July 4, 2005

EDC proposes new environmental policy, amends review directive, issues first CSR report

Export Development Canada (EDC) has drafted a new environmental policy clarifying its commitments in all areas where it conducts environmental assessments. At the same time, the Crown corporation has also released proposed amendments to its Environmental Review Directive (ERD) and disclosure policy and has initiated an 80-day comment period on its proposals, running to September 16, 2005.

EDC provides trade finance and risk management services to Canadian exporters and investors in up to 200 markets worldwide. Its new environmental policy will integrate all of the corporation's policies, practices, roles and responsibilities that support EDC's commitment to be conscientious about the environmental impacts of its business.

The ERD defines the process EDC follows in conducting environmental reviews of projects for which it considers providing support, as required by the Export Development Act. The disclosure policy outlines a formal set of disclosure practices intended to strike an appropriate balance between the release of information relevant to EDC's public accountability and the need to respect the commercial interests of its clients.

The new policy reflects recommendations made by the Office of the Auditor General in its 2004 examination of EDC's environmental practices as well as changes to the OECD's Common Approaches on Environment and Officially Supported Export Credits and EDC's own experience implementing the ERD since its introduction in 2001.

"The new Environmental Policy responds to both evolving international trends in environmental review and recommendations by the Auditor General," noted Stephen Poloz, EDC's senior vice-president and chief economist, who is also responsible for the agency's environmental advisory services.

Among the key proposed changes are:

Eliminating "compelling socio-economic considerations" as a rationale for approving projects that do not meet ERD requirements. EDC has never invoked this rationale since the ERD came into effect.

Examining the simplification of ERD requirements in G-7 and other countries, where projects meet or surpass internationally recognized standards. EDC has engaged a consultant to conduct an independent evaluation and make recommendations in this area.

Disclosing the specific environmental review standards used in evaluating specific types of projects supported by EDC.

Clarifying that the ERD does not apply where EDC support is for exports not related to a specifically identified project, as in the case of some corporate facilities or syndicated financing. In such cases, EDC will still undertake its own environmental risk assessment.

The proposed new environmental policy, along with the draft amended ERD and disclosure policy may be viewed on the EDC Web site, www.edc.ca, through which comments may be submitted as well.

Input received during the public comment period will be presented to EDC management, its advisory council on corporate social responsibility (CSR) and its board of directors for consideration. The corporation will also make a summary of the comments received publicly available.

Also just released by EDC is its first Corporate Social Responsibility (CSR) Annual Report, and its third Chief Environmental Advisor's Annual Report, the latter reporting on transactions in 2004 that were subject to environmental reviews.

"EDC is proud to have taken our CSR commitments to the next level by issuing its first ever CSR Annual Report, which was developed through benchmarking against other CSR reports and international best practices, as well as consulting with CSR experts and our stakeholders," said EDC president and CEO Rob Wright.

The CSR Report focuses on EDC's efforts and accomplishments in the areas of business ethics, transparency, environment, community involvement and organizational climate. It also establishes the criteria by which CSR performance will be measured, providing for quantifiable data for the 2005 report. In all, 13 performance measures were created to clearly identify how EDC intends to carry out its mandate in 2005 in a socially responsible manner consistent with its corporate values.

In the 2004 Chief Environmental Advisor's Report, EDC summarizes its performance in the two key areas of outreach/business development activities and environmental review and. The report notes that through its EnviroExport Initiative, EDC helped 249 mostly small- and medium-sized Canadian companies export more than $825 million worth of environmental goods and services. Most of these exports went to markets in Africa and the Middle East, and in North America and the Caribbean.

The report also discusses actions resulting from the key findings of the Auditor General's 2004 review of EDC's environmental review practices, which noted major improvements in the area of environmental review over a similar audit conducted in 2001. Finally, EDC reports on 11 transactions which were subject to its ERD.

"In 2004, EDC continued its partnership with international financial institutions to push for greater harmonization of global environmental standards," says EDC's chief environmental advisor Art FitzGerald,. "Our positive results in transactional environmental review reflects diligence and hard work in a team effort by environmental specialists and our business teams, in addition to strong support from our legal departments and senior management."

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