LBG CANADA Quarterly – December 2009

Ontario Securities Commission Consultation Calls for Comparable Social Performance Data

Last April, a private member's bill was introduced to the Ontario legislature by Liberal MPP Lauren Broten (Etobicoke-Lakeshore), calling upon the Ontario Securities Commission (OSC) to conduct a consultation on best practices on corporate social responsibility (CSR) and on environmental, social and governance (ESG) reporting standards.

The second of two OSC consultations was held December 7th, with a specific focus on whether mandatory or voluntary reporting on corporate social performance should be encouraged for companies in Ontario. The meeting was co-hosted by Jantzi-Sustainalytics and the Hennick Centre for Business and Law at York University. Given that LBG Canada is one of the few organizations recognized for comparable metrics within corporate social performance, Stephanie Robertson was asked to represent LBG Canada in these discussions.

Roundtable participants began their conversation by acknowledging the growing interest in corporate social performance. Reference was made to the 67 shareholder resolutions addressing aspects of corporate social performance that have been filed in Canada between 2000 and 2009, 66% of which touched upon the need for enhanced reporting . Reference was also made to the key papers and initiatives that have brought investors and analysts together in order to build shared agreement on the materiality of CSR to shareholders (the list of papers can be found at bottom of newsletter).

Throughout the dialogue and debate on December 7th, the issue of the need for comparable social performance indicators resurfaced time and time again. This was a fascinating conversation to be a part of, as both SiMPACT and LBG Canada companies understand that comparable indicators require 1) a commitment to uphold commonly understood principles that guide how each indictor is tabulated; 2) access to a knowledgeable and impartial third party when the application of a principle is not immediately clear; and 3) regular evolution of the principles so that they are applicable within an industry context yet consistently upheld.

While it may be too soon to expect agreement on the breadth of social performance that companies should be mandated or strongly encouraged to report, it is true that the LBG Canada approach is currently one of the few, if not the only, source of comparable social performance data presented in Canadian corporate reporting. This interest in social performance reporting is an opportunity for LBG Canada companies to share their knowledge in how comparable data can be developed and reported, as it is also an example of the leadership role already played by companies benchmarking and reporting on their community investment expenditure using the LBG Canada approach.

Papers of interest

Mercer White Paper, "Shedding Light on Responsible Performance" (2009), online http://www.mercer.com/ri.
UNEP FI: Work Streams, AMWG, The Materiality of Social, Environmental and Corporate Governance Issues to Equity Pricing (2004), online: UNEP http://www.unepfi.org/work_streams/investment/amwg.
UNEP FI: Work Streams, AMWG, Show Me The Money: Linking Environmental, Social and Governance Issues to Company Value, (2006), online: http://www.unepfi.org/work_streams/investment/amwg.
UNEP FI: Workstreams, AMWG Demystifying Responsible Investment Performance" (2007), www.unepfi.org/publications/investment/index.html.

Initiatives of Interest

United Nations Principles for Responsible Investment http://www.unpri.org/
Australian Council of Superannuation Investors http://www.acsi.org.au/
Enhanced Analytics Initiative http://www.enhanced-analytics.com

How to Prepare for Benchmarking

The 2009 benchmarking season has begun and many companies are eager to get a head start on submitting their benchmarking data. For those who have not yet participated in a Preparing for Benchmarking webinar, the next session has been scheduled for Jan 12, 2010. Participants can register using the link provided in the Upcoming Events sidebar.

In addition, here is a step-by-step guide on how to get prepared...

1. Send your CI Expenditures to SiMPACT
(Nov. 1 to Mar. 1)

Once your 2009 budget has been fully allocated (or is close to being fully allocated!), send your data to SiMPACT for review. You may send your data in any excel-formatted document, or you may enter your contribution data manually into the LBG Canada Data Collection Tool.

SiMPACT will review each expenditure on a line-by-line basis in order to ensure that each investment upholds the LBG Canada Principles. If there are any questions about whether your data fulfills these principles, SiMPACT will review them with you via phone call or in person.

2. Complete the Benchmarking Survey
(Jan. 15 – Mar. 1)

The 2009 benchmarking survey asks questions regarding ten different pieces of your company's CI strategies and policies, including types of contributions, employee programs, reporting activities, etc. The survey will be sent to the main contact at each company on Jan. 15 or upon request. This year, participants are not required to input their benchmarked data into the survey. Depending on the scope of your CI programs, this survey will take anywhere from 90 min. to 4 hrs.

If you have any questions regarding the benchmarking process or how to get started, please contact us at 403-444-5683.

The benchmarking results will be presented at the Annual Benchmarking Meeting in Calgary on April 7 & 8, 2010. Of particular interest, the results of the recently expanded employee volunteering section will be examined. Employee volunteering has become a core element of LBG Canada's benchmarking program and companies will gain essential insights into management information needed to support a successful employee program.

A New Approach to Value Community Sponsorship

Valuing community sponsorship is an important issue for many LBG Canada companies, and SiMPACT has been working with the LBG Canada Valuation Sub-Committee to address how to approach this valuation challenge.

Examples of sponsorship of not-for-profit and charitable partner activities are wide ranging – from full-scale events to logo placements in community hockey rinks. As a result, it is necessary for LBG Canada companies to define which sponsorship activities are eligible for inclusion within LBG Canada benchmarking and how to value this form of community investment.

In order to inform this discussion, SiMPACT has been researching sponsorship best practices such as those presented by IEG Sponsorship and the Western Sponsorship Congress. With the support of the LBG Canada Valuation Sub-Committee, SiMPACT has begun developing a definition of 'community sponsorship' as well as a standardized approach for valuing community sponsorships. This approach takes into consideration whether the value of the business benefit achieved by the investor needs to be acknowledged.

This approach will be shared at the Benchmarking Meeting in April. A description of this approach can be found in the 'Valuation Sub-Committee' section of the participants' site at www.lbg-canada .ca. It will be tested out during the coming benchmarking season and revisited in the spring of next year.

Result of the Valuation Vote

The results are in for the 2009 Valuation Vote. There was a 100% participation in the vote and we thank everyone for partaking in this important process!

All of the Valuation Sub-Committee recommendations received more than 65% support from LBG Canada companies, therefore have been confirmed as LBG Canada Principles. The full record of results and comments will be posted to the participants-only site in early January.

A special thanks goes out to the member of this year's LBG Canada Valuation Sub-Committee: Joanne MacDonald from EPCOR, Darren Haines from Coast Capital Savings, Roshan Kastrinos from Enbridge, Ashley Cormier from Suncor Energy and Charline Boudreau from ENMAX.

Some of the sub-committee members will be moving on from the committee next year and we will be looking for new volunteers at the next benchmarking meeting. If you have any interest in joining, please contact Julia Mathison at .

Updated LBG Canada Focus Areas

LBG Canada has recently adapted its focus areas to better reflect the progression of themes currently used by Canadian companies. Some of the additions to the focus area list include: Employee Program, Aboriginal People, Diversity and Disaster Relief.

Thank you to the companies that provided their feedback on the focus area revisions. Click here to view the full list of LBG Canada focus areas and definitions.

Volunteer Canada's Online Portal Now Accessible to LBG Canada Companies

As part of LBG Canada's partnership with Volunteer Canada, companies now have access to the newly launched Centre for Excellence in Corporate Community Involvement. The Centre is an online, membership-based resource for companies interested in research and best practice to support the development of effective employee volunteering programs.

To log-in, visit www.corporatevolunteering.ca, select 'Enter Social Community' on the upper right section of the page, select 'Signup' and follow the instructions.