A growing number of Canadian businesses are discovering that it pays to be a good guy.
As free-market economies have matured, investors, customers, communities and governments have found ways to influence corporate decision-making and culture for the betterment of society.
Businesses that forego stakeholder involvement in dogged pursuit of their agendas can find themselves alienated from the social environment in which they operate, leaving them vulnerable when co-operation is needed to address a vital issue.
Corporations that embrace such outside involvement are more likely to thrive.
This fact of life isn't lost on Corporate Canada's leading industries. Business owners and top executives are now asking themselves how they can weave corporate social responsibility (CSR) into the fabric and soul of their operations.
An ever-helpful Industry Canada is now showing other players in the private sector the way, through a newly released manual titled Corporate Social Responsibility: An Implementation Guide for Canadian Business.
This 90-page primer, published by Industry Canada's office of consumer affairs in Ottawa, does what its title suggests by offering step-by-step information on how to adopt CSR.
A sizable part of this guide also shows how to identify stakeholders and engage them on an ongoing basis.
And the guide makes one thing clear: CSR is not a warm and fuzzy fad - something to be given lip service to at annual meetings or investors' conference calls. To have any effect on the bottom line, CSR must be embraced as a business way of life.
CSR typically includes "above and beyond the call of law" commitments and activities that touch on such areas as corporate ethics, health and safety, environmental stewardship, human resource management, philanthropy and community involvement.
Harvard Business School professor Michael Porter put it best when he told a 2005 conference on corporate citizenship, sponsored by the University of Toronto's Rotman School of Management, that there are countless opportunities to be discovered.
"Every activity in a firm's value chain overlaps in some way with social factors - everything from how you buy or procure to how you do your research - yet very few companies have thought about this," Porter told the gathering.
The Industry Canada guide mentions several Canadian companies that have thrived through their genuine commitment to CSR, including Calgary energy industry giants Nexen Inc., EnCana Corp. and Suncor Energy Inc.
All three are sensitive to environmental issues and the social impact their presence can have on communities.
Nexen has been a leader in finding ways to make its corporate presence a positive one. It has taken an especial interest in the environment - for example, putting exhaustive front-end effort into lessening its impact on northeastern Alberta's forests through careful mapping for the Long Lake crude oil project that considered potential environmental, cultural, historical and archeological sensitivities.
"CSR is about reputation," Kevin Finn, vice-president, investor relations of Nexen, tells Business Edge.
"Doing business globally requires access to opportunities, to bright minds and to capital," Finn said. "Our reputation as a responsible, ethical and successful company helps ensure all of those things ... Those things then show up in dollars and cents."
Scott Ranson, EnCana's manager of public affairs, says society has heightened expectations about corporate responsibility. "We leave a footprint where we operate," Ranson said. "We want to try to minimize that."
EnCana, for example, adopted a "hub-and-spoke" drilling configuration in Wyoming that lessens surface disturbances by more than 30 per cent. In northeastern British Columbia, the company is using wooden mats to protect sensitive muskeg environments during drilling.
Ranson says EnCana's ongoing need for access to new resources is a strong CSR motivator. "We need to deal properly with stakeholders or we will lose our social licence to operate," he says.
"If we were to lose access to the subsurface resources, that would have quite a dramatic effect on our bottom line."
Suncor spokeswoman Darcie Park says stakeholder relations are vital in her company's development of the Athabasca oilsands. "If we can continue to work in a positive way with our stakeholders, then we can continue to grow our business."
Park says Suncor, like its competitors, is constantly under pressure to find skilled labour. "It's no secret that we're in a very, very hot job market right now," she says. "We believe that a reputation for social responsibility actually gives us a competitive advantage when we are trying to recruit."
The Industry Canada guide notes that 71 per cent of Canadian consumers believe they can make a difference in how responsibly a company behaves. Likewise, nine out of 10 shareholders want companies they own stock in to be socially responsible.
"CSR is essentially a strategic approach for firms to anticipate and address issues associated with their interactions with others and, through those interactions, to succeed in their business endeavours," the guide says.
"Firms that fail to engage parties affected by their activities can jeopardize their ability to create wealth for themselves and society."
As Tony Fell, chair of RBC Capital Markets, put it at a 2004 Imagine Canada public policy forum: "No enterprise operates in a vacuum."
Much of the guide is aimed at small businesses as well as the big guys.
"The support of the community around small businesses can be as essential for their success as it is for large businesses," the guide says. "In fact, larger firms in the CSR spotlight may seek out as business partners small local firms with CSR approaches in place."
Web Watch: www.strategis.ic.gc.ca/csr
(Brock Ketcham is an Edmonton-based writer who specializes in consumer and public policy issues. He can be reached at brock@businessedge.ca)
