2 new reports on sustainability jobs and compensation in Canada

In our annual State of the Profession report, we track how the role is evolving for sustainability professionals, especially in terms of compensation, job responsibilities and leading trends. The focus has been primarily on large U.S.-based companies and full-time sustainability professionals.

Two studies have just been released that highlight trends in the sustainability profession in Canada. Each of these reports looks at the impact of sustainability programs on the workforce in different ways -- one in terms of job growth and the other on executive compensation. While both reports offer unique perspectives, the conclusions are unexpectedly similar. The current state of sustainability appears to be much more about avoiding risk than creating opportunity.

Eco Canada’s report, “Careers in Sustainability: Current Job Trends and Future Growth,” offers some optimism for emerging sustainability professionals. In a survey of 658 Canadian organizations, 37 percent have employees working in environmental, social or economic sustainability.  Even better news: 84 percent of sustainability consulting firms and 46 percent of other sustainability employers plan to increase their staff in the next three to five years.

Looking at sustainability from a slightly different perspective, Strandberg Consulting released its “Sustainable Pay” research and takes a deep look into how large Canadian companies are compensating executives for sustainability performance. While this is very much an emerging issue, Strandberg’s report provides a valuable benchmark as more companies around the world investigate how to tie executive compensation to nonfinancial metrics.

Canadian Careers in Sustainability

Eco Canada is Canada’s largest online resource for environmental jobs, training and certification. The firm’s newly released report defines a sustainability professional broadly as a practitioner who spends at least 50 percent of his time performing activities related to environmental, economic or social sustainability. Using that definition, the firm has identified 50,659 sustainability professionals currently working in Canada. The distribution of this sustainability workforce includes only 10 percent in large enterprises while governments employ 27 percent of the sustainability workforce, research institutions and nonprofits employ 24 percent, and 25 percent are employed by “other.”

The broad base of organizations surveyed is important to consider when the average top salary for a CSO is reported as C$105,119, about half of his or her counterpart in the United States. This compensation disparity is most likely due to Eco Canada’s small percentage of large enterprises surveyed.

The bulk of the Canadian sustainability workforce, roughly 70 percent, is made up of what Eco Canada refers to as sustainability specialists. As an addendum to the report, the firm provides job profiles of seven unique roles in the sustainability workforce, including that of the sustainability specialist. Highlighted in much of the description of the sustainability specialist role is the job of developing procedures to meet regulatory requirements and address risks associated with environmental degradation along with setting strategy and engaging stakeholders. Overall, 57 percent of the organizations surveyed count on sustainability professionals to manage risk while only 39 percent of them looked to these professionals to help drive business growth.

Sustainable Pay

The Strandberg report looks at the 60 large Canadian public companies that make up the Toronto Stock Exchange’s TSX60 and analyzes the degree to which these companies integrate sustainability factors into executive compensation. Strandberg’s research shows that executive sustainability compensation is an emerging area of both sustainability and compensation practice.

One of the key takeaways of the research of TSX60 companies as well as a broad range of multinationals is that there are no universal standards that link sustainability metrics to executive pay. This means that boards, executives and their compensation advisers lack benchmarks and best practice to guide their efforts in this area.

Where there were metrics identified by the TSX60 companies, safety was the most frequently used followed by environmental metrics. As Strandberg notes, there is an overreliance on backward-looking and compliance-oriented sustainability metrics with a focus on protecting corporate value and mitigating risk. There were very few metrics focused on creating value and enabling new opportunities for a company’s growth. In Strandberg’s review of other international companies, Canada is neither ahead nor behind in terms of sustainability informing executive compensation practices.

The report saves the best for last, providing advice to those constructing sustainability incentives for their executives. In addition to profiling best practices from companies such as DSM, Intel and BASF, the report concludes with the following advice:

First, materiality should be reviewed to determine which issues to focus on. Companies should then set a sustainability strategy that includes goals, targets and success metrics. Finally, sustainability metrics should be sufficiently diverse to reflect the corporate sustainability strategy, yet focused on its key metrics to ensure clarity and focus toward top goals, rather than diluting the incentive suite. Strandberg suggests companies consider balancing metrics that create value with those that protect value.

Both Eco Canada and the Strandberg Group provide timely research about the growth of the sustainability profession in Canada. More importantly, they emphasize the need for companies to focus more on value creation while continuing to mitigate risk.