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Non-financial reporting: a tale of three companies.

The role of non-financial reporting has evolved since its inception in the late 90s.

Approximately 3,000 major companies in Europe have bowed to pressure from the green movement and report on their environmental policies. An increasing number of Canadian Companies - including Barrick Gold Corp., Canadian Tire Corp. Ltd., and Toronto Hydro-Electric System Ltd. - are producing non-financial reports on the web and in print to transparently communicate aspects of management, performance and corporate sustainability.

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When Barrick Gold Corp. had its annual meeting in Toronto last spring, it met a chorus of opposition. Nuns. Chilean miners and Papua-New Guinean protesters marched outside the meeting hall loudly protesting what they saw as Barrick's anti-environmental policies. Protests are a perennial risk for mining companies, and especially for companies such as Barrick, the largest gold company in the world and one of Canada's bluest of blue-chip miners. After all, Barrick is an easy target. It digs huge holes in the ground in some of the poorest countries in the world. It disrupts the local economy for a generation and then, when all the gold is gone, it packs up the mine, leaves the country and goes somewhere else. No wonder environmental groups are angry.

But that protest was quickly forgot ten because Barrick has done its environmental homework. As one of the most highly regarded corporate citizens in the industry, Barrick has banked a lot of good will on its side. Barrick works with foreign governments to lessen the impact of its mines. It injects millions of dollars into local economies. It trains and hires 15,000 local workers, sponsors local businesses, purchases its goods through local supply chains, builds schoolhouses and hospitals, and cleans up the mess before it leaves.

Barrick also tells the world about the good work it does. Never shy, Barrick has taken non-financial reporting to a new high with an active publishing program that includes a colourful magazine, a detailed corporate website, reams of online quantitative data and, perhaps its most valuable vehicle for the investment and accounting community, an annual Responsibility Report.

It's clear that Barrick takes its non-financial reports seriously. As manager of corporate social responsibility, Caroline Rossignol heads a staff of more than 200 people in Canada and around the world who carefully tend Barrick's image. The reasons are profound and subtle, self-serving yet altruistic. Barrick needs to maintain good relations with its investors and critics, with national governments at home and abroad, with local communities, with local staff and their families. If those relationships sour, Barrick would not last long in the countries where it operates.

Barrick's publications--and its stakeholders--have changed markedly since the days when it got by with an expensive public relations campaign and lots of big-budget philanthropy. Governments and NGOs are still key stakeholders, of course, but modern regulators and equity analysts now demand large volumes of environmental and social data, and independent audits to certify the numbers are accurate.

Environmental risk became a major component of these reports after the grounding of the Exxon Valdez in 1989. The BP Plc oil spill in the Gulf of Mexico last year raised the ante by several notches, and placed even greater pressure on Barrick to produce a satisfactory non-financial report.

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"We get inundated by profiles by financial analysts and environmental and social rating agencies ... They are very educated, very informed. But they are also very subjective. It's a learning curve for us."
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Author:Bertin, Oliver
Publication:CMA Magazine (Mississauga)
Date:Mar 1, 2011
Words:577
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