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Canada's 'green economy' too narrowly defined, TD Bank suggests

The green economy encompasses everything from wind power and hybrid cars to the promotion of reusable shopping bags.

Fernando Morales/The Globe and Mail

When people think of Canada's "green economy," they usually consider wind power companies, solar cell makers and other developers of clean technology.

That drastically shortchanges work undertaken in other sectors, as corporations find that environmentally driven decisions can help save money and attract talent, a new report suggests.

Negative perceptions attached to oil sands development mask the environmentally progressive strides taking place across a wide range of Canadian industries, says the report from Toronto-Dominion Bank's economics department, to be released Wednesday.

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"When we talk about the green economy, it tends to be a narrow definition that includes certain industries and certain activities," said TD chief economist Craig Alexander, one of the authors of the report. "But if you think about all the different sectors of the Canadian economy, you can see evidence that all of Canada's industries are making efforts towards changing their practices and becoming more environmentally sustainable, or reducing their environmental impact."

This shift in attitude ranges all the way from the promotion of reusable bags in grocery stores to the marketing of electric and hybrid cars, Mr. Alexander said. "When all that is included in the green economy, we are seeing more progress than people are aware of."

The more inclusive approach to gauging the value of environmentally focused efforts, including all expenditures and jobs created, isn't yet quantifiable, he acknowledged. Eventually, that will happen, he said. "There are things you could do to measure the greening that is taking place. It is just that our statistical systems are not designed and set up that way."

There have been some efforts to try to quantify corporate environmental efforts, such as the Global Reporting Initiative, a non-profit organization that sets standards for sustainability reporting.

Over all, Mr. Alexander said, a broader approach to the green economy would encourage the public to see business and the environment as complementary, instead of pitting economic growth against environmental concerns. "Many businesses are discovering that they can save a lot of money by thinking about more sustainable practices [and] operational efficiency."

The TD report outlines the stages that companies go through as they become more green in their activities.

First, they will respond to mandatory government regulations. These are important because many costs to the environment are often not embedded in market prices, Mr. Alexander said. Some companies will then go further, and implement changes in order to save money or to become more efficient – this could entail changes as simple as reducing lighting or heating costs. Finally, some organizations encorporate green products or completely change their business models to embrace environmental issues.

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Companies make these shifts for a variety of reasons, Mr. Alexander said, but one key motivator is that younger employees want to work for environmentally aware employers. "Companies that want to hire talented people need to be associated with good practices, not bad ones."

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About the Author
Reporter, Report on Business

Richard Blackwell has reported on Canadian business for more than three decades. At the Financial Post and the Globe and Mail he has covered technology, transportation, investing, banking, securities and media, among many other subjects. Currently, his focus is on green technology and the economy. More

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