| EC1. Direct economic value generated and distributed. |
In 2007, PotashCorp generated economic value of $4.93 billion (based on the G3 framework). This was up significantly from $3.50 billion in 2006, a reflection of the strong increase in net sales (which account for most of the economic value generated) and income from financial investments.
The economic value distributed by PotashCorp (based on the G3 framework) was $4.04 billion in 2007. Cost of goods, materials and services purchased ($2.78 billion), employee wages and benefits ($519.7 million), taxes and royalties to governments ($507.1 million), and costs incurred to providers of capital ($230.9 million) were the most significant components.
The economic value retained by the company is the difference between the economic value generated and the economic value distributed, as defined by the G3 framework. In 2007 this amounted to a record $890.4 million, up 175 percent from the $324.0 million in 2006. |
| EC2. Financial implications and organizational risks and opportunities of climate change. |
PotashCorp hired a consultant to draft a carbon management strategy. This included quantifying the emission reductions required through potential regulations, recommending compliance options, and quantifying the cost of these compliance options. |
| EC3. Coverage of the organization's defined benefit plan obligation. |
PotashCorp sponsors plans that provide pensions and other retirement benefits for most of its employees. These plans exist in all jurisdictions where PotashCorp has operations.
At the end of 2007, PotashCorp's pension plan obligations were estimated at $623.4 million, while the fair value of plan assets was $638.2 million. Plan assets consisted of a diversified blend of equity investments (64 percent) and fixed income investments (36 percent). |
EC4. Significant financial assistance received from government.
|
In 2007, PotashCorp received no financial assistance, of any type, from any level of government in any of its operations. |
| EC5. Entry level wage compared to local minimum wage for significant locations of operation. |
In all jurisdictions where it operates, PotashCorp's entry level wages are much higher than the local minimum wage, in many cases more than three times as much.
| Comparison of Entry Wage Levels to Local Minimum Wage 2007 |
| ($/hr) |
US |
Canada |
Trinidad |
Brazil |
| PotashCorp's Entry Level Wage |
13.29-18.97 |
18.80-24.14 |
5.45 |
2.16 |
| Local Minimum Wage |
5.85-7.50 |
7.16-7.86 |
1.50 |
0.74 |
| % Entry/Local |
196-324 |
263-307 |
363 |
292 |
|
| EC6. Policy, practices and proportion of spending on locally-based suppliers at significant locations of operation. |
Under its company-wide purchasing policy, PotashCorp's purchasing managers must consider the potential contribution to the local economy and to accessibility, as well as price and quality. Each production site has developed its own procedures to implement this policy.
Company tracking shows that (excluding raw materials, electricity and transportation) the share of purchases made locally increased from 52 percent in 2003 to 58 percent in 2007 (and in some years has been even higher).
| Local Purchasing |
| |
2003 |
2004 |
2005 |
2006 |
2007 |
| % of total purchases* made locally |
52 |
60 |
61 |
62 |
58 |
|
| EC7. Procedures for local hiring, and proportion of senior management hired from the local community in locations of significant operation. |
It is common practice at PotashCorp to hire local residents. Accordingly, the majority of the company's senior managers reside in and around its host communities. |
| EC8. Development and impact of infrastructure investments and services provided primarily for public benefit through commercial, in-kind or pro bono engagement. |
PotashCorp's contribution to local economies extends beyond the direct impact of employment and local purchasing. As the often dominant employer in an area, it also can affect the local economy through its impacts on educational and medical facilities, social and sports centers, utilities, and other important elements of community life. |
| EC9. Indirect economic impacts. |
PotashCorp is not yet able to present information on its indirect impacts. These impacts are substantial given the CDN $4.5 billion that the company announced it is investing in Canada between the beginning of 2007 and the end of 2012. Beyond the description provided above, the company is a major contributor to world food production. |
