Corporate Social Responsibility: Lessons Learned

In 2002, the Government of Canada conducted a study to document the experiences of companies that are engaged in various aspects of corporate social responsibility (CSR). The study results are contained in a summary report entitled Corporate Social Responsibility: Lessons Learned and in 10 detailed case studies that document the drivers, implementation approaches, success factors and challenges facing companies that are implementing CSR^[1].

The study is part of a larger federal Policy Research Initiative (PRI) on sustainable development, being undertaken to look at key policy issues facing Canada in the short and long term. The steering committee for the project was lead by the Department of Natural Resources and had representation from Industry Canada, Environment Canada, the Department of Fisheries and Oceans, the Department of Foreign Affairs and International Trade, Transport Canada and the Policy Research Initiative secretariat. The results of the study will help further guide industrial policies and program development to ensure a strong and competitive Canadian economy.

Five Winds International conducted the study using a framework based on a modified version of the Canadian Business for Social Responsibility guidelines on CSR. These guidelines outline key program areas where companies practising CSR should be active. The study proponents selected this framework, and each participating company was asked to highlight the program areas where they were particularly strong. For the purposes of this study, the program elements that support CSR are defined as community relations, governance and ethics, customer or product stewardship, employees, reporting and communications, stakeholder engagement, environment, shareholders and supplier management.

For each company in the study, Five Winds International conducted initial research on the company and held interviews with key managers of the company and external stakeholders. The information gathered was written up in a case study format and reviewed by the companies for accuracy. It is important to note that the study makes no attempt to evaluate or judge the performance of participating companies; it simply tells their stories. No one company can exemplify best practice in CSR. By telling a range of stories from a cross-section of sectors, it is hoped that the study will help the reader understand the complexities, challenges and opportunities facing organisations as they implement CSR.

Results

The study found that there is a range of interpretations of CSR among companies and that each company is at a different stage of implementation. All of the companies had a strong understanding of the business case for CSR, and many had realised tangible results from their CSR efforts. The results ranged from cost savings due to efficiency improvements, to enhanced employee morale to accelerated approvals processes (see Box 1).

Box 1 indicates that for companies, the business case for becoming involved in CSR is quite clear. The study noted that the risks of not getting involved in CSR are also clear to many companies. These risks include loss of the licence to operate and expand, inability to attract quality employees and the loss of brand reputation. The companies in the study also identified a number of success factors for implementing CSR, these include:

• Vision and High Level Commitment to CSR—All companies interviewed recognised that having high-level commitment was necessary for transforming their organisations and integrating CSR into the way they conduct business. High-level commitment provides leadership for the change process, ensures that the needed resources are made available, and that any barriers to change, such as lack of incentives or skills, are addressed. Two companies had board-level committees responsible for stewarding their CSR activities. For some companies (Husky, Weyerhaeuser, VanCity and Home Depot), commitment to CSR originated in the personal beliefs of their founders that being socially responsible was the "right thing to do". For others, senior management commitment to CSR was a relatively new phenomenon, which had been brought about by external pressures from stakeholder groups or a recognition of the business benefits of CSR.
• Skills and Tools—Most companies (eight out of ten) identified skills and tools among the success factors of their CSR programs. Surprisingly, few explicitly identified specific tools or training programs as a means for developing the needed skills, although all companies had these in place. Four companies (Teck Cominco, Weyerhaeuser, Husky, CPR) mentioned that success depended to some extent on hiring people with the right skills, especially when these skills were innate (e.g., interpersonal skills) and could not be easily taught.
• Incentives, Motivational Factors and Employee Buy-In—Seven of the ten companies interviewed reported that corporate recognition programs, bonus or profit-sharing schemes and accountability systems made an important contribution to the success of their CSR efforts. Companies who view their supply chains as part of their own overall performance (Syncrude and Teck Cominco) also use recognition programs to encourage improvement in the performance of their suppliers. Seven companies operated internal training programs geared towards increasing employee awareness and understanding of the company's vision, values and policies and their relationship to the company's core business practices. These often include presentations by the CEO and president to further drive home the importance of CSR to the company's business objectives and help promote buy-in among employees.
• Information and Data—Six companies mentioned that success in managing improvement in CSR performance requires setting measurable targets within fixed timetables and assigning clear responsibilities. To work, targets assigned to individuals need to be realistic and achievable.

Other success factors noted by the companies included strong stakeholder engagement programs, assigning adequate internal resources to CSR, reporting, hiring the right people and developing a strong business case. The companies noted a number of challenges for implementing CSR including: changing the corporate culture; developing performance measures; and, ensuring continuity of CSR programs in the face of management and staff turnovers.

The study also looked at the role government can play to support CSR. At least half of the companies are looking for government to:

• Develop and / or support programs that help companies with CSR (e.g., roundtables on CSR, partner with organisations already working in this area, help with developing CSR metrics, etc.);
• Act as a role model—communicate what government is doing;
• Disseminate best practices (like the case studies project);
• Recognise companies that are leaders in CSR / provide incentives.

Another key role for government identified was to help make sense of competing terms and standards in this area and to clarify what CSR means in terms of expectations on performance.

More detail on these and many other results are contained in the summary report and detailed case studies. For more information on the study contact:

Kevin Brady
Five Winds International

k.brady@fivewinds.com

www.fivewinds.com

or

Jim Frehs
Natural Resources Canada

jfrehs@nrcan.gc.ca

^[1] Led by Natural Resources Canada in partnership with Environment Canada, Fisheries and Oceans Canada, Department of Foreign Affairs and International Trade, Industry Canada, Policy Research Initiative, and Transport Canada, and in collaboration with Five Winds International and Hemmera Envirochem.