The New Rules Of Engagement
With ever-increasing consumer concern over environmental sustainability, companies aren’t just informing stakeholders of corporate decisions; they’re making them part of the process
by Marzena Czarnecka
Ouch. So what are Enbridge’s – and other companies’ – options going forward?
No magic formula, just real interaction with stakeholders that gives them a chance to affect project design and outcome. “If you want to build anything in North America, you have to be respectful of those stakeholders and have open and honest dialogue with them,” says Carpenter.
“The engagement has to be authentic,” echoes Mees. “That means engaging in dialogue without a timeline. If you’re saying our project will go ahead on Dec. 31, and we will engage with stakeholders between now and Dec. 15, you’re doomed to failure.
“It’s about engaging for as long as it takes to succeed.”
This is a huge paradigm shift for companies mired in a tradition of giving stakeholders (in some cases, even shareholders) information on a “need-to-know basis” and a tendency to downplay local community concerns as parochial NIMBYism.
But then, as McCulloch sees it, modern society is experiencing a massive paradigm shift in consciousness around environmental issues – akin to those that led to the abolition of slavery, elimination (in the First World) of child labour, and (ditto) the political emancipation of women.
“Economic and political drivers haven’t gone away,” says McCulloch. “But now there are additional drivers: environmental issues that didn’t exist before, a broader definition of stakeholder perspectives you need to consider, and you’ve got all that within the context of globalization and rapid technological advancement, changing public expectations, resource constraints. All of this is the subtext for very complex decision-making.”
Enmax Corporation realized its decision-making process was changing as it came into being as a deregulated utility in the 1990s. And, anticipating the North American consumer’s green awakening by close to a decade, it went in a “cleaner” direction in 1997 with the launch of GreenMax, which offered customers a lower-impact energy choice – at a premium.
“Utilities [had been] about getting the cheapest power and getting it to the customer,” says Rob Falconer, Enmax’s director of distributed generation. But when customers didn’t balk at the higher price, the company realized there was a market for cleaner energy, says Falconer. (Mind you, he’s careful about his language: “Cleaner doesn’t necessarily mean green,” he concedes. “It may just mean cleaner than what’s already out there.”) Enmax started building wind farms, investigating gasification and cleaner coal technologies and, since 2007, testing the feasibility of solar panels. And it’s been steadily moving away from mega-plants and towards distributed or micro-generation.
Here’s the thing, though: it’s not doing any of this to save the environment. That’s the byproduct. These are business decisions, says Falconer.
“Enmax quickly realized that with the pace that technology has been developing, we are on the cusp of a paradigm shift of how energy will be delivered,” he says. “So the question has been, How are we going to take these new technologies and transform the old stodgy utility business?”
But, like Carpenter’s ideal stakeholder dialogue, meeting those emerging consumer demands isn’t easily executed.
“Alberta companies are talking the talk in terms of innovation, but hands down, all will admit that they are not doing as good a job in this area as they could be,” says McCulloch. “Technology needs to be more than a centrepiece of the innovation agenda – innovation has to become a core competency for organizations. I don’t see any company in Canada that can lay claim to innovation as a core competency.”
But there are scores that are trying, and, like Enmax, not necessarily with an eye on environmental sainthood, but on the almighty dollar.
“We are working to bring the cost of clean energy technologies down and to make them accessible,” says Michael Carten, chief executive officer, chairman and co-founder of Sustainable Energy Technologies in Calgary. Sustainable Energy’s commercial parallel-wired solar panel technology is being tested, among others, by Enmax. “We’re not doing this for environmental or altruistic reasons. We are doing it to sell a product.
“Oilsands companies don’t clean up tailings ponds for altruistic reasons either,” Carten adds bluntly. “They’re doing it because they won’t be able to stay in business if they don’t.”
That’s because the stakeholders, big and small, are watching. Judging. Their power to affect the success of projects – and the economic viability of corporations – is unprecedented.
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