Society has lost faith in the ability of the corporate world to operate openly and ethically, and all companies risk suspicion among shareholders and the community until that trust is regained, business leaders are being told.
The concept of corporate responsibility has moved beyond the “warm and fuzzy” notion of doing good things to a performance issue integral to a company’s bottom line and future prospects, a conference heard in Calgary last week.
“We’re seeing a movement to define it, to codify it . . . so companies can reassure the community that they’re following standards and are socially responsible,” said David Demers, president of energy technology firm Westport Innovations.
Demers was the moderator of a panel discussion on corporate social responsibility (CSR) hosted by the Calgary Chamber of Commerce and the Canadian Business for Social Responsibility, a Vancouver-based non-profit group that encourages businesses to integrate financial, social and environmental performance in their business practices.
Demers said there is ample evidence to show that companies incorporating CSR into their daily business practices will, in the long run, outperform competing companies in results, stability and the ability to survive a crisis.
He illustrated his point by comparing two airlines, financially troubled Air Canada and Calgary-based WestJet. Last week the latter announced plans to sell $125 million in new shares in order to grow its fleet more quickly than expected.
“I would suggest they (the two companies) have very different future prospects,” Demers said. Based on recent reports, “I think it’s easy to predict that one management team is more concerned about its relationship with stakeholders than the other management team.”
The forum at the Telus Convention Centre also heard from three local companies considered to be on the leading edge of CSR: Nexen Inc., EnCana Corp. and First Calgary Savings.
While Nexen has been considered by many as a trailblazer for corporate responsibility, EnCana is poised to ride the “smart second wave,” said Patricia McCunn-Miller, vice-president, environmental and regulatory affairs.
EnCana has drafted its own “corporate constitution” outlining its values and beliefs as a company. “We can’t do it all at once, but we have started,” she said.
A company’s “social licence” to operate has become integral to success, said McCunn-Miller. Stakeholders – including investors, community members, employees and regulators – expect businesses to generate profit responsibly, and in turn, companies can reap the rewards of improved access to capital and flexibility of operations.
“I think corporate responsibility is a smart way to do business,” added McCunn-Miller. “We think the time is right for this policy implementation.”
But a company doesn’t always have to implement formal CSR policies to capture the spirit of the trend, believes John Dundas, vice-president of marketing and strategic planning for First Calgary Savings.
“We believe in the concept of shared responsibility,” he told the forum, including accountability to member-owners, community investment and committed employees who not only communicate the company’s best practices and values, but adopt them as their own. “We find we have a truly ingrained approach” to CSR, Dundas added.
Meanwhile, Nexen’s Randy Gossen noted that a decade ago, the biggest risk for oil and gas companies was geological – how to tap what lay under the Earth’s surface. Today’s greatest risks are above ground, he said – and having a solid CSR plan in place is essential to assess new business opportunities and at the same time, “can be the best form of risk management that exists.”
Nexen helped promote an international code of ethics for Canadian businesses in 1996, and developed its own in-house Integrity Program where workers learn the company’s commitment to fair and ethical business practices.
“Corporate social responsibility puts a human face on business,” Gossen added.
