By Alex Fulthorpe, Executive Vice President, Blackstone
The more time I spend traveling around the globe, the more I recognize the opportunity Canadian business owners have to be seen as leaders in Industry. ESG (Environmental, Social and Governance) criteria is a group of standards that can support in determining the value of an investment. They are often brought to light when a company has been exposed in an extreme event that has affected a company’s reputation, or has eroded shareholder confidence. Often these are retroactive evaluations of a company’s ESG deployment. To be a good competitor a company needs to be proactive. Static policies and guidelines can’t be all that we live by; as in sport, the rules of the game are only part of the story-–sportsmanship and team values are equally important. What does ESG look like on an ongoing basis? And, financials aside, is it enough of a standard to measure the performance of a company?
Among other things, we’ve been pondering these questions at Blackstone Industrial during the pandemic this year. Like any business, we’re always challenging the way we do our work, searching for ways to raise the bar. Under the banners of ESG, we always aim to increase value for our partners, our clients and the communities. There is no question, staying focused on genuine ESG factors makes Blackstone a more valuable organization; however, these concepts are already built into our existing core values and policies and are not pretentious guidelines. We believe ownership of our own version of ESG has allowed us to stay on our growth trajectory, even during this volatile time.
Blackstone was built to maintain and repair existing industrial facilities and take care of pipeline and petro-chemical industry assets. Our work isn’t only about maintaining what already exists; our ongoing investment in engineering and technology, new design, retrofits and modeling, support the reimagining of machinery and upgrades that are part of an environmental trajectory for continuous improvement of our industry. In a sector that will be starved of capital for some time, we must support the facilitation of maximizing utility.
For Blackstone, the social aspect of ESG has been about communities gaining momentum. If you have someone who is technically inclined in the region where you are stationed, why not build expertise in the community? Policies are necessary for setting those global standards, but under the social umbrella of ESG, policies do not make up for the work that needs to be accomplished on the ground. Honest relationship building comes from being onsite, feeding the spirit of collaboration and competition, and working on business models designed to provide equity for all involved. Building strong communities and training each other defends our industry from foreign influence while being a model for social awareness.
When it comes to governance, we’ve chosen to work with organizations who share our core values. Our acquisition playbook has been dependent on writing some of our own rules with our partners, especially our Indigenous partners. We’ve also relied on advisors and those who have put their own strategies into action before us. Most important is knowing how our decisions will impact people. From the beginning, my mentors have drilled into me the covenant of high integrity, compliance and transparency—Blackstone does business one way—the right way.
There are a number of questions we’ve been contemplating. Do ESG policies push us to be the best we can be? Are they meaningful differentiators if many that apply them are disingenuous? How do we build the most meaningful and strategic relationships that return holistic value as well as financial value? Do our solutions support good stewardship and Canadian love of the land?
Developing mindful proactive commerce has been challenged in these difficult times. Major machinery upgrading, biodegradable chemistry—these are complex solutions that require multiple meetings and face-to-face communication. The velocity of ideas and money changing hands has slowed. In our industry, it feels like there is a loss of communication on many fronts. Now, more than ever, community matters.
Yet, we have chosen not to stand still, but move forward with our growth plans, despite this year’s volatility. Acquisition has allowed us to expand services and offerings, but ESG, in that sense, doesn’t provide the knowledge needed to know which way to go, and what decisions are best for Blackstone. ESG shouldn’t be some mechanical equation applied to satisfy metrics. It’s about creating a competitive edge, having integrity and being compliant and doing things with a strong moral compass. We can only know these things through keeping an open mind, educating ourselves and listening to gut instinct.
I have been privileged enough to travel the world, and what is most apparent to me is our opportunity to be leaders in business and industry in Canada. Growing up, and in University, I had the opportunity to be part of several great Rugby institutions. Rugby is an extremely rough game, but then we shake hands and have a beer when the game is over and leave what happened on the field, on the field. In business, it’s important to be the same way. We have the capacity to nurture, as well as be warriors, be brutal, but polite, and take ownership of ESG in ways that align with our own business core values, every day.