Jim Harris

Canada Business News

Davos: Talking Champagne on a Sinking Titanic

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I am in Davos at the World Economic Forum (WEF) where the top issues that world leaders must address are: unstable global economy, eurozone fragility; and financial system instability. Climate change only ranks as the 7th issue. To me, it's like a group of business leaders and "experts" on the sinking Titanic discussing the fragility of champagne sales. I am deeply concerned about the Alice-in-Wonderland perception of the environment's big picture. On the morning of Saturday, January 12 when I logged onto Facebook, a friend's status update jumped out at me: "WHY DO MEDIA FAIL TO DISCUSS OPENLY THE SIGNS OF CLIMATE CHANGE? IT"S NOW 12 DEGREES IN TORONTO, NO SNOW, AND THE SIGNS OF SPRING IN JANUARY ARE NOT GOOD FOR ECOLOGY, HYDROLOGY, OR HUMAN PROSPERITY." Later in the day the temperature rose to 15ºC, at 3 p.m. setting a new record according to Environment Canada. It is deeply disturbing that we experience +15ºC in the middle of winter. And I am disturbed listening to the media commentary about how wonderful this warm weather is. A friend mentioned that the Magnolia tree in their neighbourhood was showing signs that it was about to bud. If this Spring weather continues in the middle of winter it will bud. And its flowering will be killed off with the inevitable return of winter weather. The stability and predictability of the seasons is defined as "security" by many Aboriginal peoples. The changing of the weather on a global scale is bringing unprecedented, … [Read more...] about Davos: Talking Champagne on a Sinking Titanic

Why CFO’s Need to Care About Sustainability Now

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Chief Financial Officers (CFOs) and Chief Operating Officers (COOs) are increasingly accountable for sustainability. A study by Deloitte -- Sustainability: CFOs are coming to the table -- found their accountability for sustainability had jumped sharply during the last year. In 2012, 26 per cent of CFOs were responsible to the board for their firm's sustainability strategy, up from 17 per cent in 2011. Similarly, for COOs it was 10 per cent in 2012, up from 3 per cent in 2011. Further, 53 per cent of CFOs said their involvement had increased in the last year, with 61 per cent noting they expected it to increase over the next two years. The increasing relevance of business sustainability to financial performance and shareholder value was also highlighted in a recent study by the Chartered Accountants of Canada (CAC) -- Sustainability: Environmental and Social Issues Briefing, which noted that "key environmental issues, stakeholder trust and relationships and an evolving environmental and social legal and regulatory landscape are interconnected and impact strategy for competitiveness, risk and resilience." The report draws attention to the many environmental and social issues of relevance to directors in discharging their oversight responsibilities, including strategy, risk and risk oversight, financial performance, external reporting, and the reliability of reported information. When Canadian Tire began reporting its environmental footprint and the … [Read more...] about Why CFO’s Need to Care About Sustainability Now

Will Canada Take Action on Energy?

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Canada needs a "national approach to climate policy and carbon pricing." Think that this is the advice of some environmental group? Then think again; this is the urging of the Canadian Council of Chief Executives (CCCE) in a policy paper: Clean Growth 2.0: How Canada can be a Leader in Energy and Environmental Innovation. The paper highlights how Canada can build a more competitive economy and a more sustainable society while ensuring adequate public finances to fund Canadian's way of life. It calls for the federal government, in partnership with the provinces and territories, to develop a national energy framework, specifically to "develop clean energy solutions and position Canada for leadership internationally." And, contrary to current inaction, the CEOs urge Canada to take the lead in establishing a bilateral energy and climate accord with the United States to incorporate Canadian interests, and secure greater cross-border collaboration on energy, climate change policy, technology and trade. The CCCE stresses that a bilateral approach does not mean that nothing can be done until there is clarity on US action; rather, it argues that we must begin to prioritize areas for coordination and ensure that our policy is adaptable to the eventual US system. One thing is certain; during the interim, we cannot expect the Americans to adequately represent Canadian interests in our absence. Proffering five strategic recommendations, the CCCEs argue that a national … [Read more...] about Will Canada Take Action on Energy?

Why Culture Eats Strategy for Breakfast

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"Culture eats strategy for breakfast, every day." This was Tyler's response to a question during a panel session at a recent conference. The panel was discussing the challenges faced by professional managers in their efforts to implement sustainability into business. The other challenge under discussion was about finding the appropriate balance between sharing insights and strategy with others, versus holding some things back for the competitive reasons. Tyler's comment was relevant to both. His point: having a strategy is one thing, but being able to implement it is entirely another. After all, the value of a strategy is not what is written on the whiteboard or the back of napkin, it is the value unleashed by engaging the minds and hearts of motivated employees and suppliers. The key to unlocking this value is to understand and harness the corporate culture, work within its bounds and value system, while making room for new ideas. Enterprise Risk Management colleagues refer to the ability to implement a strategy (or not) as "execution risk." Tyler has been fortunate to have had the experience of developing and implementing business sustainability strategies over the past decade in three different, very large corporations: a $14 billion company, a $400 billion company and Canadian Tire, a $12 billion company. In every instance he had to tailor his approach to the culture's unique value system and the process by which ideas are accepted into the … [Read more...] about Why Culture Eats Strategy for Breakfast

What’s Really Killing Print Journalism

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Print journalism is changing fundamentally. Three dramatic events last week make the point: On October 18, Newsweek magazine announced it will become a digital only publication in 2013, ending 80 years in print. The same week, John Stackhouse, Editor-in-Chief ofThe Globe and Mail, announced that the paper will launch a paywall for its articles. You will get to read the first 10 articles a month for free and then have to pay for the remainder. Finally Huffington Post Canada announced it has become Canada's largest national news site, with a record 3.9 million monthly unique visitors. In the US HuffPost's traffic has trumped the New York Time's. [...] … [Read more...] about What’s Really Killing Print Journalism

The Benefits of Carbon Shadow Pricing

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Placing a shadow price on carbon can help a company cut costs, while dramatically reducing its risk and exposure to rising energy prices and a price being put on carbon. One of the roles of corporate strategy function is to assist the CEO and board in managing strategic uncertainty and risk. Knowing that it's impossible to accurately forecast future events, one of the jobs of corporate strategy is to develop scenarios of potential future realities, strategies for these scenarios, and a portfolio of options that may be exercised in the event that a scenario comes into being. Royal Dutch Shell is perhaps the best known example of a company using scenario planning to prepare for future events, beginning in the 1970s. Shell's scenario planning prepared it for the first oil crisis in 1973 -- when the price of oil quadrupled in just 18 months. Most recently Shell has been using scenario planning for developing strategies mitigating the effects of climate change. The greater the value of resources and time invested in a strategic commitment -- such as developing a new oil field or pipeline -- the greater the value of scenario planning is to an organization. But a firm doesn't have to be a multinational oil company to get value from managing the risk that is implicit in any business strategy. Planning for a Carbon-constrained Economy Placing a price on carbon of anywhere from $10 to $80 a tonne can have a profound effect on business planning. It immediately … [Read more...] about The Benefits of Carbon Shadow Pricing

A Little Less Cardboard Can Save You Millions

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Using sustainability as strategy can drive change within a company's supply chain by engaging suppliers and service providers with the resulting savings running into the millions of dollars a year. A case in point: one of Canadian Tire's most popular products is a six-foot folding utility table, selling many tens-of-thousands a year. The company collaborated with its supplier on product redesign and packaging to use less raw materials to make and package the product. Now, the tables use 11 per cent less plastic in their construction and occupy 15 per cent less volume for shipping. The annual savings for Canadian Tire: more than $375,000 a year as a result of reduced material, packaging and shipping costs. Employee Engagement Sustainability as strategy can also engage employees. In 2010, Canadian Tire's Senior Vice President of Merchandizing invited all the company's buyers to the conference centre for an afternoon departmental meeting. Employees thought it was to discuss organizational restructuring. Before the start of the meeting, the conference centre was very quiet. The goal, it turned out, was to engage buyers in a creative way -- to shake things up -- to facilitate some disruptive innovation on something that should have been a core element of their business activities, but at the time wasn't. Corporate thinking is often to execute on a perfect plan -- in this case, we wanted to take buyers out of their usual, comfortable environment and see … [Read more...] about A Little Less Cardboard Can Save You Millions

There’s More Oil in Detroit than Saudi Arabia

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Transportation accounts for 29 percent of US and 26 percent of Canada's Greenhouse Gas (GHG) emissions. It also accounts for 70 per cent of oil consumed in North America is used for transportation. On average the US consumes about 367 million gallons (1,389 million litres) of gas a day, driving 8 billion miles (13 billion kilometres) per day while in Canada we consume 264 million litres daily. In the US, passenger cars, SUVs, pickup trucks and minivans account for 59 per cent of transportation GHG emissions while freight trucks represent 19 per cent and commercial aircraft (both domestic and international) account for 12 per cent. Canadians drive more than 300 billion kilometres (186 billion miles), each driving on average 16,000 km per year. All in all, it is billions of barrels per year. And what's the potential for savings? Huge! First off, if every car in North America got the same fuel efficiency as Jim's Toyota Prius, there'd be no need for oil imports into North America. And there'd be no need to drill in the Gulf of Mexico or to drill in the Arctic. In other words, the billions of dollars that the US sends to Middle Eastern countries to import is a choice. By choosing not to regulate for higher fuel efficiency standards, the US voluntarily sends billions of dollars to foreign countries every year and unnecessarily exposes itself to environmental, economic and political risk. Roughly half the … [Read more...] about There’s More Oil in Detroit than Saudi Arabia

In Business, Don’t Waste a Crisis

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Many Canadians are trying to do more with less during this economy of thrift. But we all face essential expenses -- those costs associated with "keeping the lights on" -- often, literally. Whether you're managing a household or a large corporation, energy -- that stuff that enables your car to move from one place to another, keeps your beer cold and your shower hot -- is generally regarded as an essential expense. Sure, you could drink warm beer and take cold showers; but really? There's got to be a better way. During a poor economy, it can be a challenge for a business to increase profitability as competition for the "cautious consumer" intensifies and there is increasing pressure on margins. But a recession offers the perfect opportunity to question the way things have always been done -- and drive out waste and inefficiency. One of Jim's favourite slogans is: "a crisis is a terrible thing to waste." While most are cautiously optimistic about the North American economy today, it was a different story in the latter half of 2008 when Canadian Tire launched its Business Sustainability Strategy with an aspiration to profitably grow the business without increasing energy use or contributing to an increase in the carbon footprint of the economy. And the company has been somewhat successful: energy and fuel used to move product from vendors to stores is nine per cent lower, despite a 22 per cent increase in tonne-km of product shipped. And energy use for buildings and … [Read more...] about In Business, Don’t Waste a Crisis

You Are Better Off Investing in Sustainability Than Stocks

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It is surprising just how big is the "sustainability" opportunity is. In just the energy efficiency (EE) field McKinsey & Company estimates that $2 trillion can be invested in EE by 2020 with an internal rate of return (IRR) of 17 per cent. To put that into perspective: that rate of return is better than investing in the stock market or in real estate over the long-term -- the two investments we're always told give the best long-term returns. The net effect would be equivalent to cutting the need for 64 million barrels of oil a day -- about one and a half times today's entire U.S. consumption. [...] … [Read more...] about You Are Better Off Investing in Sustainability Than Stocks