After all these torn shirts, what can we add about the unfortunate speech in English by the CEO of Air Canada? Perhaps because the emotion of the moment has subsided, it is interesting to reexamine this event through the lens of ESG glasses (for environmental, social and governance criteria).
The speech and his defense by Michael Rousseau were seen as an offense against Quebec nationalism, a flashback to the years that were believed to be over for the unilingual saleswoman at Eaton.
The event surprised. Anglophone leaders in Montreal’s business community are generally bilingual, the refractories having flown a long time ago. The exceptions are most often managers newly recruited from outside Quebec.
Air Canada could not flee to Toronto, because the maintenance of the head office in Montreal and the respect of the Official Languages Act are the two conditions imposed on its privatization in 1988. The company endures them like a punishment, as the repeated criticisms of the Office of the Commissioner of Official Languages attest.
Disembodied citizens of the world
In its sustainable development report entitled Citizens of the world, Air Canada has drawn a diagram illustrating the relative importance of its various ESG issues. The top five are security, economic performance, data and privacy protection, ethical business practices and policies, and customer trust. Energy consumption is only ninth!
“Social conscience” figures even further down the diagram, clearly in the blind spot of its CEO and board.
In the abstract, we are all citizens of the world, as in the Air Canada report, especially when we think of global threats like climate change. However, we are above all citizens of local communities and specific nations in our identities, our attachments and our solidarity. Let us not see any contradictions there, because multiple identities are specific to modern societies, thinks the philosopher Charles Taylor.
Air Canada should be attentive to cultural differences, which allow Montrealers, Quebeckers and Canadians to visit the world and welcome it in return.
However, with its head office in Montreal, not knowing or respecting the linguistic sensitivity of Francophones – here a manifestation of the “S” in ESG – constitutes willful blindness. For a carrier concerned about its image, this is also a governance fault which, this time, calls into question the last letter of the acronym.
Learn the right lessons
We hope that the speech will serve as a lesson, which will lead to more substantial changes than the only French lessons that Mr. Rousseau promises to follow. Scandals and crises are events that should not be spoiled. They reveal negligence, loopholes and sometimes even serious, underestimated or unrecognized problems, which require a more serious pushover than flat apologies or sloppy ads.
Sustainability or social responsibility reports published by companies are even more often beautifully illustrated marketing tools than a rigorous source of information for investors. Air Canada’s is a good example; you have to dig elsewhere to find the measures of your carbon footprint.
The upcoming creation of the International Sustainability Standards Board (ISSB) will standardize the disclosure of ESG information, which will be made mandatory by regulators, and will greatly facilitate the decisions of investors who want to avoid bad risks and take advantage of the business opportunities offered. by responsible companies.
Remember that this ISSB will establish in Montreal an office as important as its headquarters in Frankfurt, promised Erkki Liikanen, president of the IFRS Foundation, initiator of the project.
Yet blunders like Mr. Rousseau’s are unlikely to end up in corporate disclosure, despite upcoming international standards, even if they are sometimes a sign of a management problem.
The case before us made headlines in Canada and even that of Wall Street Journal. But not all of these events have this visibility.
That’s why investors are increasingly turning to artificial intelligence (AI) to analyze masses of qualitative, unstructured information drawn from sources all over the world, including social media. Is there an overflow from a toxic tailings pond in South Africa? A strike in France? Does a satellite detect methane fumes from a factory in Brazil? We don’t want to wait for the next annual report to find out. Unfortunately, current tools are limited to English sources.
The financial center of Montreal has resolutely taken the turn of sustainability and, for some institutions, for several years already. Better yet, we are now witnessing a merger with our renowned AI ecosystem to develop new forecasting tools – hopefully multilingual – that will complement traditional financial analysis.
This information is essential, as the value of companies increasingly depends on intangible assets such as brand name, reputation and ESG issues. The crises that occur can affect the perception of this value.
Coincidence? Air Canada stock has lost about 12% since its CEO’s speech, but so have rival companies. In the Rousseau affair, the fault shocked Quebecers, but its seriousness has not yet passed the test of financial materiality, in the sense of affecting the future profitability of Air Canada. The ESG criteria of sustainable finance will not save us from stupidity.