Kibsey says, “A lot of mainstream investors are now integrating ESG factors [environment, social responsibility and governance] into their evaluations when they’re trying to make an investment.

Leaders and followers

In a revealing moment, Shrivastava points out the uneven way sustainability principles are being adopted. “Some are leading, like the Caisse de dépôt,” he says, “but there are still some in the old paradigm.”

Kibsey agrees that too many investors take a short-term approach, “but the longer-term players like ourselves, which are mainstream, have to look at these ESG factors when we make our longterm evaluations.”

The business of research

Shrivastava says companies are now looking for clarity in the relationship between social, environmental and financial issues. They’ve moved beyond the perceived conflict of a generation ago between social, environmental and financial goals.

SHRIVASTAVA: Research has … shown that social and environmental costs don’t necessarily have to be only on the cost side. They’ve also shown that there’s a correlation between profitability, social profitability, and social and ecological performance. Of course, we need more studies to validate it under different industry conditions and under different circumstances, but I think there’s a lot of research that has provided the confidence business managers need that this is not just a ethical issue. It is an investment issue … a real financial issue.

Going to Mongolia

When the conversation turned to JMSB’s Sustainable Investment Professional Certification program, Shrivastava pointed out that it’s designed for professionals, “to appreciate sustainability concepts in real life and then apply them to real-life projects.”

Kibsey’s response affirmed the program’s sound design principles. “Let’s take an example from my own life,” he says. “For the last three weeks I’ve been travelling through Mongolia. There’s no way I could get to the classroom. Yet I had all the materials I needed and what was really interesting is that, as I read the materials in the first module, as I was travelling, I was able to immediately look and assess things with that information … from the course. So it’s kind of a classroom out in the world … And that’s what a professional needs because … you can learn a lot quicker and use it in your professional assessments right way.”

Developed versus developing

Shrivastava ponders whether developed countries are unfairly imposing the concept of sustainability on the developing world.

SHRIVASTAVA: We in the West are over-consuming. We need to cut back … there’s no question about it. But you can’t tell the same thing to a person in Africa, or in an impoverished part of India or Mongolia.

While Shrivastava is frustrated by Canada’s lack of leadership on environmental issues, he ends the discussion with a note of cautious optimism. “Yes, I’m impatient,” says Shrivastava. “On the other hand, I don’t see that this is a problem that is unmanageable … We need leadership that recognizes [a very strong economic case for sustainability] and that not only thinks in national terms, but in global governance terms.”