Chris Henderson isn't sure when the soul of sustainable development shifted from the boardroom to the backroom, but he is certain that the business of doing good today is as competitive as any other industry.
Packed snugly into a late-Victorian brick house in downtown Ottawa, Henderson's Delphi Group spends most of its time assessing and advising on environmental misuse and how to mitigate its effects. The mission isn't rare; there are hundreds of environmental consultancies in Canada. But Delphi is one of only a handful of private-sector firms battling to convince clients that idealism only works if it gets market results.
"This is a nice business, very progressive. But make no mistake, this is a business about money and it's tough to survive," Henderson says. "Some of the best NGOs (non-governmental organizations) in Canada are run by the toughest people."
From the start, he's tried to show customers that earning profit and creating a sustainable world aren't mutually exclusive. Ironically, this is easy compared to generating cash flow in an industry highly susceptible to the vagaries of politics. So Henderson aimed right at the heart of policymakers, figuring if he provided information that would make their lives easier, their hearts and wallets would follow.
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| Chris Henderson |
With 16 employees and $1.5-$2 million in annual revenue, much of Delphi's work is proprietary. This includes a model defining the economic impact of climate change that Environment Canada and Natural Resources Canada use to create new legislation. Another is an assessment for renewable-energy markets that the Ontario Ministry of Energy relies on to find solutions for its current power crisis.
Henderson also is managing director of the EXCEL Partnership, which is made up of large Canadian companies, such as Alcan Inc. and TransAlta Corp., that are trying to improve environmental performance. "We've done more environmental research in the past 10 years than any other company in Canada," he says.
It's this research that the public and private sectors are increasingly choosing to weave into their decision-making.
"This is the thing that struck me about Chris when I first met him in India," says Ken McCready, former CEO of TransAlta and now senior policy adviser to the Energy Council of Canada. "He understood that economic instruments, not political agendas, are the way to engage the (sustainable development) market."
Delphi incorporated about 15 years ago, bringing together a group of somewhat disgruntled NGO employees who understood, integrally, Henderson's view.
The thought wasn't new. Attaching real value to environmental resources - better known as ecological economics - has been around since the 1920s. The United Nations' Millennium Ecosystem Assessment, due for presentation this spring, will be the first document to draw all the strings together. Even so, getting governments and companies to work it into their spreadsheets will be another matter altogether.
"In Canada we're led by government that is politically neutered when it comes to sustainable development," Henderson says. "They've never developed clear, well-crafted policies that can let the forces of entrepreneurship make it worthwhile.
"This stuff is complex, and we're never going to get anywhere unless we know what we want and then use the market to get it," he says.
He uses the example of carbon-credit trading as an encouraging tool for climate-change mitigation, but one that has yet to gain any traction because no one seems able to view carbon emissions as a commodity, even though a trading system for sulphur works well in the United States. Stakeholders there were able to set a baseline of what they wanted to achieve and then quantify emissions like so many widgets on a retail shelf.
Early in its existence Delphi made a splash in India by attracting $125 million, mostly from U.S. banks, for the India Environmental Technology Fund. But before any projects could get under way, Delphi was shuffled aside.
"Eventually we got kicked out because we were too small and couldn't play the equity game," Henderson says.
The market didn't trust a Canadian firm with little on-the-ground experience, and that lesson stuck: Go big or go away. Big was not what Henderson wanted.
Since the India fiasco, Delphi has only about 40 international projects on its books. Most are purely consultative, such as early-stage capacity building and project identification for technology transfer, and alternative-energy projects in places such as Argentina and China.
Henderson admits he doesn't like the global marketplace because due diligence is often impossible and mistakes are tough, and costly, to fix.
It has been easier to build portfolios with local clients who know and understand what a company can do.
Delphi, which sorts its projects into four categories - climate change; clean energy markets and technologies; business and the environment; and health and the environment - has a reputation that transcends its size.
"It is well-respected because it understands that sustainable development can't be successful unless it can incorporate into the business world. By working directly with business, they've been able to make that message understood," says Stephan Barg, senior corporate adviser at the International Institute of Sustainable Development, a global thinktank based in Winnipeg.
Delphi's path may help save the biosphere, but it also employs a solid business model. Delphi creates intellectual property, which creates assets that can be protected. Henderson very much favours any tool that lowers development costs and allows a firm to see its next contract earlier. This attitude is still rare within environmentally oriented companies.
"Sustainable development is a noble pursuit. I feel it's a responsibility, but spare me the idealistic platitudes. The challenge is to be idealistic and then go out and get results. If you want to get things done, you need power, coercive power, equity power, and the clarity with which to exercise it," he says. Henderson also sees a lack of honesty in the field, the kind that explains clearly what exists, what is needed and where partnerships need to be developed. Canada and its relationship with Alberta oil is a prime example.
"Alberta doesn't need a another price-control plan, or even more of the kind of awareness that Ottawa likes to talk about. It needs a rational national policy, where all sides decide what they want and accept that regulations should be performance-oriented, not proscriptive," Henderson says. "These are the forces of entrepreneurship that make any business work efficiently."
(Mike Levin can be reached at mlevin@businessedge.ca.)
