‘Rule number one was authenticity’: The story behind Aecon’s first sustainability report

Apr 26, 2021
Canadian infrastructure firm finds information gaps in the market

Early in Aecon Group’s sustainable reporting journey, the Canadian infrastructure company established some North Stars that continue to guide its actions today, explained speakers at the IR Magazine Forum – Canada 2021.

‘One of them was authenticity,’ said Yonni Fushman, Aecon’s executive vice president, chief legal officer, chief sustainability officer and corporate secretary. 

In the session, representatives from Aecon discussed the creation of the company’s first sustainability report, which was published in August 2020.

Fushman said anyone approaching sustainable reporting for the first time is faced by a wide array of stakeholders to consider. ‘We felt this tug in a million directions and thought, If we try to be everything to everyone, it’s just not going to work. And internally it’s not going to get us anywhere.

‘So rule number one was authenticity and making sure that if we were making commitments, we were making commitments we believed in, not because a peer was doing it or because we were losing points in a rating. We really needed to believe in what we were doing.’

The second guiding light was a commitment to making sustainability a net-positive for the company, said Fushman. ‘There’s a ton of opportunity here – let’s focus on the opportunity part of it, and be pretty non-invasive to begin with,’ he said.

To get up to speed, Aecon engaged with sustainability consultants and did a lot of its own homework, which included reading many reports by peers. The company also went through a process of identifying who it needed to support the project.

‘We figured out we needed somebody who was a general sustainability guru, somebody who understood and had done sustainability in the construction sector, which is our space, and then on the numbers side, a [greenhouse gas] quantification firm to really lead us through that process,’ Fushman explained.

Frameworks and agencies

The panel also heard about the challenge of getting up to speed on the different reporting frameworks and ratings agencies that operate in the complex ESG ecosystem. 

Speaking at the event, Adam Borgatti, senior vice president of corporate development and IR at Aecon, said it can be surprising to discover what information gaps exist in the market. ‘Some of them are mind-blowing in terms of what you think is well understood by the market,’ he noted.

Borgatti said a recommended starting point is to make sure you are not being negatively screened. ‘While we’re not paying attention to any one of the indices in particular, make sure you’re doing everything you can simply to get back on any grids or eliminate any misinformation out there,’ he suggested.

Companies should also engage with the investment community to find out which frameworks and data providers hold the most sway, added Borgatti. 

‘We went to all of our analysts and all of our shareholders, both fundamental and quantitative, and asked for their feedback,’ he said. ‘We asked: who do you pay attention to? Where are you getting your metrics from? What are you hearing from your constituents? [We] tried to put it all into the mix.’ 

Borgatti said it was no surprise to discover that the responses were ‘all over the map’. He said the good news was that most investors stressed the importance of speaking directly with companies as part of the research process. ‘They recognize the gaps in the reporting frameworks as well,’ he said.

The report was originally planned to launch in April 2020 but, due to the onset of the Covid-19 pandemic, the decision was made to hold off publication until the summer. Aecon’s second sustainability report was published last week. 

The IR Magazine Forum – Canada 2021 also featured sessions on future IR strategies, ETFs, crisis communications and the changing nature of brokers. Click here to find out more about the forum.

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