Overview

A year of devastating climate change in Canada hit home for the country’s top chief executives — from drought conditions affecting the grain crop to devastating wildfires in British Columbia.

“The past year was a wake-up call to the urgent reality of climate change,” said Dave McKay, chief executive of Royal Bank of Canada, who came first in the financial institutions category of Institutional Investor’s 2022 All-Canada Executive Team.

Canada was wracked by unprecedented weather events linked to the changing climate, like a heat dome that scorched British Columbia on the west coast in June, heralding deaths and wildfires. In Labrador, on the most easterly coast, spring ice hit its lowest level in 50 years, while across the Prairies, drought withered crops. McKay wrote about these weather events as they happened, sharing his perspective on how the country must meet net-zero in op-eds in the press, and he said the transition signals a key role to play for Canada’s biggest bank. He pointed to a report from RBC Economics identifying that for Canada alone it will take $2 trillion in capital over the next three decades to achieve net-zero emissions. RBC is already on the way to meeting its goal of $500 billion in sustainable financing by 2025.

“As the transition accelerates, clients are increasingly looking to RBC for guidance on their own net zero journey – from financial and investment advice, to products and lending,” McKay said.

Keith Creel, who took top place in the capital goods and industrial category, said Canadian Pacific Railway was hit hard by the wildfires in British Columbia. “While these elements are out of our control, our team remains focused on controlling what we can control,” he said. That means customer service and good management of resources, but also innovation: Canadian Pacific Railway recently announced an extension to its pilot project to develop the industry’s first zero-emission, hydrogen-powered locomotive. “A shift away from diesel locomotives is a key component of North America’s transition to a low-carbon economy,” Creel said. 

At Hudbay, the Canadian mining company primarily producing copper concentrate and zinc metal, the path to a more sustainable and energy-efficient future involves investment in technology to improve existing processes. Hudbay is deploying ore-sorting technology in Peru, allowing it to produce more metal at lower energy consumption rates while increasing output, lowering operational costs, and increasing cash flow. Meanwhile in Manitoba, where the company has been mining for more than 90 years, Hudbay is using a new copper flotation facility, which uses a first-of-its-kind circuit based on modern pneumatic flotation technology. Peter Kukielski, the top scoring chief executive in the basic materials category, said this new technology is compact, lower cost, and more flexible than previous processes.

Efficiencies like these are not just important from a climate perspective, as companies grapple with supply chain and staffing issues during the second winter of the pandemic. “The greatest challenge that will continue into 2022 is maintaining a stable workforce and maintaining the integrity of supply chains,” Kukielski told II. Copper demand is strong, he said, while new copper projects of scale are scarce. Careful management of business in this environment is paramount, especially in areas of socio-political unrest. Hudbay is one of the mining companies in Peru hit by protests that recently led the largest producer in the country to suspend operations. Kukielski cited this changing landscape as Hudbay’s biggest lesson of 2021, adding that the company engaged with ministers to gain the support of the new leftist government of Pedro Castillo for Hudbay to continue working in mining communities. “Our team in Peru has made great in-roads in terms of open dialogue at the political and community levels,” Kukielski said.

Greg Hicks at Canadian Tire Corp, who came third overall in the consumer category, said that although supply chain issues remain, they are changing over time: In 2020, it was about the supply of manufactured goods, whereas now the crisis is related to the capacity of ocean liners. Canadian Tire Corp got around these issues by chartering four of its own ships in order to meet demand before Christmas. “We’ve been making strong investments in our supply chain network and have retrofitted our distribution centers to hold more products and increase operational capacity to ensure we can keep meeting customer demand,” Hicks said.

McKay said he is cautiously optimistic about the future and expects global economic growth through the ongoing pandemic recovery in the next two years. But no one on II’s executive team is expecting the uncertainty – over the climate, the pandemic, and supply chains – to lift any time soon. “I would say that uncertainty was the defining challenge of the year,” McKay said.

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