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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

Aug 1, 2009

by Marzena Czarnecka

This May, weeks before entering into an election campaign, Norway’s government found itself bouncing an environmental hot potato, courtesy of Alberta. Right-of-centre opposition parties pushed for a parliamentary vote that would instruct the left-leaning Norwegian government – a two-thirds shareholder in oil and gas producer StatoilHydro – to respond to international criticism of Alberta’s environmental performance and get out of the province’s oilsands.

StatoilHydro is not an isolated target. Royal Dutch Shell plc had protesters agitating against its Alberta oilsands investments as well. Likewise, France’s Total S.A., which plans to invest up to US$20 billion in its oilsands portfolio via its Canadian subsidiary Total E&P Canada, has faced opposition from the global press. Domestic players aren’t exempt from scrutiny either. Syncrude Canada Ltd. continues to struggle with global backlash lingering from the waterfowl deaths in its tailings ponds in spring 2008. And staging its own “fact-finding mission,” a coalition of multi-denominational religious leaders embarked on a tour of Alberta’s north to “explore moral, ethical and spiritual issues surrounding oilsands development.”

“This is unprecedented,” says Matthew McCulloch, director of corporate consulting services with the Pembina Institute in Calgary. “It speaks directly to the role of business in society.”

And what does it say? Companies – and, frankly, analysts like McCulloch – are still struggling to work out the details, but the shorthand is simple: corporate decision-makers are being watched, judged and will be held accountable for their actions… or lack thereof. Even here in the Wild West.

It wasn’t much more than a year ago that Total S.A.’s chief executive Christophe de Margerie described Alberta to the National Assembly in Paris as “the most cowboyish” among oil-producing jurisdictions. Now, while other jurisdictions promote “green” policies and technologies, the Alberta government is sinking $25 million into a rebranding campaign that, despite its efforts to remediate the reputation of the oilsands, will likely leave the province still looking defiant and unyielding – yes, more cowboyish, if you like. Increasingly, such PR efforts aren’t enough. What matters now more than ever is environmental and social accountability, which means a willingness to take responsibility for impact on communities, and, basically, the ability to clean up one’s act in real, demonstrable ways. And that isn’t because industry is experiencing more top-down pressure from governments, whether our own or that of (whale-hunting) Norway. Today, the real pressure is coming from the ground-level stakeholder.

How does a corporation make decisions in such an environment?

Denise Carpenter, until recently senior vice-president, public and government affairs with Epcor Utilities Inc., has a snappy answer: “Transparently.”

OK, it’s a little more complex than that.

“Our strategy has been to anticipate and communicate,” explains Carpenter. “We believe our stakeholders and neighbours are important, and we should engage with them long before we start development.”

Epcor’s current engagement philosophy with its stakeholders, says Carpenter, is rooted in a refutation of the traditional polarization into Us and Them. “In the society we live in today, we are they and they are we,” she stresses. “We really have to conduct ourselves that way.”

“We are they and they are we.” And not just in the defined geographic community in which a company may be operating and building. “In the 21st century, there is no such thing as an individual backyard,” says Carpenter. She points to the global uproar over the Alberta oilsands as a prime example, but hardly an isolated or even extreme one. “With the help of cellphone cameras, YouTube, Facebook, Twitter and similar social networking tools, local events can become international stories in moments,” she says.

It Ain’t Easy Going Green. Or is it?

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