Director Spotlight - Gianna Manes

Director Spotlight is a regular feature that provides an opportunity for a prominent director to discuss practical insights and critical developments on climate governance important for boardrooms. Chapter Zero Canada recently spoke with Gianna Manes, Director, Fortis Inc., Keyera Corp. Here are the highlights of our recent discussion with Gianna about the growing complexity of the policy landscape, the evolution of boardroom climate discussions, and the importance of aligning long-term sustainability with competitiveness and resilience.

In today's current geopolitical climate, what are you seeing as the main challenges for organizations that are wanting to continue taking climate action?

I serve on boards where we're having conversations about climate and sustainability as much as, or more than, we ever have. The discussions haven’t stopped- the nature of them have changed. There are a number of challenges that boards are facing. One of the main challenges is the uncertainty and the inconsistency of policies and regulations and disclosure requirements and expectations that we're seeing across jurisdictions. I have experience in both Canada and the U.S. so I am well aware that there have always been differences between the two, just like there are differences between individual states and between provinces. But what makes this particularly challenging today is the extent of the divergence of the two countries’ climate policies, actions and expectations. This has really accelerated in the last year and is challenging for companies, particularly those that operate on both sides of the border.

Even companies that are only Canadian but have markets outside of Canada, like some companies in the oil and gas industry, for example, are really challenged by this divergence. They are trying to balance all of the expectations, regulations and rules across a number of jurisdictions, while at the same time, trying to remain competitive and create value.

The divergence in terms of policy and regulation and the uncertainty around future direction, have also made the approval process challenging especially for large infrastructure projects as an example. It makes it particularly difficult to make decisions on capital investment. Any time you have that degree of uncertainty, it makes the decision process harder, slows projects down, and in many cases, it will limit the scope. It prevents full-on investment and climate action that an organization might otherwise take. My thinking is that for companies and for boards, taking a long-term, strategic and pragmatic approach is helpful. While the speed at which you are taking the steps may need to adjust, stay the course. I believe it’s important that companies don’t just see-saw back and forth based on the policy or regulation of the day. It is the role of directors to ensure that the long-term sustainability of the company remains intact and central to decision making. So keeping a long-term view is the most practical way I see to deal with the challenges that we are seeing right now.

Within boardrooms of organizations that wish to continue progressing on climate action, what kinds of discussions do you think are happening in the boardroom?

I think one of the primary responsibilities of the board is to exercise governance over the strategic direction of the company. Another is overseeing risk, which is managing the downside effects of risk, but also leveraging the potential that lies in uncertainty and risk as well. Risk is not always a bad thing; taking the right kind of risks is what you must do. From my own observations, and from discussions with peers on other boards, over the past few years, the nature of the bulk of climate-related discussions has expanded from target-setting and reporting to more emphasis on investments and actions that enhance business resiliency in the face of what we're experiencing with regard to climate events.

I work in industries in which weather has a big impact on infrastructure. We are seeing the incidents of weather events, such as drought, wildfire, hurricanes and other extreme weather events, increasing. There is a lot more discussion in the boardroom about incorporating into the strategy, resiliency investment and how you balance that in terms of shareholder, stakeholder and customer needs while keeping your product affordable as well. So those are more the conversations that boards and management are having today, vs. target-setting.

Given recent and emerging developments/trends, what do you think the short-term and long-term landscapes are looking like for corporate climate action and reporting in Canada?

I think the anti-green washing legislation in Canada has had a fairly significant unintended impact, such that many companies have significantly pulled back on disclosure because of a concern with the risk of such disclosure, even though their intention and their actions were likely fine. I would say the increased reluctance to disclose is unfortunate, because it remains important for shareholders and stakeholders to have visibility into the decision-making processes.

I am hopeful that one of the trends that continues is more streamlined climate reporting focused on the data that is most relevant, and decision-useful for stakeholders to be able to understand a company. Reporting needs to continue to evolve to include more insight on resiliency planning, related investment, and how companies are prepared to manage the risks of weather events that we are experiencing.. The reporting up until now hasn’t focused as much on that.

Do you think climate and sustainability have a role in an organization’s ambitions to be more competitive and innovative?

I think that when you have the shifting sands that we have, and in particular the divergent approaches or expectations between the U.S. and Canada, that the border really does matter. What also matters is the relationship between the two and the ability to compete with each other. When you’re in a situation like Canada is currently in, the natural inclination is to pause a bit to ensure that you’re not running in one direction or the other to your disadvantage.

That being said, I think that fundamentally good, strong sustainability practises (and I use that term in its broadest sense) that are important for the long-term viability of a company, incorporate environmental actions. This goes beyond compliance of regulations and policies- good sustainability practices need to be incorporated in everything starting with your company values and purpose, strategy and operating plans. Being sustainable, and being competitive and creating long term value, are not mutually exclusive. In fact, the more a company understands and incorporates sustainability practises into decision making and strategy, and the more theybecome a part of the every day business, the better the company will do in the long-term.

Now, that doesn't mean that there won’t be competing priorities. A company is always going to face trade-offs that it will have to make in terms of capital allocation and other priorities, especially in the near-term decisions and actions. For example, in the electricity industry, some companies are not retiring their fossil fueled power plants as quickly as they expected to. Or perhaps they're building more gas plants in the near term than they expected to, but that doesn’t mean they are throwing targets and climate goals out the window- it just means they are making some near term adjustments to manage affordability and reliability, which in the case of the electricity industry, the competitiveness of the country or province relies on.

Biography

Ms. Manes currently serves on the Board of Directors of Fortis, Inc. where she is the Chair of the Governance and Sustainability Committee, and on the Board of Keyera Corp., where she serves as the Chair of the Human Resources Committee.

Gianna Manes was President and Chief Executive Officer of ENMAX Corporation, an electricity company with operations in Alberta and Maine, from 2012 until her retirement in July 2020. She has over 30 years of experience in the energy sector in Canada, the United States and Europe. Prior to joining ENMAX, she held a number of executive positions with Duke Energy, including Senior Vice President and Chief Customer Officer from 2008 to 2012.

Ms. Manes graduated from Louisiana State University with a Bachelor of Science in industrial engineering and from the University of Houston with and MBA. She completed the Advanced Management Program at Harvard University and holds and ICD.D designation from the Institute of Corporate Directors.