From disaster to action on sustainability
A conversation with Paul SHRIVASTAVA and Stephen KIBSEY
The director of the David O’Brien Centre for Sustainable Enterprise came to his subject relatively late in life.
The “awakening” occurred in 1984, when Paul Shrivastava, who originally trained as an engineer, was teaching at NYU. In December of that year, an industrial accident at a pesticide plant in his hometown of Bhopal, India, profoundly shook his engineer’s faith in technology. The worst industrial disaster in history killed thousands in just days. Hundreds of thousands more suffered permanent injury in the aftermath.
The event galvanized the world … and gave Paul Shrivastava searing insights into technology’s inherent risks.
Today, the David O’Brien Distinguished Professor at the John Molson School of Business (JMSB) shares those insights, proselytizing on behalf of sustainable principles to the business community and leading multiple research projects in North America and Europe.
Listen to the podcast
Download the podcast (21.6 MB)
Making a mark on Montreal
Following early research into industrial crises, which culminated in a book on the Bhopal disaster, Shrivastava extended his inquiries into environmental issues and management. As a pioneer in the subject, he discovered a troubling lack of awareness about the long-term risks of unfettered development.
By the time he arrived at Concordia in 2009, however, the situation had changed. Business no longer needed to be sold on sustainability — not when shareholders, employees and customers were clamouring for it.
Shrivastava arranged a lunch meeting with some of Montreal’s financial heavy hitters, whose investment decisions can affect the practices of thousands of companies. During the friendly exchange, he told the small group about his interests and sought common ground. That initial group of 15 soon led to the Finance Sustainability Initiative (FSI), which now has more than 65 corporate members, and to the Sustainable Investment Professional Certification program at Concordia.
Developed in partnership with FSI members and offered by the JMSB, the certificate program is accepting its first students for the program, which starts in September. Its goal is to help finance professionals inform their business decisions with sustainability principles — a very long journey from Bhopal indeed.
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.”
Part of a team of professionals that helped found Hindustan Computer Ltd., one of India’s largest computer companies, Paul Shrivastava also co-founded the non-profit Industrial Crisis Institute in New York City, and the Organizations and the Natural Environment (ONE) Division of the Academy of Management, which now has a membership of some 1,500 business professors who study environmental and sustainability issues.
With a PhD from the University of Pittsburgh, Shrivastava has been a tenured associate professor of Management at NYU’s Stern School of Business and held the Howard I. Scott Chair at Bucknell University. A former Fulbright Senior Scholar, Shrivastava has authored or co-authored 15 books and more than 100 articles in scholarly and professional journals.
Stephen Kibsey’s interest in sustainability began in high school when he received the Youth Science Foundation’s Man and his Environment Scholarship to attend a summer semester at the University of Guelph. He has degrees in Physiology and Engineering from McGill, and an MBA from Concordia. Kibsey holds a CFA designation and is a member of the Community of Interest Panel for the Mining Association of Canada, a member of the interim executive board of the Corporate Social Responsibility Centre of Excellence, Chair of the Business Advisory Council for the Sustainable Investment Professional Certification Program, and a long-time mentor to the Kenneth Woods Portfolio Management Program at the JMSB.