1006 File CSR

Corporate Social Responsibility:
Lessons Learned
Final Summary Report

Corporate Social Responsibility: Lessons Learned Summary Report

Contents
Contents 2
Acknowledgements 3
1 Executive Summary 4
2 Study Context and Objectives 9
3 Methodology 12
4 Highlights of Company CSR Activities 17
5 CSR Program Areas 27
6 Business Case for CSR: Key Drivers and Benefits 35
6.1 Business Benefits of CSR...................................................................................................35
6.2 Risks of Not Adopting CSR...............................................................................................40
7 Change Management: Success Factors and Challenges 44
Vision and High Level Commitment to CSR.......................................................................45
Skills, Tools and Information..................................................................................................49
Incentives, Motivational Factors and Employee Buy-In.....................................................50
Resources ...................................................................................................................................51
8 Role of Government in Supporting CSR 54
9 Conclusion 57
Appendix 1: General CSR Interview Outline 59
Appendix 2: Company Contacts 63
Appendix 3: External Viewpoints 66
.
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Acknowledgements

This report was undertaken for the Interdepartmental Working Group on Corporate Social
Responsibility. The Working Group led by Natural Resources Canada comprises a
number of Federal Government Departments including Environment Canada, Fisheries and
Oceans Canada, Industry Canada, Transport Canada, the Department of Foreign Affairs and
International Trade, and the Policy Research Initiative. Kevin Brady, Wylie Thomas, and
Jennifer Clipsham of Five Winds International, with the support of Malcolm Smith of
Hemmera Envirochem, conducted the study.

The study was made possible through the generous cooperation of the participating
companies who took the time to share their experiences and expertise. Their open sharing of
information will assist the Working Group in working cooperatively with industry in the
future to facilitate the adoption of corporate social responsibility within Canadian industry.
The names of the individuals interviewed are contained in Appendix 2 of this report.

For more information on this study please contact:

Jim Frehs

Sustainable Development and International Affairs
Corporate Policy and Portfolio Coordination Branch
Natural Resources Canada
Jim.frehs@nrcan.gc.ca
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1 Executive Summary

This study documents the experience of companies that have developed programs or
activities that address the elements of corporate social responsibility (CSR). 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 is comprised of representatives from Natural Resources
Canada, Industry Canada, Environment Canada, Department of Fisheries and Oceans,
Department of Foreign Affairs and International Trade, Transport Canada and the Policy
Research Initiative. The results of the study will assist to further guide industrial policies and
program development to ensure a strong and competitive Canadian economy.

The purpose of the case study component of the project was to better understand the
drivers, implementation approaches, challenges and barriers facing companies as they
attempt to advance CSR, and to explore the role of government in promoting CSR. The
report consists of two parts: 1) this summary report; and 2) ten individual company case
studies. With the exception of the context section of this report, there has been no attempt
to define CSR or look at broad drivers and trends other than those identified by the
companies who participated. For detailed descriptions of the drivers, benefits, challenges and
success factors, readers are encouraged to read the individual case studies. A companion
paper to this study entitled Rising Expectations: Corporate Social Responsibility, explores these
issues in more depth.

The framework for the study is based on a modified version of the Canadian Business for
Social Responsibility guidelines on CSR, which organizes CSR into key program areas. The
study proponents selected this framework and participating companies were asked to
highlight the program areas where they felt they were particularly strong. The framework
groups CSR activities into the following nine program areas: community and broader society;
employees; customer or product stewardship; environment; stakeholder engagement;
reporting and communications; shareholders; suppliers; governance / code of conduct. A
more detailed description of CSR and examples of activities that make up these program
headings are provided in Section 5 of this report.

Ten companies participated in the
study (box 1). The companies were
selected to reflect a cross-section of
sectors and a range of
understanding and implementation
of CSR practices. For each case
study, initial research was
conducted on the company, which
was followed by interviews with
key managers, as well as external
stakeholders. The information
Box 1
Company Studied Sector
Teck Cominco Metals and Mining
DuPont Canada Chemicals
Husky Injection Molding Manufacturing
Home Depot Canada Retail
Weyerhaeuser Canada Forestry
Canadian Pacific Railway Transport
Nutreco Canada Fisheries
Syncrude Oil and Gas
VanCity Credit Union Finance
TELUS Telecommunications
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gathered was written up in a case study format and reviewed by the companies for accuracy.

It is important to note that the study has not attempted to evaluate or judge the performance
of participating companies. The independent verification of the information contained in the
case studies was beyond the reach and resources of the current survey, and was not the aim
of the research. Instead, the study is an attempt to document the experiences and challenges
of implementing CSR from the perspective of the participating companies. It is hoped that
these findings will make a contribution in understanding the issues facing companies from
their perspective as they attempt to advance CSR.

The methodology of the study is described in detail later in this paper. Readers are
encouraged to familiarize themselves with that section to better understand the scope of the
studys findings.

The study proponents recognize that 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
organizations as they implement CSR.

Key findings of the study were:

Terminology

There was a range of interpretations of CSR among companies, and each company is at a
different stage of implementation. While some of the firms used the term CSR explicitly
(e.g., VanCity, TELUS, Syncrude), many other terms were used including sustainable growth
(Dupont), corporate responsibility (Teck Cominco, Nutreco), social responsibility (Home
Depot, CPR), corporate citizenship (Weyerhaeuser). One company (Husky Injection
Molding) did not have a preferred term, and instead referred to its CSR activities as living
out its purpose and values.

CSR implementation

Companies have adopted a range of strategies, management systems, programs and tools to
implement business practices that support CSR. These concepts and tools are most
advanced in the environmental field. However, there is considerable activity related to
community and stakeholder engagement. Each company was asked to highlight program
areas where they believed they had good business practices or programs in place. Case study
companies were asked to identify the CSR program areas in which they had some activity.
All companies were active in the following areas: Employees; Communities and Broader
Society; and, Environment. A majority of companies were also active in Reporting and
Communications. For a large number of companies, Governance/Code of Conduct and
Stakeholder Engagement had recently emerged as priority areas. Program areas that were less
common, and most likely least developed, were Suppliers, Customers and Shareholders.

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Business Case

All of the companies had a strong understanding of the business case for CSR, and many
had realized tangible results from their CSR efforts. The business benefits identified are
shown in Box 2 and included cost savings due to efficiency improvements, enhanced
employee morale and accelerated approvals processes, among others (see Section 6.1).

Box 2. Business Value: Drivers & Benefits for CSR

- Reputation / Brand Image (10 / 10)
- Corporate Values Right Thing To Do (9/10)
- Relations With Stakeholders / Dispute Resolution / Issues Management (8/10)
- Improved Access to Markets / Customers (8/10)
- Expedited Permitting / Relations with Regulators (8/10)
- Compliance with Regulation (Environment) (8/10)
- Social License to Operate or Grow (7/10)
- Cost Savings / Improved Bottom Line (7/10)
- Increased Employee Morale and Productivity (7/10)
- Changing Stakeholder Expectations (6/10)
- Attract and Maintain Skilled Employees (6/10)
- Reduced Business Risk (4/10)
- Improved Reputation with Investors, Bond Agencies, Banks (4/10)
- Stimulate Innovation (4/10)
- Input to Strategic Planning & Understanding SD (4/10)

Note: Brackets indicate the number of companies out of ten that identified the driver/benefit

The study revealed that the risks of not getting involved in CSR are also clear to many
companies. These risks include loss of licence to operate and expand, inability to attracted
quality employees and loss of brand reputation (see Section 6.2).

Success Factors

The case study companies identified a number of success factors for implementing CSR.
These include:

Vision and High-Level Commitment to CSRAll companies interviewed recognized
that having a vision and high-level commitment was necessary for transforming their
organizations 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
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founders that being socially responsible was the right thing to do. For others, senior
management commitment to CSR was a relatively new phenomenon, brought about by
external pressures from stakeholder groups or a recognition of the business benefits of
CSR.
Skills and ToolsMost 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-InSeven 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 companys vision, values and policies and their relationship to the
companys core business practices. These often include presentations by the president or
other senior executives to further drive home the importance of CSR to the companys
business objectives and ensure employee buy-in.

Other success factors noted by the companies included strong stakeholder engagement
programs, assigning adequate internal resources to CSR, reporting, 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.

Role of Government

Case study companies were asked their views on the role government can play to support
CSR. At least half of the companies identified the following roles for government:

Develop and / or support programs that help companies with CSR (e.g., roundtables on
CSR; partner with organizations already working in this area, help with developing CSR
metrics, etc.);
Act as a role modelcommunicate what government is doing;
Disseminate best practices (such as this case studies project);
Recognize 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.
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Conclusions
This study was conducted in a changing landscape of how stakeholders view the role of the
corporation in society. The case studies support the view that stakeholders are taking a
broader perspective of corporate responsibility that incorporates not only economic
performance, but also environmental and, increasingly, social performance factors. Recent
corporate failures have also illuminated the importance of corporate governance practices.
At the same time, corporate social responsibility approaches, tools and concepts are
becoming increasingly important to companies who want to maintain or increase their
competitiveness in the global marketplace. There has been an explosion of definitions and
implementation guidance on CSR.

While many companies, governments and other policy organizations are taking proactive
approaches to CSR, it is clear from this study that implementing CSR approaches within
companies represents a significant change management challenge. While the business case
may be becoming clearer, implementation of CSR requires more exploration.

The drivers for CSR identified by companies in this study provide important information
that will help determine the best approach for Canada to take on CSR. However, the case
studies have also illustrated that there is still some variation in what exactly CSR means.
Different terms such as sustainable growth, corporate responsibility, core values are used to
describe activities that fall under the scope of CSR, as it is defined in this study. Work is
needed to develop a broader understanding of CSR, and perhaps some measure of
consensus on the scope of CSR. Organizations such as Canadian Business for Social
Responsibility and the Conference Board of Canada have initiated work to develop some
consensus on the meaning and scope of CSR, which will be helpful for defining what the
appropriate roles of different sectors of society should be in advancing CSR.

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2 Study Context and Objectives
The globalization of the economy, pressing ecological issues such as climate change, and
recent events such as the collapse of WorldCom and Enron are shaping and changing how
we view the role of corporations in society. Traditionally, the role of the corporation has
been understood primarily in economic terms. Companies provide products and services
and, in doing so, they create jobs and wealth. Increasingly, stakeholders (shareholders,
investors, communities, regulators, employees, customers and non-governmental
organizations) are taking a broader perspective of corporate responsibility that incorporates
not only economic performance, but also social and environmental performance factors.
These are the sorts of areas that stakeholders are evaluating to determine whether a company
is moving toward sustainable business practices and whether a company is conducting its
business in an ethical and socially responsible manner.

Evidence of this broader perspective on corporate performance can be found in the variety
of guidelines and standards that have emerged in recent years (e.g., the Global Reporting
Initiative guidelines and SA8000, a social performance standard based on International
Labour Organization conventions, Universal Declaration of Human Rights and the United
Nations Convention on the Rights of the Child) and a growing interest among financial
sector rating schemes that try to identify best-in-class performers (e.g., the sustainability
rating schemes developed by companies such as Innovest and Sustainable Asset
Management). More recently, the financial collapse of a number of major corporations, and
the associated massive loss of shareholder value, have focused stakeholder attention on
ethical and transparent governance policies and procedures. A number of organizations are
currently developing guidance to improve corporate accountability in these areas (e.g., the
OECDs recent initiative to review, and provide recommendations on strengthening,
corporate governance procedures).
1

In response to, and in some cases in advance of, the current situation, a growing number of
private and public sector organizations are adopting the term corporate social
responsibility (CSR) to describe an organizations overall commitment to meeting
stakeholder expectations on economic, environmental, social and governance performance.
Examples of organizations utilizing or investigating elements of CSR include:

Canadian Business for Social Responsibility ( CBSR) and their Good Company
Guidelines for Corporate Social Performance and research on CSR practices;
The Conference Board of Canadas Corporate Social Responsibility Initiative. Under this
initiative, the Conference Board of Canada and Imagine have developed the CSR
Assessment Tool which companies can use to manage, measure, and improve their
CSR performance;
The World Business Council on Sustainable Developments (WBCSD) report
entitled Corporate Social Responsibility: Making Good Business Sense;

1
http://www.oecd.org/EN/document/0,,EN-document-76-3-no-12-36547-0,00.html
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The OECD Guidelines for Multi-National Enterprises which include a discussion of
CSR; and
The Commission for the European Communities Green Paper entitled Promoting a
European Framework for Corporate Social Responsibility.

In addition, many private sector organizations use the term CSR to describe their activities in
a range of areas such as environmental performance, employee programs, community
investment, stakeholder engagement, supply management and others. Many of the worlds
biggest companies (e.g., Microsoft, Shell, HP, General Motors, Coca-Cola, IBM, ABB, Alcoa
and many others) are also members of organizations such as CBSR and CSR Europe which
promote the adoption of CSR practices.

The range of proponents advocating CSR has led to a range of definitions and
interpretations of best practice. Some recent definitions include:

Corporate social responsibility is the commitment of business to contribute to sustainable economic
development, working with employees, their families, the local community and society at large to improve
their quality of life.
2

World Business Council for Sustainable Development (WBCSD)

CSR is defined as operating a business in a manner that meets or exceeds the ethical, legal, commercial
and public expectations that society has of business.
3

Business for Social Responsibility

Corporate Social Responsibility is the overall relationship of the corporation with all of its stakeholders.
These include customers, employees, communities, owners/investors, government, suppliers and
competitors. Elements of social responsibility include investment in community outreach, employee
relations, creation and maintenance of employment, environmental stewardship and financial
performance.
4

The Conference Board of Canada

Corporate social responsibility is essentially a concept whereby companies decide voluntarily to contribute
to a better society and a cleaner environment.
5

European Green Paper
Promoting a European Framework for Corporate Social Responsibility

2
World Business Council for Sustainable Development (WBCSD)
http://www.wbcsd.org/projects/pr_csr.htm
3
Business for Social Responsibility
http://www.bsr.org/resourcecenter/
4
Canadian Centre for Business in the Community, The Conference Board of Canada

5
Commission for the European Communities, Green Paper Promoting a European Framework for Corporate
Social Responsibility. (COM Brussels, 2001)
http://europa.eu.int/comm/employment_social/soc-dial/csr/greenpaper.htm
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As varied as the definitions of CSR are, they possess the following common elements:

Commitment of businessa responsibility or obligation of companies to operate in a
manner that adds value (beyond traditional economic value) to society.
Benefits to society/stakeholdersthis is fairly broad, although some of the definitions have
been specific in listing families, communities and employees as the parts of society that
should benefit from a companys operations.
Ethical behaviourthree of the definitions talk about ethics. This ties in with the
commitment of business to operate in an ethical manner. However the ethics in these
definitions appear to move beyond traditional business expectations (i.e., fair, non-
corrupt business practice), and include societys expectation of what is acceptable
business practice.
Environmental performancealthough CSR is a broad concept, environmental
management/performance is often highlighted perhaps because it is more easily
measured.

This study is an attempt to provide Canadian decision-makers with some insights into the
drivers and challenges that organizations face as they strive to implement and advance
corporate social responsibility (CSR). The objectives of the study are to:

identify CSR best practices among the case study companies;

provide insight on how to utilize these examples of best practice to promote actions
within Canadian companies that are not actively engaged in CSR; and

provide recommendations on the role of government in working cooperatively with
industry to facilitate CSR with Canadian industry.

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3 Methodology

In order to fulfil the project objectives, the work was divided into four (4) phases,
summarized in the following table and described briefly below.

Table 1: Study Methodology-Four Phases
Phase Title
Phase 1Survey Design
Develop Survey Instrument
Selection of Candidate Companies and Initial Data Gathering
Pilot Test and Revisions
Phase 2Survey and Detailed Information Gathering
Conduct Initial Detailed Company Research
Conduct Interviews and Write-Up Case Studies
Review of Written Case Study by Company
Phase 3Data Analysis
Analyze Company Case Studies and Summarize Findings
Phase 4Final Report and Presentation
Prepare and Deliver Final Report
Presentation of Findings to CSR Working Group

Phase 1Survey Design

The Interdepartmental Working Group on CSR and the study team agreed to a template for
the CSR best practices case studies and a survey approach to guide the interviews that were
to be conducted with participating companies and their stakeholders. A list of ten companies
for the CSR best practice case studies was finalized by the Working Group after initial
screens of 55 candidate companies were conducted (recommended by both study team and
study sponsors). The ten companies selected for participation were based on a number of
criteria. Selection criteria included:
Company should be committed to, and active in a number of CSR activity areas (e.g.
community involvement, employees, environment, suppliers etc.);
Case studies should reflect a balance of sectors of interest to the Interdepartmental
Working Group which included Forestry, Metals and Mining, Energy,
Transportation, Manufacturing, Fisheries, Agriculture/aquaculture, Financial, etc.;
Some companies should have experience with International/Americas operations
(e.g., Canadian companies with international operations or U.S. or Mexican
companies operating in Canada);
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Case studies should include a mix of SMEs and large companies;
Some of the case study companies should have operations, experience working in
developing countries; and
Case studies should illustrate the full breadth of CSR. The suite of case studies
should strive to illustrate a full range of CSR approaches being undertaken by
companies with more emphasis being placed on ethics/values and social program
areas.

Of the ten companies initially selected by the study sponsors to be included in the study, one
company declined participation and was replaced by another company from the same sector.
Corporate profiles for the ten companies who agreed to participate in the study are
summarized in Table 2.

Table 2: Corporate profile for each company participating in the study.
Company Profile
Canadian Pacific
Railway
CPR has been operating since 1881 and is a North American railway that
delivers freight transportation services to all sectors over a 14,000 mile
(22,000-km) network in the U.S. and Canada. CPR is based in Calgary,
Alberta, employs 15,840 people, and had total revenues in 2001 of $3.733
billion. CPR began a new era in 2001 when, under a proposed reorganization
of Canadian Pacific Limited, it became an independent, publicly owned
company.
DuPont Canada DuPont Canada is a science company that specializes in the delivery of
science-based solutions in markets such as food and nutrition, health care,
apparel, home and construction, electronics and transportation.
Headquartered in Mississauga, Ontario, the company is actively living the
directive of Sustainable Growth, under the care of its Chairman and CEO
Dave Colcleugh. DuPont Canada was established in 1877 and currently
employs approximately 4,000 employees in Canada. DuPont Canada reports
business in five key segments: Nylon Enterprise (35 percent of total sales),
Performance Coatings and Polymers (23 percent of sales), Specialty Fibres (10
percent of sales), Specialty Materials (14 percent of sales), and Specialty
Polymers and Films (18 percent of sales). DuPont Canada is part of the
DuPont group of companies that operates in more than 70 countries
worldwide (in North America, South America, Asia Pacific, Europe, the
Middle East and Africa).
Home Depot
Canada
Home Depot was founded in 1978 in Atlanta Georgia, and has grown to
become the worlds largest home improvement retailer and the second largest
retail chain in the USA with total sales of $53.6 billion in 2001. The company
employs a workforce of more than 250 000 associates in 1436 retail
locations of which 83 are located in Canada. Home Depot also operates in
Mexico, Chile and Argentina.
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Company Profile
Husky Injection
Molding
Husky Injection Molding Ltd. is a Canadian supplier of injection molding
systems to the global plastics industry. Customers use Huskys equipment to
manufacture a wide range of plastic products such as soft drink and mineral
water bottles, food containers, technical products and automotive
components. The company serves customers in over 100 countries from
approximately 41 sales and service offices around the world. The three major
manufacturing facilities (or campuses) are located in Bolton, Ontario;
Dudelange, Luxemburg; and Milton, Vermont and main markets for Husky
are the USA, Europe, Latin America and Asia. Huskys worldwide sales for the
fiscal year 2001 were $640 million and the company employed more than 2800
people worldwide.
Nutreco Canada
(Marine Harvest)
Nutreco, which stands for Nutrition, Ecology and Economy, is a global foods
company with two major business streams: agriculture (60%) and aquaculture
(40%). Nutreco is headquartered in the Netherlands and has operating
companies in over 20 countries, including the Netherlands, Spain, Germany,
Canada, Chile, France, Portugal, Poland, Chile, France, Scotland, Belgium,
Hungary, Norway, Australia, and the USA. Nutrecos sales in 2001 were EUR
3,835.3 million and the company has approximately 11,000 employees
worldwide. Marine Harvest operations in Canada have only a few hundred
employees.
Syncrude Syncrude Canada Ltd is the worlds largest producer of synthetic crude from
oil sands. In 2001, the company produced 81.4 million barrels of sweet crude
oilthe equivalent of 223 000 barrels a dayand supplied Canada with 13
percent of its petroleum needs. The companys revenues in 2001 were $3.2
billion. Syncrudes operations are located on the Athabasca Oil Sands Deposit
near the First Nations community of Fort McKay in the Regional Municipality
of Wood Buffalo of north-eastern Alberta. In 1983, Syncrude moved its
headquarters from Edmonton to Fort McMurray in order to be closer to its
operations.
Teck Cominco Teck Cominco Limited is a Canadian-based integrated natural resource
company whose principal activities are mining, smelting and refining. The
company was formed in 2001 through the merger of two companies Teck
Corporation and Cominco Ltd., established in 1913 and 1906, respectively.
Teck Cominco employs 6,100 people and has 5,800 shareholders. Teck
Comincos reported revenue in 2001 was approximately $2.4 billion. Teck
Cominco is based in Vancouver and has 9 producing mines in Canada, the
U.S. and Peru, and significant zinc-refining operations in Canada and Peru.
TELUS TELUS is one of Canada's leading telecommunications companies having
approximately 26,000 employees and revenues of $7.2 billion in 2001. The
company dates back to 1990, when AGT (Alberta Government Telephones)
was reorganized into TELUS and then sold to the public. In 1999, BC
TELECOM and TELUS merged to form the company that exists today,
headquartered in Vancouver, British Columbia. TELUS provides local, long-
distance and wireless services; high-speed data networks; advanced data,
Internet and e-commerce solutions; and multimedia, advertising, mapping and
information services.
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Company Profile
Vancouver City
Savings Credit
Union
Vancouver City Savings Credit Union is Canadas largest English-speaking
cooperative financial institution. VanCity started out modestly in 1946, with
total assets of $22 and hired its first employee in 1952. By 2001, it had 1600
employees, 39 branches throughout the Greater Vancouver area, Victoria and
the Fraser Valley of British Columbia, and a lending portfolio of $6.7 billion,
representing 90 percent of total consolidated assets of $7.5 billion. As a
financial cooperative, VanCity subscribes to the cooperative principles of the
International Cooperative Alliance (ICA), an international NGO whose
mandate is to unite, represent and serve co-operatives in a broad range of
sectors worldwide.
Weyerhaeuser
Canada
Weyerhaeuser is an international forest products company that has four major
product/service lines. The company grows and harvests trees; produces and
sells forest products including logs, wood chips, pulp, paper and packaging;
operates a business to collect and recycle wastepaper, boxes, newsprint; and
builds single and multi-family homes, and develops land. The company now
employs approximately 58000 people in 18 countries, and generated $14.5
billion in sales in 2001. Weyerhaeuser Canada has grown through acquisition
significantly over the past 15 years and now employs approximately 11 500
people. The company is headquartered in Washington, USA, and has 168
manufacturing facilities in North America, Asia, Europe and New Zealand.

The interview questions and case study template were pilot tested with Teck Cominco, a
Canadian-based integrated natural resource company based in Vancouver. Results of the
pilot test were presented as an interim report to the Interdepartmental Working Group on
CSR for comments and feedback to ensure that the interview approach taken yielded the
desired outcomes. After making a few required changes, the study team proceeded with the
pilot case study as the model for the full information-gathering exercise and documenting of
the remaining nine company case studies.

Phase 2Survey & Detailed Information Gathering

Comprehensive case studies of ten companies active in CSR implementation (listed in Table
2) were developed through a combination of literature research and interviews with key
personnel in the case study companies. Members of the Interdepartmental Working Group
on CSR sat in on and participated in each interview. The names of the individuals
interviewed are contained in Appendix 2 of this report. In many cases, follow-up interviews
were required with other company representatives who could provide more insight into
certain CSR program areas. During the interviews, companies were asked to provide names
of stakeholders that the researchers could contact for outside opinions on company
performance. Where these were provided, short follow-up interviews were conducted,
quotes from which are provided in Appendix 3.

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Phase 3Data Analysis

Information gathered during the case study writing process was further analyzed to look for
common trends, drivers, benefits, best practices, success factors, barriers, challenges, and
lessons learned with the perspective to look for policies or approaches the Canadian
government can take to promote CSR in Canadian companies operating domestically and
abroad.

Phase 4Final Report and Presentation

The outputs of Phases 2 & 3 were assembled into a draft report that was reviewed by
members of the Interdepartmental Working Group on CSR. The final draft incorporated the
feedback and comments received from the Working Group. Five Winds International
briefed the Interdepartmental Working Group on CSR on the key findings from the study
and gave some recommendations as to how the government can promote and support CSR
in Canadian industry operating both domestically and abroad.

Study Limitations:

Because the selection criteria used for determining candidate case study companies
was so broad, all of the case study companies were at different stages of CSR
implementation.
Interviews were conducted with only one, or sometimes two representatives of each
company. Therefore, the case studies by no means represent everything each
company may be doing in the area of CSR.
No external verification of the information contained in the case studies was done,
although in most cases follow-up calls were made with stakeholder contacts provided
by the companies.
There is not a widely held definition of CSR in Canada today and a number of the
companies do not use the term CSR to describe their activities. Therefore, while
specific aspects of the companies activities are directly related to the CSR framework
utilized for the study, this does not imply an endorsement of the framework.
The study focuses on presenting the positive features and elements of a range of
CSR initiatives across different companies. Resource and methodological limitations
did not provide room to pursue an overall or more comparative perspective of the
CSR performance of companies.
Given that only ten case studies were conducted, conclusions should be interpreted
with caution and cross-checked with results from other studies to determine where
there is convergence and divergence. If there are no other studies with related results
or where divergence occurs, more research would appear to be warranted.
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4 Highlights of Company CSR Activities
The ten case studies provide insight into what CSR means to each organization, the journeys
or transformations each organization has gone through, and what each is doing to be a
better corporate citizen. The table below highlights examples of CSR practices from the
companies. The accompanying text boxes highlight some examples from the case studies
that study team considered to be best practice in CSR.

Table 3: Exemplary CSR Practices
Company Highlights of CSR Activities
Corporate Social
Responsibility at
Canadian Pacific Railway
Although railways have right of way under federal regulations, the
company embarked on an exercise to develop deeper relations with
communities along its rail corridor and to proactively address local
disputes arising from proximity to its rail lines (e.g., noise, vibration,
aesthetics).
Worked with the Federation of Canadian Municipalities (FCM) and
the Canadian Association of Municipal Administrators (CAMA) to
develop mechanisms for resolving disputes locally, best practices
related to changes in rail operations and guidelines for how municipal
governments develop their lands near rail lines. The model is now
being developed into an industry-wide standard following the signing
of a memorandum of understanding between FCM and the Railway
Association of Canada.
Has developed a number of programs and is working with a number
of organizations to reduce accidents related to road-rail crossings,
trespassing, etc.
Conducts regular open houses in communities across the country to
discuss community concerns and what the company can do or is
doing to address these.
Has set up a number of toll-free lines which allows it to respond
quickly to public concerns regarding rail operations, identify
emerging issues and report safety infractions.

Sustainable Growth at
DuPont Canada
Wants to be a sustainability leader in the industry, and works with its
customers to bring them along the sustainability curve.
After meeting the aggressive environmental goals it set itself in 1990,
the company has set further definable Sustainable Growth goals for
the year 2010, which include economic, environmental and, now,
social goals.
Created a radar chart to measure performance against the pursuits
and metrics to meet its 2010 goals. The radar chart is used as a
framework for discussion at DuPont Canada business meetings, as a
useful visualization or snapshot that shows how the company is
doing holistically.
DuPonts commitment to creating lasting value in communities is
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best illustrated by its ground breaking Social Innovation Enterprise
Program. The Social Innovation Enterprise is now a cornerstone of
DuPont Canadas community investment program and represents a
significant paradigm shift from a focus on input (what the company
gives) to a focus on output (what values it actually creates).
Launched an Advisory Council to improve understanding of
complex sustainability issues and which will help direct DuPont
Canadas implementation strategies for Sustainable Growth.
Corporate Social
Responsibility at Home
Depot Canada
Giving back to communities is part of the personal values of the
companys founders. Corporate donations are structured around four
priority areas: environment; affordable housing; at-risk youth and
emergency preparedness, areas where the companys line of business
can make an impact.
Successfully created a culture of volunteerism among employees,
whose volunteer hours are often used to support the corporate
donations program. Team Depot volunteers spent more than 6
million hours in 2001.
Recognized early that the biggest impacts and, therefore, the biggest
difference it can make are associated with the environmental
performance of the products it sells, and developed a number of
innovative programs to help consumers reduce their environmental
footprints by making better choices and using and disposing of
products wisely. The programs include: the environmental
greenprint, a check-list of environmentally preferred products and
practices for shoppers; in-store clinics and online tips for energy
efficiency; support for a public online service that provides
information on using and disposing of common household items in
an environmentally friendly manner; third-party verification of all
products with environmental claims; alternative products developed
in partnership with vendors.
Early adopter of a number of voluntary environmental initiatives.
These include the first environmental policy (or Principles), in-
store energy efficiency programs (US EPAs Green Lights Program);
reverse distribution programs to recycle packaging; and wood
products independently certified as originating from well-managed
forests.

Purpose and Values at
Husky Injection Molding
Committed to making a contribution to society through community
development, evident in the Moose Deer Point First Nations
Community sustainable community project, touted one of the first
innovative private, public and First Nations partnerships of its kind
in Canada.
Prides itself on actively living out its five core values: Make a
Contribution, Proactive Environmental Responsibility, Passion for Excellence,
Uncompromising Honesty and Bold Goals.
Robert Schad, the companys CEO, is a visionary leader. From the
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beginning his personal vision of the company included not only
making money, but also making a positive contribution to society.
By demonstrating the companys Purpose and Values, the company has
an easier time obtaining the necessary permits to earn its right to
operate and expand.
No real difficulty getting employee buy-in to all aspects of the
companys Purpose and Values because of its practice of introducing
the Purpose and Values to prospective employees in the interview
phase.

Corporate Social
Responsibility at
Nutreco Canada (Marine
Harvest)
Committed to partnering with First Nations Communities in Canada
and to ensuring a sharing of power between the First Nation and the
company through formal business agreements.
CSR objectives set out in the companys 2001 Social and Environmental
Report are overarching and apply to all operations, yet each company
has the autonomy to work toward CSR objectives in its own way.
Corporate-wide Credo outlines the companys understanding and
acceptance of its responsibilities towards its stakeholders, people and
the planet. Nutrecos Code of Ethical Conduct lays out requirements
and expectations of the company and its employees.
Employee Council Programs are an innovative and effective CSR
program in the area of human resource and employee relations.

Corporate Social
Responsibility at
Syncrude
Recognized before start-up that its operations would have a
significant impact on the local Aboriginal communities, and that if
special effort were not made, these communities risked being
excluded from the economic boom the industry would bring.
The companys goal is to have a workforce where Aboriginal
participation is representative of their percent of the local population.
The company is now the largest industrial employer of Aboriginal
people in Canada.
CSR activities are founded on a belief in the importance of
stakeholder relations to business success and that sustainable
development encompasses not only environmental and economic
objectives, but also community relations, human rights and social
inclusiveness. The company engages with a broad range of
stakeholders to ensure that the company (and industry) is able to
address any strains on communities and the environment that come
with rapid industrial development in a remote area.
Has a policy of giving preference to local suppliers to ensure the local
population benefits economically from the presence of its operations.
In 2001, $452 million out of a budget of $1.2 billion was spent locally
(i.e., Fort McMurray) of which $92 million was on goods & services
supplied by the Aboriginal community.
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Implements a number of programs to build capacity among its
Aboriginal neighbours to maximize their participation in the
companys success. These include special assistant to foster the
development of Aboriginal businesses and to help them meet the
standards required to supply to the company.

Corporate Responsibility
at Teck Cominco
Approved a Charter of Corporate Responsibility in 2002, following the
merger of Teck Corporation and Cominco Ltd. The Charter is
translated into a Code of Business Practices to provide guidance to
employees at the operations and community level.
Sustainability Report is structured around the Charter, allowing the
company to gauge how well it is living up to its commitments.
Believes it can contribute to sustainability through application of
three broad principles: product stewardship; environmental
performance; respect for communities.
Engages early with communities and stakeholders to agree on sharing
of benefits, minimizing disruption to local traditions and way of life,
mitigating environmental impacts, plan to ensure sustainability of
communities following mine closure and mechanisms for addressing
community concerns as they arise.
Has developed a track record of successful relationships with
communities around its mines. These include the NANA Inupiat at
its Red Dog Mine in Alaska, the community of Metaline Falls near its
Pend Oreille Mine in Washington State, the town of Kimberley near
its Sullivan Mine in British Columbia, and communities near its
Antamina Mine in western Peru.

Corporate Social
Responsibility at TELUS
Encourages its suppliers to incorporate sustainability into products
and services through its Environmentally Responsible Procurement
Policy and Practices.
Set a target to reduce energy consumption per unit of revenue
generated (millions of dollars of sales) by 10% by 2007.
Set a 2005 target to reduce the number of chemicals used by 50%
from 2000 levels.
Life Balance Account provides funding for management employees
to purchase any product, service or experience that helps them
improve work/life balance (e.g., fitness, home cleaning, pet care,
childcare, entertainment, a relaxing get-away, etc).

Corporate Social
Responsibility at
VanCity Financial
Statement of Values and Commitments (SOVAC), developed in
consultation with stakeholders, clearly articulates credit unions
mission, purpose and values and translates these into commitments
for living up to these values.
Uses the A1000 social accountability, auditing and reporting standard
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to embed SOVAC into core business practices and drive continuous
improvement. SOVAC provides the framework for public reporting
which shows how the credit union is living up to its commitments.
Considers itself a values-based organization that balances financial
responsibility with making a contribution to the communities and
broader society in which it operates, especially those members of the
community who are underserved by mainstream financial
organizations.
Developed a number of innovative financial products and services
including the first values-based credit card (EnviroCard VISA); the
first self-reliance loans to businesses without collateral; first socially
responsible mutual fund, and a number of financial products that
allows its members to invest according to their personal values.

Corporate Citizenship at
Weyerhaeuser Canada
Acquisition of MacMillan Bloedel reinforced the business case for,
and the importance of, having a reputation as a good corporate
citizen.
Code of Ethics and Business Conduct, Our Reputation: A Shared
Responsibility, ensures that all employees hold themselves to the
highest standards of ethical behaviour and recognize that they have a
responsibility to all stakeholders affected by their business.
Set a goal of having all manufacturing and timberland operations
ready for certification to ISO 14001 by 2005.
Adheres to the principles and objectives of the Sustainable Forestry
Initiative (SFI) and the Canadian Standards Association (CSA)
Sustainable Forest Management System Standard.
Developed a formal policy for building relationships with Canadas
Aboriginal peoples in 2002.

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Box 1DuPonts Social Innovation Enterprise

After reviewing all areas of the companys stakeholder engagement programs, DuPont
Canadas business leaders concluded that the companys approach to community
investment was not as strategic or as successful as it could be. The company did not know
if it was having a positive impact or even having the impact it wanted to have on the
community groups or NGOs it was investing in. To address this issue, DuPont formed a
multi-stakeholder round table including several representatives from non-governmental
organizations and engaged them in dialogue about what they thought would improve
communities in general, and what support NGOs could use to enhance their programs.
Many NGOs expressed that they lacked a concrete business approach as a means to
maximize value value in terms of outcomes for pursuits being taken. DuPont recognized
that it could help NGOs address this need and launched its new Social Innovation
Enterprise Program. DuPont realized it could share its expertise with NGOs on how to run
efficient, effective business operations. NGOs could in turn assist DuPont with product
innovation by providing DuPont employees with a better understanding of collaborative
processes and techniques the companys product innovation process depends heavily on
effective collaboration between representatives of several departments. This Social
Innovation Enterprise program is an example that clearly illustrates DuPonts commitment
to being a good corporate citizen. The company looks for win-win solutions that ensure the
company is contributing to the communities in which it operates.

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Box 2Huskys Commitment to Making a Contribution: The Moose Deer Point Sustainable
Community Project

The Moose Deer Point First Nations reserve is very close to where Huskys CEO Robert
Schads summer cottage is located in Muskoka Ontario. On many occasions, Mr. Schad had
reflected that the conditions the Moose Deer Point people were living in were very poor.
There did not appear to be many lucrative employment opportunities on the reserve and there
was evidence of social problems. He asked himself, What could Husky do to improve the
health and sustainability of this community? Mr. Schad sat down with J. Edward Williams,
Chief of the Moose Deer Point First Nations community, to discuss possibilities for some sort
of sustainable community project. The two men proceeded to launch an indigenous peoples
partnership program through the Schad Foundation (Huskys philanthropy program). With
additional funding from both the federal and provincial governments, they were able to
construct a state-of-the-art injection molding facility on the Moose Deer Point reserve called
Niigon, which means future in the local language Ojibway. Niigon is fully owned by the
Moose Deer Point First Nations people, and all employees are residents of the First Nation
community. Husky will continue to provide know-how and technical support until the facility
can be run independently. The facility brings employment opportunities and economic stability
to the community and contributes to sustainable community development in other ways as all
dividends are reinvested in community social, environmental, wellness and infrastructure
projects. This sustainable community project has been touted as the first innovative private,
public and First Nations partnership of its kind in Canada.

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Box 3Helping Communities Sustain Themselves: Teck Comincos Pend Oreille Mine Story
Metaline Falls is a town of 235 people near Teck Comincos Pend Oreille Mine development,
in northeastern Washington State. Unemployment in the region is high and the region has
gone through a number of boom-bust cycles (a former mine; forestry; and a cement factory
that closed). Teck Cominco realized that its mine would be short-lived, on the order of 10 to
12 years, and therefore the impact on the community near the mine would be significantan
influx of people for a short period of time, leading to the typical boom-bust economic
environment. Teck Cominco asked itself the question What does the community want?, believing
that answering this question would help the company figure out what it could be doing today
to ensure a sustained positive impact on the community. Teck Cominco decided to approach
the community early in the development process and initiate a dialogue to determine ways that
the company could support the development goals and objectives of the community.

In 1998, Teck Cominco and the City Council of Metaline Falls formed a committee of 10 to
15 people with broad representation from the community and the company to act as liaison
and to develop an economic development plan for the community. The plan that emerged
from this process outlined community economic development goals and objectives and
identified ways in which the company and the development of the mine could help in
achieving those goals and objectives. For example, the company is looking at ways in which
mine infrastructure can be used to support economic activities once operation ceases. To
support the communitys desire to hire locally, the company has initiated a project with the
state-level department of employment to develop a local job bank for the community to
facilitate local hire by Comincos contractors. The company is also working with the local
environmental community to address their concerns and has agreed to do its best to reduce
metal loads below those required by the permits.

The trust and good will generated between the company and the community has reduced the
level of confrontation of the mine development to just about zero. This is significant as,
under US law, while permits may be granted, they can also be challenged in court. Such
challenges can lead to significant delays and costs for project proponents to the point where
they can affect the economic viability of projects. As well, the lack of conflict associated with
plans to open the mine and the willingness of the company to explore new ways of doing
business has encouraged a relationship of collaboration between the company and regulators,
which can help with permitting processes.

According to Teck Cominco, while effective stakeholder engagement processes have a clear
benefit to companies in terms of dealing with regulatory processes, progressive approaches to
stakeholder engagement are not just about expediting the process. Effective engagement helps
build relationships that support the resolution of other issues that inevitably arise over time.
The process has helped reframe the entire debate from bad mining and jobs versus the
environment to a debate on how the mine could contribute to the social health of the
community.


Box 4Syncrudes Aboriginal Relations: Earning Its Social Licence to Grow

When Syncrude began construction of its oil sands facilities in the Fort McMurray/ Wood
Buffalo region in the early 1970s, it quickly realized that the development of the enormous oil
sands deposit would inevitably have a significant impact on the local way of life and the
environment. On the one hand, development could bring economic opportunity and an
increase in the standard of living to the people of the region. On the other hand, it could
create stress on the socio-economic fabric of the local communities. Of particular concern was
the effect of development on the regions Aboriginal people.

Thus, in 1974, before operations began, the companys first president set up a formal Native
Development Program and established an Action Plan for Native Training and Counselling.
These programs have evolved over the years to focus on developing capacity and self-
sufficiency among the local Aboriginal communities that will enable them to compete for
business and employment opportunities on an equal footing with the larger population.

The programs have been successful in helping the company meet its goal for Aboriginal
participation in its workforce to reflect their regional population of 13 percent, making the
company the largest industrial employer of Aboriginal people in the country. However, the
majority are skilled tradesmen or process or equipment operators. Syncrude is working on a
number of fronts to increase Aboriginal representation in management positions. For example,
it offers scholarship and other programs to support the pursuit of higher education among
Aboriginal youth, diversity / cultural training for non-Aboriginal employees to the dispel
myths that can prevent people from reaching their full potential within the organization.
Syncrude works with its contractors to increase the number of Aboriginal employees.

Syncrude, along with eight other oil sands developers, is working with the Athabasca Tribal
Council (ATC) to address five priority issues: environmental; employment and training;
physical infrastructure; human infrastructure (health and social development); and long-term
benefits.

By implementing a number of programs supporting the development of Aboriginal business,
Syncrude has managed to steadily increase the share of goods and services it purchases from
Aboriginal-owned business. In 2001, the company spent $92 million on goods and services
from Aboriginal-owned businesses, equivalent to more than 20 percent of the $425 million
purchased in the Regional Municipality of Wood Buffalo.

The company recognizes that these efforts are also good for business. The local population
represents a huge pool of human resources for the industry, and ensuring their participation in
the oil sands economy makes for better relations, a stake in the industrys success and reduced
business risks related to delays caused by lengthy public hearings for project approvals.

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Box 5Values and Social Auditing: VanCitys Approach to Embedding CSR in Business
Practice

A key challenge for organizations embarking on a strategy of corporate social responsibility is
to move from an ad hoc approach to improving social, environmental and economic
performance to a situation where these considerations are integrated and embedded into the
very way they conduct their business. Among other things, this transformation requires an
understanding of how and where they can add value to society (beyond traditional economic
expectations of creating wealth and jobs) and ensure continuous improvement, while
minimizing any negative impacts. While there is no universally accepted definition of CSR,
most definitions emphasize transparency and accountability, and the importance of
stakeholder engagement as a prerequisite for understanding societal expectations and
identifying what matters most in terms of social, environmental and economic performance.

VanCity has been able to successfully overcome these challenges and deeply embed CSR into
its core business activities, through the development of its Statement of Values and
Commitments (SOVAC), which articulates in clear language the credit unions mission, core
purpose and values, and translates these into a series of six commitments for living out its
values. SOVAC guides the credit unions business decisions and strategies and provides a
coherent framework for its social audit and reporting processes.

VanCity follows the AccountAbility 1000 (AA1000) standard for its social audit process to
drive continuous improvement in living up to its commitments. The social audit is embedded
in the organizations governance and management systems as its findings come out just in
advance of the business panning cycle, so that the information can be used to plan the next
cycle of business activity. The board of directors sign off on the findings of the social audit
report and its broad commitments to action, which are then communicated to the business
units who identify concrete initiatives to fulfill the commitments.

Reporting at VanCity is driven internally mainly as a management tool for improving
performance more than it is by external demands for information (although public reporting is
a key component of CSR and social auditing). On the one hand, it is used as an internal
management tool for identifying gaps in performance and prioritizing areas for action. On the
other hand, it helps further embed CSR within the organization by communicating to staff and
members what the company is doing.

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5 CSR Program Areas
The specific CSR activities which companies were asked to consider were organized into
nine key program areas. Table 4 below provides a summary of the nine program areas and
the range of activities that comprise them. In advance of each interview, companies were
asked to select 3 or 4 program areas that they considered to be unique or best practices to
which they could speak at length during the interview.

Table 4: Elements Included in Key CSR Program Areas

CSR Program
Area
Potential Elements Included
Community and
Broader Society
Local hires
Local purchasing
Support for employee volunteerism
Work schedules tailored to local
needs
Philanthropy
Social impact assessment
Community consultation

Community development
programs
Human rights monitoring
Supplier diversity programs
Indigenous peoples programs
Emergency response programs
Cultural sensitivity training for
staff
Employee
Programs
Workplace diversity (especially in
management)
Work-life balance (flex time, etc)
Profit-sharing / share options
Full benefits for part-time employees
Training / career advancement
Incentive programs
Employee assistance programs

Employee participation in
decision-making
Child labour / human rights
Occupational health & safety
Open communication channels
between employees and
managers
Employee satisfaction surveys
Collective bargaining

Customer/Product
Stewardship
Programs
Product stewardship programs
Labelling programs
Health and environmental
Information on products & services
Involvement of customers in
product development

Customer screening
Communication with customers
on companys standards (e.g.,
procurement)

Environment
Programs
Design for environment
(development of eco-efficient
products)
End-of-life management (product
take-back, recycling,)
Green procurement program
Internal recycling programs
Toxics/hazardous waste
Alternative energy programs
(purchasing, R&D)
Resource efficiency programs
(water, materials, energy)
Emissions management (air,
land, water)
Transportation & distribution
(logistics, employee
Table 4: Elements Included in Key CSR Program Areas

management
Environmental evaluation of capital
investments/projects
Greenhouse gas programs
(measurement, reporting, trades, off-
set projects)

transportation, information
technologies)
Industrial ecology/by-product
synergy programs
Stakeholder
Engagement
Programs
Surveys
Joint management committees
Advisory boards
Web-based communications
Town hall or community
meetings
Reporting and
Communications
Programs
SD data integrated into annual
Reports
Separate environment reports
Separate SD / CSR reports
Any combination of social,
economic, environment
Web-Site
Reports tailored to local facility
VCR, TRI, NPRI, etc.
Various reports to government

Shareholders Any information on activities or programs that the company implements to
involve shareholders in non-financial matters.
Any information on how the company makes information available to
minority shareholders (those not holding majority of voting shares or having
significant influence over board decisions) that allows them to effectively
participate in company decisions.

Supplier Programs Supplier screening (environment,
working conditions, child labour)
Supplier communications
Supplier auditsInternal or
third party
Supplier training/ working
with suppliers to improve
performance

Governance/
Code of Conduct
Programs
Code of ethics
Accountability systems
Support systems for code of
ethics
Investment screening (Human
Rights, Environment, etc)

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Case study companies were asked to identify the CSR program areas in which they had some
activity. All companies were active in the following areas: Employees; Communities and
Broader Society; and, Environment. A majority of companies were also active in Reporting
and Communications. For a large number of companies Governance/Code of Conduct and
Stakeholder Engagement had recently emerged as priority areas. Program areas that were less
common, and most likely least developed, were Suppliers, Customers and Shareholders.
Since time and resources were limited to discuss and document company activities in all
program areas, participating companies were asked to select 3 or 4 areas that they considered
to be unique to their CSR approach or examples of their best practice to discuss in detail.
Table 5 below indicates the areas of emphasis chosen by each company.

Table 5: Areas of CSR focused on by each Company
Company Program Areas Selected by Company
CPR Stakeholder Engagement, Environment, Local Communities and
Broader Society
DuPont Canada Communities and Broader Society, Stakeholder Engagement,
Environment, Reporting
Home Depot Canada Communities and Broader Society, Environment, Employees
Husky Injection
Molding
Communities and Broader Society, Employees, Environment
Nutreco Canada
(Marine Harvest)
Reporting, Stakeholder Engagement, Employees, Environment,
Communities and Broader Society
Syncrude Stakeholder Engagement, Employees, Environment, Communities
and Broader Society
Teck Cominco Communities and Broader Society, Environment, Stakeholder
Engagement
TELUS Communities and Broader Society, Employees, Environment
VanCity Financial Communities and Broader Society, Shareholders, Governance and
Conduct, Employees
Weyerhaeuser Canada Governance and Conduct, Environment, Stakeholder Engagement
(specifically with Aboriginal Communities), Communities and
Broader Society

The following sections provide a brief overview of each of the CSR program areas and some
of the highlights from the case studies.

Employees
Employees have long been considered a key stakeholder for companies, so it was not
surprising that all companies interviewed had programs in this area. Employee programs
have broadened from basic health and safety programs to now include diversity programs,
work-life balance programs and programs to facilitate fuller employee participation in
decision making, etc. TELUS feels intuitively that offering programs such as the companys
Life Balance Account and Team Machine programs for employees may also pay off in the
long run in terms of increased employee satisfaction and motivation. Most companies
concurred that employees who enjoy their work and feel that their employer respects and
recognizes their contribution in the workplace tend to be more innovative and dedicated to
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developing solutions to problems. TELUSs regular Pulsecheck surveys help the company
stay attuned to employee satisfaction levels and informs the company on how well its
employee programs are working. Employee programs are especially important to companies
in sectors that have tight labour markets (Syncrude, Husky, Teck Cominco).

Communities & Broader Society
All companies interviewed were active in this program area. This is understandable as all of
the companies selected for the study had to, at a minimum, have some programs dedicated
to Communities and Broader Society. The study sponsors had expressed a desire for more
emphasis on the social aspects of CSR in the case studies. Although all companies
interviewed had activities in Communities and Broader Society, this is still an emerging
program area of CSR, which extends beyond simply donating money to charitable
organizations. While philanthropy is still an important way in which companies contribute to
communities and broader society, leaders are assuming a larger role in the communities, a
role that supports development and involves communities in decision making. For example,
Husky Injection Molding believes its Schad Foundation, which donates 5% of its pre-tax
corporate profits each year, is important for supporting local environmental and social
community initiatives. The company also recognizes that it can make a contribution to
society through community development, as is evident in its unique partnership with the
Moose Deer Point First Nations People, and the federal and provincial governments.

There is some overlap between the Communities and Broader Society program area and the
Stakeholder Engagement Program area. However Stakeholder Engagement refers to a
companys communication with a much broader group of stakeholders. Communicating and
consulting with local communities is an increasingly important facet of a companys
responsibility to communities. Teck Cominco has learned from its long history with the
Sullivan Mine in Kimberley, B.C., that responsible companiesones that listen to and work
with communitiesare better able to obtain and maintain their social license to operate.
DuPont Canada believes that one way it can add value to communities is to work directly
with NGOs and community-based organizations to share expertise in running efficient,
effective operations. With respect to community economic or social development, some
companies are still grappling to define the roles and responsibilities with respect to those of
local or national governments.

Environment
Environment was the third area in which all ten companies interviewed were active. Pressure
on companies to reduce their impacts on the environment increased in the 1980s and early
1990s, and as a result, the majority of larger companies (e.g., emissions reductions, hazardous
waste management, life cycle assessment of products etc). Many companies elected to talk
about their environmental programs as best practice areas during the interviews as these
programs are well established, performance indicators have been developed, and companies
have had opportunity to see the business benefits of their efforts. For example, TELUS
indicated that the investments the company made in fuel tank upgrades and alarm systems
have already paid off in terms of preventing harm to the environment and avoiding
remediation costs and fines associated with the spills. Weyerhaeuser was the first company in
the forest products sector to develop an environmental policy. The company is also the only
forest products company to be on the Dow Jones Sustainability Group Index and was also
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named North Americas top company in Innovests Forest Products Industry EcoValue 21
report of March 2000.

Reporting
Nine of ten companies interviewed published some type of annual sustainability or CSR
report. Although environmental reports have been produced since the 1980s, when
companies such as Norsk Hydro pioneered the practice, it was not until the 1992 UN
Conference on Environment Development that corporate public reporting on
environmental performance began to enter mainstream business practice. The action plan
for sustainable development Agenda 21 adopted at the conference called on business and
industry to communicate their environmental performance and to report annually on their
environmental records, as well as on their use of energy and natural resources and on the
implementation of codes of conduct promoting best practice. The predominance of
environment reports over other types of non-financial reports can be attributed in part to a
much longer history of collecting such information as part of government-mandated
reporting programs. As well, the link between environmental performance and the financial
bottom-line are better established, and the benefits of managing environmental performance
to companies are reasonably clear.

There is an undeniable trend among corporations to expand the environmental report to
include other non-financial indicators of performance in a CSR report or sustainability
report. The last few years has seen a proliferation of initiatives to develop a common
framework for reporting on economic, environmental, and social performance. The Global
Reporting Initiatives Sustainability Reporting Guidelines, one of these reporting initiatives, is
gaining momentum with companies. More and more companies (e.g., Shell, HP, ABB, BP)
are using the GRI guidelines to structure their reporting programs and organizing their
websites to help reduce the burden of filling out the large number of questionnaires on
social and environmental performance they receive from financial institutions, investors,
NGOs etc. Although most companies in the study pool did not strictly adhere to the GRI
guidelines, some companies (VanCity, Teck Cominco) refer to the Sustainability Reporting
Guidelines in defining measurement indicators and preparing reports. Nutreco also takes into
account the GRI guidelines in developing its Social & Environmental Reports and has
received excellent feedback on its first two Social & Environmental Reports

Governance and Conduct
Governance is central to the entire concept of CSR. Some key stakeholders expect
companies to address their concerns through ethical governance systems and to make those
governance systems accessible and transparent to stakeholders. CSR is about aligning
corporate business objectives with the expectations of society in general. Companies need to
have governance structures in place that allow those issues to be addressed or acted on at the
highest level. Among other things, stakeholders are looking for evidence of codes of
conduct, rules or statements that outline expected behaviour of employees that are in line
with the companys values.

Weyerhaeusers Code of Ethics and Business Conduct clarifies the expected behaviour of
employees and is an important building block of the companys corporate culture. The
companys business conduct office ensures that all employees are trained on the code when
they join the company and that they continue to receive training related to the code on a
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regular basis as it is revised and new issues arise. Stakeholders also expect that there be
mechanisms in place to ensure accountability to these codes of conduct. For example, if a
violation of the code occurs, there should be procedures for any employee to bring those
issues to light and to provide discipline accordingly. Weyerhaeusers business conduct
committee produces a brochure that outlines the various avenues available to employees
who are seeking guidance or want to report violations. This ensures that employees are well
informed and feel comfortable addressing internal issues. Employees can call the chair of the
business conduct committee directly or a representative in their jurisdiction to raise any
ethical concerns they may have.

Recently, pubic attention has turned to corporate governance issues in the wake of corporate
scandals such as Qwest, WorldCom and Enron. CSR in general is also being propelled by
these corruption scandals.

Stakeholder Engagement
Effective engagement of stakeholders is often cited as a key component of a companys
overall CSR or sustainability strategy. Corporations now face a situation in which groups
with an interest in environmental, economic and social performance have expanded from
special interest groups (environmental organizations, shareholders, labour groups) to a broad
array of stakeholders (communities, investors, regulators, employees, suppliers, customers)
who often see the linkage between environmental, economic and social issues. This has led
to a key change in the organizations view of engagement; in the past companies simply
provided informationtoday many companies are involving stakeholders in decision-
making processes.

DuPont Canada believes that collaborating with external resources (NGOs, community
groups, government, etc.) will help the company better understand sustainability issues and
stakeholder expectations of their company. The company has drawn up terms of reference
for an advisory council of five external and five internal advisors. Weyerhaeuser believes that
stakeholder engagement, particularly with Aboriginal communities, is critical to business
success in the forest products sector and has recently developed a comprehensive formal
policy for building relationships with Canadas Aboriginal peoples.

Seven of the ten companies interviewed had some form of stakeholder engagement
program. All indicated that it was an extremely important program area for their companies,
but most admitted that it is a constantly changing area that requires a great deal of
organizational change. Many recognize that stakeholder engagement is key to their ability to
understand and respond to societal expectations. Many companies also indicated that it is
challenging to develop meaningful stakeholder engagement programs that are valuable for
companies and also make stakeholders feel as if their contributions are worthwhile and
effective.

Suppliers
Sectors vary in terms of the pressures they are under to address issues in the supply chain.
Sixty percent of the companies interviewed had some form of supply chain management
program in place. Some sectors have been under greater pressure to develop more
comprehensive supplier screening or auditing programs. For example, environmental issues
in the supply chain have become a big issue for the electronics and automotive sectors in
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response to recent European legislation restricting the use of certain substances and
mandating recycling of products at their end of life. (the End of Life Vehicle Directive, and
the Waste Electrical and Electronic Equipment Directive, etc). In other sectors, such as
telecommunications, the value chains are more complicated and therefore supply chain
management is a greater challenge. The retail industry has come under pressure to address
the environmental attributes of the products it sells as consumer interest in this area has
continued to grow. Home Depot has responded by being one the first retailers to offer
wood products from responsibly managed forests and is now the largest seller of wood
products that have been certified by the Forest Stewardship Council (FSC). The home
retailer is also expanding its offering of environmentally preferable products and ensures that
any environmental claims made by vendors are independently verified. The trend to extend
compliance with its values and policies to its suppliers and subcontractors was also apparent
in the natural resources sector case studies. Syncrude and Teck Cominco both work with,
and monitor the performance of, their subcontractors. These companies are also looking at
social issues in their supply chains and sub-contractors.

Customers
CSR implies that companies look beyond traditional customer complaint and quality
assurance processes. The number of stakeholder groups expecting companies to help
customers make better environmental and social choices is growing. Many companies are
working downstream with customers to improve the environmental and social performance
of products and services. Other companies involve customers in the product development
process. For example, Husky Injection Molding works with its customers to ensure that the
orders customers place with the company make a contribution to society. Husky uses its
core values to screen projects and contracts. In another example, after hearing concerns
from stakeholders regarding unhealthy homes because of off-gassing of glues in traditional
particleboard, and also concerns over the use of hard wood, Home Depot worked with one
of its suppliers, DOW Chemical, to create a particleboard made of straw. Home Depot then
provided signage in its store on the straw particleboard (as well as about other
environmentally friendly products) to help educate consumers about its efforts. CSR
programs that focus on customers typically force companies to think outside the box.
This is an evolving area that has potential to help companies to innovate and change.

Shareholders
It might be surprising that only one company interviewed had a CSR program directed at its
shareholders (VanCity). Shareholders have always been a priority stakeholder for companies
in the sense that companies have always been under pressure to show a quarterly increase in
share value. In many cases, this is the primary driver for how companies manage their
bottom line. CSR now calls on companies to involve shareholders in non-financial matters as
well as well as financial matters. As a cooperative, VanCity makes an effort to involve its
owners in governance decisions, whether they be financial, social or environmental. The
International Cooperative Alliance, of which it is a member, sets out in broad terms the
expected behaviour of cooperatives and their relationship to society. Among these principles
is a commitment to diversity, democratic decision making and working for the sustainable
development of communities. Together, these require that VanCity involve its depositors
and other clientsits members and, therefore, in a sense, its shareholdersin all aspects
of its governance. VanCity has formally articulated this approach in its Statement of Values
and Commitments (SoVaC), which, among other things, commits the credit union to
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provide opportunities for its members to have a say in setting the direction of the credit
union, which includes decisions pertaining to social and environmental matters.
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6 Business Case for CSR: Key Drivers and Benefits
All ten companies participating in the study identified clear business benefits to becoming
involved in CSR, and recognized that there are also risks associated with not addressing CSR.
The benefits identified by companies during the interviews are summarized in Table 6 at the
end of this section.

6.1 Business Benefits of CSR
The business benefits of adopting CSR practices as identified by the case study companies
are described below. Benefits are illustrated with examples taken from the individual case
studies.

Corporate reputation and enhanced brand imageGood organizational performance in
relation to CSR can build reputation while poor performance can damage brand value. All
ten of the companies identified good corporate reputation as a key driver, since many of the
other business benefits of CSR flow from a good reputation. In particular, Syncrude and
Teck Cominco noted that their CSR activities had helped them build good relations with
their various stakeholders and that this in turn had helped them on a number of fronts.
Among other things, a good reputation affords resource companies their social licence to
operate and improves relations with regulators, which help them obtain the required permits
for their operations with fewer hold-ups. It also helps attract good employees in what is
often a tight labour market. For other companies, such as VanCity, CSR is part of their
brand image, which has allowed them to tap into a growing demand for values-based
products or services. In the case of VanCity, potential depositors (members) may also see
the credit unions CSR work as a reflection of how they will be treated as clients, thereby
helping expand VanCitys client-base.

Earn and maintain social licence to operateFor resource companies, reputation as a
good corporate citizen determines its social licence to operate and expand. Failing to obtain
community support or attracting the ire of the non-governmental community can increase
costs by holding up approvals in lengthy public hearings. Syncrude estimates that its failure
in the early 1990s to proactively engage residents in one of its development applications cost
the company $1.5 million in delays and wasted effort in its development plans. Cominco
notes that its efforts to build trust and relations with communities living near in its Pend
Oreille mine development reduced the level of conflict to just about zero. A nearby mine,
that failed to invest in developing relations with its local communities and non-governmental
organizations saw its project challenged in court, even after permits had been issued by the
relevant regulatory authorities. The company in question invested seven years and $30
million in a mine that never opened.

Establish or improve reputation with investors, bond agencies and banksThere is a
small but growing trend in the investment community to use environmental and social
performance factors to evaluate a companys suitability for investment. According to
Matthew Kiernan, executive managing director of Innovest Strategic Advisors, this is
because a companys environmental and social performance is an increasingly potent proxy
and leading indicator for three typically under-weighted drivers critical to future profitability
potential: corporate agility or adaptability; durability of a firms competitive advantage; and
the quality of its strategic management. In addition to institutional investors, individual
investors are using environmental and social criteria to guide their investment decisions.
Banks and insurers are also beginning to look at a companys environmental and social
performance and activities to determine risks and liabilities. Companies that can demonstrate
they are acting to reduce environmental and social risks and future liabilities can benefit from
enhanced credit worthiness and lower premiums. Only a few companies explicitly identified
the financial community as a driver, although those that did felt that the importance of this
stakeholder group as a driver for CSR and sustainability was increasing. For example, Teck
Cominco believes that, in the future, leading companies with best practices in CSR will have
more opportunities than their competitors in terms of access to capital, resources, project
opportunities and markets. According to Home Depots executive vice president of human
resources, CSR helps the company in its four goals of being: the neighbour of choice; the
retailer of choice; the investment of choice and the employer of choice.

Reduce and manage business risksManaging risk in an increasingly complex market
with greater stakeholder scrutiny of corporate activities is becoming essential to business
success. Companies are starting to realize that failing to invest the time and resources in
understanding stakeholder expectations and address their concerns upfront can increase risks
to business such as project delays or cancellations, public relations disasters, and damaged
reputations. Recognizing the power of communities and municipalities, Canadian Pacific
Railway (CPR) has launched a process to reengage communities at the local level to resolve
disputes related to the proximity of residential and commercial neighbourhoods to pre-
existing rail lines. This is helping avoid the intervention of courts and the imposition of
government regulations which can add to the costs of doing business. CPR notes the
experience of a major rail company that has had to put on hold its plans to open an
intermodal terminal, perhaps indefinitely, for failing to engage communities effectively. Teck
Comincos reputation for building successful partnerships with the communities near its
mines has helped it avoid the fate of others who have had time spend large amounts of
resources and time dealing with communities and other groups that challenge their right to
operate, even to the point where these projects become no longer financially viable. Nutreco
has had significant challenges dealing with stakeholders in its industry sector. Currently, a
number of well-known and respected NGOs are staging a public boycott of the companys
salmon because of environmental and social impacts of its business they believe the
company is not addressing. Public boycotts of products are extremely damaging to all
company reputations, and Nutreco is trying to manage the boycott by sitting down to work
through the issues with the NGOs. Nutreco believes that improving stakeholder dialogue
will also work to reduce misconceptions of the sector that have hampered growth for the
company in the past.

Employee morale and productivityMore than half the companies interviewed noted
that their CSR programs contribute to increased employee morale and motivation and these,
in turn, translate into greater productivity. Syncrude observed that its good employment
practices and safety record demonstrate to employees that the company cares, and this
improves labour productivity. Team Depot, the employee volunteer program that is part of
Home Depots larger corporate donations program, helps reinforce the teamwork culture
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that is a signature of the companys success as a retailer, and gives individuals the
opportunity to demonstrate skills such as leadership that they might not otherwise have a
chance to in their day-to-day duties. VanCity has conducted survey work that has shown that
its values and corporate culture resonate very strongly with staff. This has advantages in
attracting and maintaining good people, keeping them loyal and motivated, all of which
translate into better service to their clientele.

Attract and maintain employeesThere is growing evidence that companies with strong
CSR or sustainability reputations often find it easier to recruit and retain high quality
employees in tight labour markets. A 1999 study by the World Resources Institute (WRI)
and the Initiative for Social Innovation Through Business (ISIB) entitled Beyond Pinstripes
Preparing MBAs for Social and Environmental Stewardship found that graduates of MBA programs
look at corporate values in addition to other criteria (such as salaries, job responsibilities, etc)
in determining where to work. The Teck Cominco and Syncrude case studies support this
view. They note that CSR appears to be growing in importance as a factor that influences
individual choices of where to work. Syncrude notes that its CSR activities help it deal with
potential labour shortages in a market that is becoming increasingly competitive as new
capital projects worth $50 billion come on line in the next 15 years. A reputation as a good
place to work is also making it easier to attract people to move to a relatively remote region
of the country and work in what is perceived to be a relatively dangerous industry.

Competition for access to resourcesA good track record for managing social and
environmental performance and a demonstrated willingness to work with stakeholders to
address their concerns can enhance the success of bids when competing with others for
access to resources such as energy, minerals and forests. These advantages were noted by
Weyerhaeuser, Teck Cominco and Nutreco / Marine Harvest. Teck Cominco believes that
increasingly companies with good reputations will have more opportunities than their
competitors in terms of access to resources and project opportunities. The companys good
reputation for negotiating and honouring agreements with indigenous groups and
communities where they are ensured a share of the benefits (in terms of jobs, royalties, etc)
has helped it access mineral rights in new areas. Weyerhaeuser attributes the timely and
uneventful acquisition of MacMillan Bloedel in part to the reputation it had earned through
its CSR commitment and programs.

Access to markets/customersThe majority of companies interviewed felt that their
investment in CSR pays off in improved access to markets, including customer loyalty,
security in existing markets and attractiveness in new markets. VanCity noted that, although
the strictly values-based personsomeone who is willing to forego some return on his or
her investments to support programs that improve the environment or the lives of others
is probably only a small percent of the total market, they feel that their CSR work
nevertheless attracts new depositors as there is evidence that people look at what a company
is doing as a proxy for how they will be treated as customers. Dupont Canada believes its
programs help develop new market opportunities for the company. For example, Dupont
Canadas public Sustainable Growth Report has actually brought in new consulting work.

Corporate values: the right thing to doThe majority of companies interviewed
identified CSR as being the right thing to do. In a number of cases, CSR was very much a
part of the corporate identity. Husky Injection Molding sees itself as a leader in its industry
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and wants to maintain this position. Being a good corporate citizen is also a part of the
personal values of the companys president and CEO Robert Schad. At Home Depot,
corporate social responsibility has its origins in the values of its co-founders who came from
modest backgrounds and believed that a company should give back to the communities that
support it. For VanCity, CSR is strongly rooted in its origins as a cooperative committed to
working for the sustainable development of communities. The roots of Weyerhaeusers
corporate culture extend back to the values of the founding families (Frederick
Weyerhaeuser being the most prominent). A strong internal driver for the company from the
outset was to build a good reputation as its name reflected personally on the family who
founded the company.

Meet changing stakeholder expectationsAn important driver for many companies is
the expanding definition of who constitutes a stakeholder and the changing nature of their
expectations. Over the last decade, the definition of stakeholder has expanded beyond the
traditional stakeholder group of governments, shareholders and employees to include
environmental organizations, social activists, communities, suppliers, and other special
interest groups. This expanded group of stakeholders has become more global in its reach
and has a better understanding of business than ever before. More and more, stakeholders
want not only to be informed of businesss activities and performance, but also to be
involved in setting social and environmental performance objectives. VanCity has made
understanding the expectations of its stakeholders and incorporating these views into
governance and business planning processes the focus of its CSR work. Changing
expectations are a key driver that is encouraging Teck Cominco and others in the mining
industry to rethink how they do business. They are under pressure to demonstrate their
relevance to society and their capacity to respect and protect values that are important to
society. CPR is in the process of re-establishing communications with the communities that
neighbour its tracks following years of little direct contact, which created a gap in
understanding and increasingly vocal opposition to the rail companys operations. This is
driving an internal reassessment of the companys role and relationship to the broader
environment in which it operates.

Cost savings/improve the bottom lineWhile few studies have been able to conclusively
draw a positive correlation between an integrated approach to CSR and bottom-line
performance, there are many examples of the business benefits that results from individual
program areas that constitute CSR. While most companies interviewed reported that their
CSR programs had resulted in cost savings, the majority of these were attributed to
environmental programs. DuPont Canada, for example, has realized financial benefits
through waste and energy intensity reductions. A partnership between the company and
Collins and Aikman, an important customer, resulted in the establishment of recycle loops
for fluff type waste. The project team conducted a comprehensive environmental
assessment that alerted the team to an opportunity to divert 9 tonnes of fluff waste
through recycling, annually. Cost reductions total approximately $15,000 annually. The
contribution of investment in social programs to bottom line performance is less well
understood. Syncrudes CEO estimates that the success of its loss management program,
which addresses environmental, health and safety, saves the company $150200 million
annually due to improved efficiencies, reliability and insurance costs. Most companies
interviewed expressed a desire for more research into establishing the business case for CSR
in financial terms.
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Improved relations with stakeholders / dispute resolution / issues management
Most companies cite improved relations with stakeholders as an outcome of their CSR
activities. When stakeholders see that companies are open to hearing their concerns and
working with them to address them, trust is built which is invaluable to resolving disputes
and issues. CPRs work to re-establish channels of communication with municipalities and
communities is helping build the trust that will allow them to move from a situation where
disputes are resolved through the courts at a cost to all involved, to a more collaborative
approach where these can be addressed and resolved outside the courts. Often this approach
leads to innovative solutions that might not have been thought of otherwise. Its
demonstration of an eagerness to work with communities helped CPR with a major
derailment at Red Deer, Alberta, in February 2001, where the mayor of the city stood up to
defend the rail company by saying that the city shared some of the blame for having allowed
residential neighbourhoods to be built so close to the rail tracks.

Provide valuable input to strategic planning, as well as a better understanding of
sustainability issues facing the companyA number of companies noted that
stakeholder engagement was important to understanding sustainability issues. VanCity uses
the AccountAbility 1000 standard, an international process for accountability, auditing and
reporting which emphasizes stakeholder engagement as a means for aligning corporate
values and activities with stakeholder expectations. By following the process, VanCity
developed its Statement of Values and Commitments (SoVaC), the policy framework that
guides the credit unions business decisions. SoVaC is then used as the basis for its social
audit and reporting processes which feed into business planning cycles to drive improvement
in the organizations CSR performance. In this way, VanCity incorporates the views of its
stakeholders in its decision-making processes. Dupont Canada believes that collaborating
with external resources (NGOs, community groups, government, etc.) will help them better
understand sustainability issues and stakeholder expectations of their company. The
company is currently developing an advisory council to build understanding of complex
sustainability issues, enhance innovation and opportunity, and improve the quality and
integrity of outcomes associated with Dupont Canadas 2010 Sustainable Growth goals.

Stimulate innovation and generate ideasBy examining their core businesses through
the lens of corporate social responsibility, four companies found opportunity for innovation
and developed new business prospects. VanCity has used its focus on values as a source of
innovation. It was the first Canadian financial institution to offer socially responsibly mutual
funds; a values-based credit card (where a percent of profits is used to fund environmental
projects); self-reliance loans to small businesses without collateral; and, a number of
products designed to remove barriers to financial services experienced by marginalized
individuals. These innovative products have also helped create brand recognition for the
credit union and enhanced its reputation. TELUS notes that employees who enjoy their
work and feel that their employer respects and recognizes their contribution in the
workplace tend to be more innovative and dedicated to developing solutions to problems.
Dupont Canada believes that its Social Innovation Enterprise will assist the company with its
product innovation. Dupont Canada believes it can learn a great deal from NGOs, especially
in terms of the practice of collaboration, as a more intense form of stakeholder engagement.
Product and service innovation at Dupont Canada rely heavily on collaborative processes
among multi-disciplinary employees.
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Expedited permitting / Improved relations with regulatorsCompanies that
demonstrate they are engaging in practices that satisfy and exceed regulatory compliance can
develop better relations with regulatory agencies which can mean less red tape and scrutiny.
A number of jurisdictions are beginning to recognize and reward companies that have
demonstrated themselves to be socially and environmentally responsible by requiring fewer
inspections and paper work, and giving these companies fast-track treatment when applying
for operating permits and other forms of governmental permission. All but two companies
interviewed noted a link between their CSR activities and improved relations with regulators
and governments. Home Depot notes that its reputation of giving back to communities and
of being a good neighbour has helped the company obtain permits to open new stores, an
obvious advantage for a company that is planning to open 600 new stores over the next
three years. Husky recently expanded into Vermont, USA, a state with a particularly tough
regulatory environment. By demonstrating the companys Purpose and Values, the company
believes it had an easier time obtaining the necessary permits than might have been the case
otherwise. Syncrude and Teck Cominco observe that the increased trust and respect they
have developed with regulators has helped make regulatory processes more effective and
efficient. CPRs work to develop local dispute resolution mechanisms in cooperation with
the Federation of Canadian Municipalities and the Canadian Association of Municipal
Administrators will avoid the need for governments to intervene by imposing top-down
solutions

6.2 Risks of Not Adopting CSR
The principal drivers for companies to adopt or embrace CSR have been covered in depth in
the discussion above. Several business risks of not adopting CSR were also identified as
almost all of the drivers discussed above involve some element of avoiding risk. For
example:

Canadian Pacific Railway launched a process to re-engage communities at the local
level for resolving disputes as a means of avoiding intervention of the courts and the
imposition of government regulations which can add to the costs of doing business.
CPR noted that another rail company had had to put plans to open an intermodal
terminal on hold, perhaps indefinitely, for failing to engage communities effectively;
Marine Harvest believes that improving stakeholder dialogue will also work to reduce
misconceptions of the sector that have hampered growth for the company in the
past (consumer boycotts, government moratoriums, etc.); and
Syncrude estimates that its failure in 1993 to proactively engage residents in one of
its development applications cost the company $1.5 million in delays and wasted
effort in its development plans.

All ten companies interviewed identified clear risks to their business of not adopting CSR.
One example from each company is provided below.
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HuskyGiven recent air quality crises in Toronto and other parts of southern Ontario,
Husky feels it is only a matter of time before regulators are forced to react and pass strict
legislation related to air emissions. Companies that are not prepared will be forced to manage
the crisis and will have to expend time and money getting up to speed with the leaders who
are already meeting and exceeding compliance. Husky is going well beyond compliance to
manage its air emissions to avoid this business risk.

Marine Harvest/NutrecoNutreco has had to address many international issues
(consumer boycotts, seven year moratoriums, First Nations treaty disputes, etc). It
recognizes very clearly that the long-term security of the companys business depends on its
social license to operate from communities, regulators, NGOs, consumers and other
stakeholders. Nutreco believes that improving stakeholder dialogue will work to reduce
misconceptions of the sector that have hampered growth in the past. Therefore the company
is investing a lot of time and resources into managing the business risks resulting from not
engaging stakeholders effectively.

TELUSTELUS minimizes business risk using design-for-environment. TELUS took a
proactive measure (e.g., installing new fuel management/monitoring system for all fuel
storage tanks) even when short-term costs to the company were extremely significant.
TELUS indicated that the investment has already paid off in terms of preventing harm to the
environment and avoiding remediation costs and fines associated with previous spills.

WeyerhaeuserWeyerhaeuser recognizes that Aboriginal communities can directly
influence the companys access to resources and are part of the potential workforce. Their
needs and perspectives are therefore extremely relevant to the companys decision making.
Aboriginal communities are a source from which Weyerhaeuser draws employees, suppliers,
customers and contractors, so the ability to build and maintain effective working
relationships makes good business sense. Weyerhaeuser is placing a lot of emphasis on
improving its relations with Aboriginal communities because of this obvious business risk.

DuPont CanadaDuPont Canada listed a number of risks associated with not adopting
CSR: reputation, employee retention, missed business opportunities or growth in new
markets, competitive advantage, and financial performance. The company did not elaborate
on any of these in significant detail or provide specific examples. Generally speaking,
DuPont tends look at CSR in terms of the opportunities that can be realized from
sustainable growth.

Teck ComincoA key driver for Teck Cominco in advancing its CSR program is the
perceived lack of progress in the sector in addressing environmental and social impacts of
mining and metals production and use. Teck Cominco wants to avoid the business risk
associated with being a laggard, which it sees as being significant to investors, the financial
community, the government and NGOs.

VanCityPrimary motivators behind advancement of CSR measures in financial services
sector that relate to risk avoidance include: shareholder activism; reputation risk; threat of
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default; lenders liability; threat of financial loss; genuine concern for environmental impacts;
value creation opportunities; and, risk appraisal.

SyncrudeSyncrude believes it is avoiding business risk by providing a good quality of life
and work environment for employees. As the sector has some difficulty attracting and
retaining qualified, skilled employees, this will increase employee morale and productivity,
and will make the sector more attractive for new graduates. Labour shortages is a potential
business risk in the industry.

Canadian Pacific RailwayIn addition to the risks associated with poor stakeholder
engagement practices (discussed above) the potential for significant accidents involving the
transportation of dangerous goods is a real business risk for CPR in terms of reputation and
cost.

Home DepotConsumer interest in the environmental consequences of the products they
use has grown, which has led to the growth of a large industry to provide environmentally
preferable products. If Home Depot does not respond to this demand by offering
environmentally preferable products, it faces the risk of losing business to other competitors.
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Table 6: Business Value of CSR
Company

Benefits & Drivers
TELUS Weyerhaeuser Syncrude Husky Nutreco Teck
Cominco
VanCity CPR

Dupont
Canada
Home
Depot
Maintain or improve corporate
reputation and brand image

Compliance with government regulation
Earn and maintain social licence to
operate

Improve reputation with financial
community: investors, bond agencies,
insurance agencies and banks

Reduce business risk
(e.g., project cancelled, spill, PR disaster)

Attract & maintain skilled employees
Employee morale & productivity
Competition for access to resources
Access to markets/customers
Corporate Values
the right thing to do

Meet changing stakeholder expectations
Cost Savings / Improve the bottom line
Improved relations with stakeholders /
dispute resolution / issues management

Provide valuable input to Strategic
Planning, and an understanding of
sustainability

Stimulate innovation, and generate ideas
Expedited permitting / Improved
relations with regulators

7 Change Management: Success Factors and Challenges
This section describes the success factors and challenges identified by case study companies
as they implement CSR. Table 8 at the end of the section summarizes the success factors for
implementing CSR within their organizations. Challenges are discussed as they relate to
success factors, since success can be attributed to overcoming challenges.

The success factors identified by participating companies can be loosely organized according
to the conceptual model shown in Figure 1 below, which proposes that there are five key
ingredients to effect complex change, such as CSR, within an organization. These are that
change requires a combination of:
an overarching vision that clarifies the direction in which the organization needs to
move. Senior management or CEO commitment is important for ensuring that this
vision is embedded within the organization;
internal skills needed to make the transformation, including supporting tools and
information;
incentives for changing behaviours to align with the vision and new objectives of
the organization. Related to this is the notion of obtaining employee buy-in;
adequate resources assigned to the change effort;
and an action plan that lays on in concrete terms how the change will move
forward with responsibilities assigned.
Figure 1 shows the effects of missing elements on the change process. For example, without
a clear vision, the transformation process can dissolve into a list of confusing and
incompatible projects that can take the organization in the wrong direction or nowhere at all.
These five elements are by no means the only way to understand the many factors that can
contribute to success in transforming an organization, but they represent one framework for
organizing the many success factors identified by the companies interviewed on their journey
towards CSR.

Figure 1Managing Complex Change
Vision Skills Incentives Resources Action Plan Change
Skills Incentives Resources Action Plan Confusion
Vision Incentives Resources Action Plan Anxiety
Vision Skills Resources Action Plan Gradual
Change
Vision Skills Incentives Action Plan Frustration
Vision Skills Incentives Resources False Starts
Source: Modified fromAdams, Kingsley and Smith

Vision and High Level Commitment to CSR
All companies interviewed recognized that having a vision and high-level commitment were
necessary for transforming their organizations 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. These companies noted that senior management commitment can
be reinforced by external recognition and awards that tell company leadership that it is doing
the right thing. Involvement of senior management in external CSR-related events, either as
presenters or participants, also serves to increase levels of enthusiasm for CSR. These
activities were particularly useful in obtaining buy-in from those members of senior
management who were not 100 percent on board.
Seven out of ten companies had developed some sort of vision for the companyexpressed
through either a vision or value statement or a set of environmental and social policiesthat
clarified its role in, and responsibility to, society. Six companies noted that stakeholder
engagement processes were important in helping them define their vision and policies and
for providing important input into managing performance improvements. All companies
supplemented their visions, values or policy statements with guiding principles such as codes
of business conduct / ethics or specific commitments for living out their values. For
VanCity, a crucial step in its journey towards embedding CSR into its core business activities
was the development of its Statement of Values and Commitments, which articulates how
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the credit union will live up to its values and mission. SoVaC provides the credit union with
a vision of CSR and a framework for aligning internal activities and behaviour with that
vision.

Companies differed in how they communicate their vision or values. For some companies,
commitments are reflected in one vision statement or policy, whereas other companies refer
to a number of high-level guidance documents as providing the basis for their CSR activities.
Table 7 summarizes the format or means of expression that each company uses to
communicate its CSR commitments and values to internal and external stakeholders.

Table 7: How Companies Communicate their CSR Vision and Values
Company How Vision or Values is
Communicated
Specific Comments
Canadian
Pacific
Railway
Corporate Values Statement and Code
of Business Ethics.
Values Statement outlines the companys
main commitments, grouped in 5 major
areas. 3 areas deal explicitly with companys
relationship to communities.
DuPont
Canada
Direction Statement (used for more
than 15 years) and now DuPonts
Sustainable Growth Mission
Direction Statement is foundation of CSR
commitment. Goals, pursuits and metrics
(econ, env, and social) for 2010 have been
developed to help DuPont Canada meet its
Sustainable Growth Mission.
Home
Depot
Canada
Home Depot Values (Values Wheel). Home Depot does not have a formal CSR
policy or vision. However, its Values Wheel
spells out its commitment in important
CSR areas and provides a focus for the
companies CSR-related work.
Husky
Injection
Molding
Purpose and Values Statement Statement contains 5 core values which
influence all corporate strategies and guide
behaviour of employees
Nutreco
Canada /
Marine
Harvest
Nutreco Credo and Code of Ethical
Conduct
Credo outlines companys understanding
and acceptance of its responsibilities
towards people and planet. Code of Ethical
Conduct lays out requirements and
expectations of company and employees.
Syncrude Vision and Values Statement Values are supplemented by 8 guiding
principles that outline expected behaviour
of employees.
Teck
Cominco
Charter of Corporate Responsibility and
Code of Business Practices: EH&S
The Charter contains 6 commitments which
guide the companys activities (strategic),
and the Code consists of 11 policy
statements designed to help implement the
commitments outlined in the Charter (more
operational).
TELUS Expressed through various policies
on health, safety, ethics,
community investment and
environment.
In company reports, TELUS has outlined
its commitment to CSR as being
responsible to communities, environment
and its people.
VanCity
Financial
Statement of Values and Commitments
(SOVAC)
SOVAC provides coherent framework for
business decisions and commits to
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Table 7: How Companies Communicate their CSR Vision and Values
Company How Vision or Values is Specific Comments
Communicated

continuous improvement of the credit
unions social, environmental and
economic performance. SOVAC also
establishes scope and boundaries for its
social audit process.
Weyerhae
user
Company Values (developed 10
years ago) have now been
translated into the companys Road
Map for Success. Weyerhaeuser also
has a code of ethics and business
conduct called Our Reputation, A
Shared Responsibility.
Road Map sets out companys business
goals and commitments (covers economic,
environmental and social goals). The Road
Map is intended to provide direction for all
employees, also used as management tool
to guide and communicate company vision.

Developing Corporate CSR Vision and Values
Most companies acknowledged that they have had corporate values statements and other
numerous policies in place for decades, in some cases since their inception (e.g. health and
safety policies, human resources policies, etc.). However, the incorporation of CSR
principles or fusion of social and environmental commitments together with economic
business objectives has been a relatively recent occurrence. Each company interviewed is at a
different point in its journey and at a different stage of incorporating CSR into its core
business objectives. A number of companies have begun to move toward formally
integrating and monitoring progress towards social, economic and environmental
commitments in the 00s. Weyerhaeusers Road Map for Success and DuPont Canadas
Sustainable Growth Mission, goals, and pursuits were developed around 2000. VanCity also
created its Statement of Values and Commitments policy framework in 2000. Teck Cominco
developed its comprehensive Charter of Corporate Responsibility in 2001.

The individuals responsible for developing these values statements or visions also vary from
company to company. At Husky, the companys Purpose and Values were developed by senior
managers and then communicated to employees. For DuPont, the parent company
developed the Direction Statement (15 years ago), and the overall Sustainable Growth Mission (in
2000-2001). DuPont Canada however built upon the pursuits and metrics set out by the
parent company and added supplementary pursuits and metrics it felt were important to live
out its own Sustainable Growth Mission. All business units at DuPont Canada were involved
in the development of these pursuits and metrics. Nutreco headquarters developed the
Nutreco Credo and overarching CSR objectives to guide each company, yet each company
has the autonomy to work towards its own CSR priorities. VanCity and CPR involved as
many employees as possible in the development of their corporate wide CSR commitments.

Communicating Vision and Values to Employees and Other Stakeholders
Each company acknowledged that there needs to be both formal and informal methods of
communicating the companys CSR vision or values to internal and external stakeholders.
Husky places significant emphasis on the fact that living out the Purpose and Values is a
responsibility of every employee and these values are introduced to prospective employees in
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the interview stage, even before they are hired. Several companies (Home Depot, Syncrude,
Nutreco) indicated that they also introduce the corporate CSR values or vision to employees
early on, for example during training for new employees. Syncrude even prints its corporate
Vision and Values on the backs of employee identification cards as a means to integrate CSR
into all core business practices. Most companies identified that they use other methods --
CEO addresses, newsletters, websites, and CSR or sustainability reports -- to communicate
high-level CSR vision and strategies to employees and that it is not enough to simply present
the vision or values and expect employees to begin integrating them into daily routines.
Companies recognize that it will take time to convey the messages properly, and provide
necessary tools, in order for employees to incorporate the vision and values into their
business practices.

Methods of communicating corporate wide CSR vision or values to external stakeholders
(shareholders, media, regulatory authorities, public interest groups, etc.) identified by
companies interviewed include corporate reports, websites, newsletters, and presentations at
conferences or other meetings such as annual meetings. Nutreco launched a unique initiative
to help communicate its corporate wide CSR commitments. Nutrecos utilizes Corporate
Reputation Officers (CSROs), who seek to ensure that all aspects of the companys business
practices are fully communicated through continuous dialogue with all stakeholders.

Benefits of Having Corporate Vision or Values
Companies identified several benefits of having a corporate wide CSR vision or values
statement. These are described below:

Several companies indicated that developing corporate vision or values statements was a
good exercise to go through as it is represented an opportunity for employees and executives
to get together to discuss key issue areas for the company. Once these are determined, it is
easier to decide where to allocate time and resources and keeps employees and management
focused on common end goals (even when key individuals come and go). For Teck
Cominco, the development of its Charter of Corporate Responsibility came at an important time,
during the merger between Teck Corporation and Cominco Limited. The shared
development of the Charter ensured that the business objectives of the two companies were
aligned, and that the new company integrated existing CSR programs andpolicies. For
VanCity, the development of its Statement of Values and Commitments (SOVAC) influenced the
company to think about what being a socially responsible corporation means. The company
was in the midst of trying to develop an ethical policy when it realized it needed to define its
underlying values, what it stood for, before developing more specific policies or action plans.
For VanCity, all CSR activities flow from SOVAC.

The majority of companies agreed it was also beneficial to have a corporate wide CSR
commitment to ensure consistent, responsible, corporate behaviour across all operations,
especially for companies who operate globally. These high level statements or policies
outline expectations of employees and the company as a whole, regardless of where they
operate. This idea of consistency is also important if leaders of business units or departments
do not share the same commitments or philosophy on CSR. Having a corporate wide
statement or commitment holds all employees and managers accountable.

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The other major benefit of formalizing a companys commitment to CSR through vision or
values statements is moving away from a more ad hoc approach to improving social,
environmental and economic performance to a situation where these values and
commitments become more integrated into the way these companies conduct business.
Three companies, DuPont, Weyerhaeuser and VanCity have taken steps to integrate
environmental and social commitments into overall business objectives. The goals, pursuits
and metrics associated with DuPonts Sustainable Growth Mission are quite similar to the goals
outlined in Weyerhauesers Road Map for Success. Both provide the companies with a
framework or direction for all employees and is used as a management tool to guide and
communicate the company vision. More importantly, these two companies review these
frameworks (Sustainable Growth Mission, Road Map for Success) to evaluate progress towards the
companys commitments each year. Success for these companies is not defined on profits
alone, but on achieving or making progress towards other social and environmental
commitments. VanCity utilizes a social audit process, based on AccountAbility 1000, to
continually improve its performance at living up to its CSR commitments. Action plans and
performance targets are outlined in the social audit, and progress towards these (results of
audits) is integrated into the business planning process. Imbedding CSR commitments or
values into overall corporate business objectives is a definite challenge, but these companies
are rising to meet the challenge.

Skills, Tools and Information
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. Three companies (Syncrude,
VanCity and CPR) spoke of the value of external benchmarking activities and participation
in external CSR-related events where they can share success stories with their peers and
implementation challenges. Two companies (VanCity and Teck Cominco) use their
sustainability reports as an internal management tool to drive performance improvements
along the triple bottom line.
Six companies mentioned that success in managing improvement in CSR performance
requires setting measurable targets within fixed timetables and clear responsibilities. To
work, targets assigned to individuals need to be realistic and achievable. At TELUS, it has
been at times difficult to get commitment from employees to meet targets if they feel that
the targets are not achievable and that, by not meeting the targets, they will lose points or it
will reflect badly on their performance evaluations. This points to the importance of
consulting broadly within the organization when setting targets to ensure that there is buy-in
for the targets and that those responsible for meeting the target feel they are reasonable and
doable. All companies were struggling with defining meaningful and measurable indicators
of social performance. For some companies, CSR goals can come in conflict with the
performance goals of employees. For example, at Home Depot, this has made it difficult to
get buy-in on CSR programs from store and middle managers if their performance is judged
on bottom line results.
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Most companies interviewed have solid environmental management systems in place, which
have the benefit of a well-developed and well-accepted set of indicators for measuring
performance. The majority of companies interviewed do not have equivalent metrics to
measure social performance. Without meaningful social indicators it is difficult for
companies to monitor performance and incorporate targets into business plans and
accountability systems. VanCity which employs a social audit process to manage its social,
economic and environmental performance notes that, even when measures have been
defined, collecting the needed data is time- and resource-intensive and that companies need
help in developing data collection systems that are more efficient.

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. For example, Husky introduces its Purpose and Values
when interviewing potential new employees, which helps ensures that the majority of Husky
employees are already supportive and have bought in to the companys CSR approach to
doing business before they even start working for the company. 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.
CPRs board of directors introduced environmental performance targets in bonus systems of
members of the executive team, and has introduced community relationship development
objectives into the business plans of each service area of the company. These service areas
must work with the companys CSR group to resolve two community issues by years end.
VanCitys Accountability Report, which reviews the companys performance relative to its
CSR commitments and sets out new commitments for the coming years, clearly assigns each
target or action plan to an individual in the organization. As noted above, targets assigned to
individuals must be realistic and achievable. Syncrude uses a gain-sharing program to
encourage its employees to exceed its EHS targets.

Seven companies operate internal training programs geared towards increasing employees
awareness and understanding of the companys vision, values and policies and their
relationship to the companys core business practices. These often include presentations by
the CEO and president to further drive home the importance of CSR to the companys
business objectives and helps promote buy-in among employees. Regular communications is
an important tool for maintaining the momentum of any change initiative and for increasing
understanding of how a companys vision and values relate to the day-to-day activities of
employees. VanCity uses corporate-wide memos, email, voicemails and newsletters to link
any initiative or activity discussed in these communications to the credit unions Statement
of Values and Commitments. Three companies (VanCity, CPR and Syncrude) involved their
staff in developing their visions and values, which ensures employee buy-in at an early stage.

A majority of companies (eight of ten) identified other activities that help motivate staff and
increase the level of enthusiasm for their CSR objectives. TELUS, Syncrude and VanCity all
have CEOs who are champions of CSR and use speaking engagements or visits to business
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units and company departments to repeat the message that CSR is good for business. They
also take a personal interest in making sure that their employees have the resources and
encouragement they need to make change. Sharing success stories and celebrating small wins
were also identified by companies as important to maintaining enthusiasm and momentum
for CSR among employees, and provides an opportunity to learn from each others
experiences.
A challenge noted by Teck Cominco and CPR related to changing old habits. Teck Cominco
has encountered resistance from project managers as it tries to implement its commitment to
using local suppliers and contractors. A natural tendency among people is to use the
suppliers and subcontractors that have delivered in the past and with whom they have
usually developed good personal relations. Teck Cominco is addressing this by ensuring that
procurement staff are brought in early in the mine development process so that they
understand the needs and capacities of the community and help educate local suppliers in
terms of meeting the needs of the company. For CPR the challenge lies in changing a
corporate culture that has been around for more than 120 years and which has for the
greater part of its existence been successful without any need to engage in communities. This
is compounded by a relatively old work force whose average age is 47 years that is set in
its ways.

Resources
While no company explicitly identified adequate resources as a success factor, a number
expressed concern that not enough resources were made available. CPR, Home Depot and
TELUS noted that their CSR programs were in-need of more resources.

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Table 8. Organizational Success Factors Identified

Company

Success Factor Identified
TELUS Weyer-
haeuser
Syncrude Husky Marine
Harvest/
Nutreco
Teck-
Cominco
VanCit
y
CPR

Dupont
Canada
Home
Depot

High-level Commitment and Vision

Senior Management / CEO Commitment

CSR part of governance mandate of company

Values, Vision or Policy Statements

Recognition for company for good practiceserves to reinforce senior
commitment, that company is doing the right thing

Involvement of CEO, president or senior management in external CSR-
related eventsto increase senior management commitment

Values or policy statement translated into clear commitments, expectations
or guiding principles such as a codes of business conduct and ethics

Formalized stakeholder engagement program / Early stakeholder
engagement

Skills, Tools & Information

Having the right people (committed, understand the issues, interpersonal
skills)

Exposure to different functions in career development to build holistic
employees

Sharing best practice among companies / benchmarking / success stories

Reporting as an internal tool for managing performance

Various training programs (mainly EH&S)

Setting measurable targets

Performance indicators

External benchmarks & guidelines

Incentives / Motivational Factors / Employee Buy-In

Employee Recognition Programs (awards, badges, letters from president)

Accountability measures for senior management / responsibility clearly
assigned

Performance incentives (e.g., gain-sharing)

Publishing CSR report as a tool for increasing internal awareness & buy-in

Awareness-raising programs geared at employees understanding company
V l CSR h b fi d i

Table 8. Organizational Success Factors Identified

Company

Success Factor Identified
TELUS Weyer-
haeuser
Syncrude Husky Marine
Harvest/
Nutreco
Teck-
Cominco
VanCit
y
CPR

Dupont
Canada
Home
Depot
Values, CSR approach, benefits and expectations

Regular communication from CEO to staff on CSR

Having an internal championtruly committed

Share success stories internally motivates staff, shares how-to

Expose employees and management to stakeholders

Involvement of staff in development of corporate values

CSR firmly a part of corporate identity

Resources

Adequate resources assigned to CSR programs

Action PlanSystems and Programs

Expectations of employees is clear

Build objective it into business plans slowly

Management culture views mistakes as an opportunity to learn and improve
programs and policies

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8 Role of Government in Supporting CSR
The ten companies interviewed were all asked how they thought the federal government
could support organizations with the implementation of CSR. Table 9 summarizes the main
roles that were identified by two or more companies. Any other recommendations that were
suggested by only one company can be found in individual company case studies.

Table 9: Potential Roles of Government
% of
Companies
indicating
Act as a role modelcommunicate what government is doing 50%
Clarify what CSR means: expectations; make sense of competing terms &
standards
40%
Disseminate best practices (e.g., through case studies) 50%
Help level the playing field, to give leaders competitive advantagee.g., set
minimum standards without being prescriptive; enforce regulations
20%
Recognize companies that are leaders in CSR / provide incentives 50%
Promote interdepartmental cooperation and coordinationavoid duplication 30%
Help brand Canada as a leader in CSR 20%
Help define the business case for CSR 30%
Develop and / or support programs that help companies with CSR (e.g.,
roundtables on CSR; partner with organizations already working in this area,
help with developing CSR metrics, etc.)
50%
Encourage public reporting on economic, social and environmental
performance
20%

Act as a role modelHalf of the companies interviewed indicated that they thought the
federal government should be a role model for CSR. Teck Cominco felt that if companies
are expected to be better citizens then governments should also meet these same
expectations. Husky Injection Molding felt that the government could be a better
environmental role model and is pleased with recent priority the government has placed on
meeting the targets set out in the Kyoto Protocol. VanCity also felt that government should
develop its own CSR programs and follow leading companies (e.g., develop a set of values,
specify commitments for how to live out those values, etc.).

Clarify what CSR meansFour companies suggested that the government could help
them figure out what exactly CSR means and help clarify what the expectations of
organizations are under the umbrella of CSR. Dupont Canada believes there is confusion
among corporations who are trying to differentiate between competing terms such as
sustainability, sustainable development, and corporate responsibility, among others.
Weyerhaeuser feels that there may also be a role for national governments to work together
on CSR with other international bodies to establish a global CSR standard or code of ethical
business conduct so that companies would be clear on what is expected of them and have
one internationally accepted code to meet.

Disseminate best practicesHalf of the companies interviewed believed that government
could support organizations in the implementation of CSR by publishing best practice case
studies. Disseminating best practice case studies on eco-efficiency and CSR helps companies
like TELUS convince its management that there is a business case for CSR. Home Depot
and Weyerhaeuser also felt that publishing additional company case studies on CSR helps
other companies learn how other companies are tackling similar issues that they are facing.

Help level the playing field, build convergence on minimum standards to give
leaders competitive advantageSome companies felt that being socially responsible
could put them at a competitive disadvantage vis--vis free-riders. At some level, there is a
need for a set of minimum standards to level the playing field. Marine Harvest noted that the
poor performance of some businesses in the industry tarnished the reputation of the sector
as a whole, making it very difficult to enter into constructive dialogue with stakeholders.
Dupont Canada feels that government has a role in creating conditions that give competitive
advantage to those companies that go beyond compliance. Dupont Canada agrees that
regulations are needed in some cases but questions whether it is really worth having
regulations when little to no enforcement occurs. Companies that see themselves as leaders
do a lot of work to comply with, and go beyond, regulations, while others that put in
minimal or no effort to comply with regulations and get away with doing nothing. This puts
companies that go the extra mile at a competitive disadvantage. Weyerhaeuser also
recognizes that regulations are good in some cases to even out the playing field but cautions
that regulations need to be outcomes-based and not too prescriptive.

Provide incentives/recognition to CSR leadersTo also support the implementation of
CSR practices within companies, 5 companies felt that the federal government should
recognize those companies that demonstrate high levels of performance and consistently go
beyond compliance. Nutreco suggested that companies are like people, they need and enjoy
getting recognition for hard work. Recognition is the best incentive. VanCity gave a specific
suggestion to expand the Ethics in Action awards across Canada, which rewards and
recognizes companies that are good corporate citizens. Currently, the awards program only
operates in western Canada. Dupont Canada also believes that positive feedback and
recognition go a long way in terms of employee morale, and it also creates an environment
where employees want to continue looking for ways to be better corporate citizens.
Syncrude felt that governments should provide incentives to companies that go beyond
compliance in the form of tax breaks or other financial benefits. Other companies also raised
the idea of financial incentives but indicated that government should work together with
industry sectors to determine sector-specific incentives.

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Promote interdepartmental cooperation and coordinationThree of the companies
interviewed indicated that if the federal government is going to proceed with a CSR strategy
or national plan, than the departments should continue to work together and develop a
common understanding and approach. Nutreco suggested that better coordination and
cooperation among departments could help free up time and resources that the company
could then devote to strengthening business operations as well as to being a better corporate
citizen. Teck Cominco also reaffirmed this by saying that departments need to be on the
same page with respect to a CSR strategy to avoid duplication and overlap.

Help brand Canada as a leader in CSRTwo companies (VanCity and Nutreco)
suggested that there are great opportunities for the federal government to brand Canada as a
leader in CSR. Nutreco put forward the idea that if Canada as a nation marketed itself as a
CSR leader, Canadian companies could promote their products or services as CSR friendly
and develop competitive advantage internationally. VanCity felt that creating a Canadian
brand of CSR would simply be the right thing to do. The Government of Canada could get
the word out and be a role model for the rest of the world to model. Developing this type of
national CSR image would also provide incentives to attract other companies that are good
corporate citizens to Canada.

Help define the business case for CSRMost companies interviewed expressed the
desire to have a business case that ties investment in CSR programs to business value. While
many companies have strong CEO commitment to CSR and therefore a less pressing need
the business case, they all recognized that having the business case would allow them to push
the envelope further. The business case is particularly important in times when profits are
down and all programs come under scrutiny. TELUS noted that CSR and sustainability are
viewed as a way to manage risk, and that having a solid business case could help change the
existing mindset to view CSR in terms of business opportunities.

Develop and / or support programs that help companies with CSRMany ideas
emerged for specific programs or support that companies need. In an overarching sense,
Home Depot suggested that government could coordinate round tables with companies to
come up with a national CSR strategy for Canada. More specifically, CPR mentioned that
any help with developing CSR metrics and indicators would be valuable, as well as
opportunities to be involved in benchmarking studies. VanCity suggested that the
government could partner with associations/organizations that provide tools and resources
for implementing CSR, and specifically noted that any guidance on how to collect data
(especially social indicators as the area is so new) would be helpful.

Encourage public reportingCPR feels that the government can do a lot to encourage
more companies to report on their environmental, economic and social performance,
without over-regulating on CSR. VanCity also felt that the government should promote
more companies to report and offer support to build capacity for reporting. VanCity has
learned that reporting is a good internal management tool and that government should get
the word out that reporting is more than just a PR tool or a means to increase transparency.

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9 Conclusion
This study was conducted in a changing landscape of how stakeholders view the role of the
corporation in society. The case studies support the view that stakeholders are taking a
broader perspective of corporate responsibility that incorporates not only economic
performance, but also environmental and, increasingly, social performance factors. Recent
corporate failures have also illuminated the importance of corporate governance practices.
At the same time, corporate social responsibility approaches, tools and concepts are
becoming increasingly important to companies who want to maintain or increase their
competitiveness in the global marketplace. There has been an explosion of definitions and
implementation guidance on CSR.

While many companies, governments and other policy organizations are taking proactive
approaches to CSR, it is clear from this study that implementing CSR approaches within
companies represents a significant change management challenge. While the business case
may be becoming clearer, implementation of CSR requires more exploration.

The drivers for CSR identified by companies in this study provide important information
that will help determine the best approach for Canada to take on CSR. However the case
studies also illustrate that interpretations of CSR vary. Different terms such as sustainable
growth, corporate responsibility, core values are used to describe activities that fall under the
scope of CSR. Work is needed to develop a broader understanding of CSR, and perhaps
some measure of consensus on the scope of corporate responsibility. Organizations such as
Canadian Business for Social Responsibility and the Conference Board of Canada have
initiated work to develop some consensus on the meaning and scope of CSR, which will be
helpful for defining what the appropriate roles of different sectors of society should be in
advancing CSR.

This study was an opportunity to solicit views and experiences from companies operating in
North America so that decision makers can better understand the drivers, challenges and
benefits of implementing CSR. It also helped identify opportunities (e.g., for training and the
development of programs to support implementation) for the Canadian government to
facilitate the adoption of best practices by companies further behind on the learning curve.
However, the study also demonstrates that even leading companies can benefit from
programs that support implementation of CSR. The recommendations from the case study
companies on the role of government (see Section 8) are relatively straightforward and they
provide guidance to government on the direction governments should take in fostering CSR
within Canadian industry.

The case studies provide compelling stories and evidence of the importance and benefits of
adopting CSR. There is an opportunity to utilize this information to address some of the
recommendations on the role of government in CSR. In particular, the case studies are
particularly relevant for the dissemination of best practices and the development of the
business case for CSR.

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Finally, it should be noted that this study focused exclusively on the positive aspects of CSR.
Its intent was not to take a critical look at the role of industry in society. For example, the
case study companies were not challenged on specific negative impacts of their operations,
rather the focus of the case studies was on what the companies thought they did well. A
critical analysis of what they did not do so well would provide some balance to the results of
this study.

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Appendix 1: General CSR Interview Outline

1. Introductions

2. Overview of CSR project & purpose of interview

3. Opening

Before getting into the details of Corporate Social Responsibility (CSR) within the company,
could you tell us briefly about your role and responsibilities, and how you came to be in
this position?

4. The Journey

Perhaps a starting point would be for you to describe "the journey" toward CSR in
________________ (the company)? How did your involvement in CSR begin?

What major steps has your organization taken in its evolution towards CSR policy and
programs?

What were the significant turning points?

5. Vision and Policy

What is the formal company vision and policy toward CSR?

How was this vision and policy developed?

What does CSR encompass for the company (i.e., community relations, employees
relations, environment, governance & accountability, supplier relations etc)?

6. CSR Program Areas

The following are program areas for CSR where companies are active. Please think about
which you think are best practice areas for your company and select 2-3 to discuss in detail
during the interview. Please do not feel limited to examples provided in table below. For the
program areas you select to talk about, please consider the following questions.

Describe the companys activities in the areas (identified above). How have they
evolved?

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Have there been any business benefits accruing from this decision? What are they? Can
they be documented and demonstrated? What about the costs?

What have been the challenges? How were these overcome? How could they be
overcome?

MAIN AREAS OF CSR IN WHICH THE COMPANY IS ACTIVE ()

Communities & Broader Society
Local hire
Local purchasing
Philanthropy and priority issues
Health issues (clean drinking water
etc)
Education
Work Schedules Tailored to Local
Needs
Community Consultation
Supplier Diversity
Emergency Response Programs
Indigenous Peoples Programs
Human Rights Monitoring
Community Development
Programs
Social Impact Assessment
Substance Abuse/Family Violence

Employees
Workplace Diversity (Esp. in
Management)
Work-Life Balance (flex time, job
sharing etc.)
Profit Sharing/Share Options
Full Benefits for Part-time
Employees
Training/Career Advancement
Incentive Programs
Employee Participation in
Decision-Making
Occupational Health and Safety
Employee Satisfaction Surveys
Collective Bargaining
Employee Assistance Programs

Customers / Stewardship

Product Stewardship Programs
Labeling Programs
Health and Environmental
Information on Products & Services
Involvement of Customers in
Product Development
Customer Screening
Communication with Customers on
Companys Standards (e.g.
procurement)

Shareholders

Here we are looking for any
information on activities or
programs that the company
implements to involve
shareholders in non-financial
matters. As well, any information
on how the company makes
information available to minority
shareholders (those not holding
majority of voting shares or
having significant influence over
board decisions) that allows them
to effectively participate in
company decisions.

60 / 68
Governance / Code of Conducts

Code of Ethics
Support Systems for Code of Ethics
Accountability Systems
Investment Screening (HR, Envt,
etc)
Stakeholder Engagement

Surveys
Advisory Boards
Joint Committees
Web-based communications
Town Hall Meetings

Environment

Design for Environment
(Development of Eco-Efficient
Products)
Greenhouse Gas Programs
(Measurement, Reporting, Trades,
Off-Set Projects)
End-of-Life Mgmt (Product Take-
Back, Recycling,)
Alternative Energy Programs
(Purchasing, R&D)
Green Procurement Program
Resource Efficiency Programs
(Water, Materials, Energy)
Internal Recycling Programs
Emissions Management (Air, Land,
Water)
Toxics/Hazardous Waste
Management
Transportation & Distribution
(Logistics, Employee
Transportation, Information
Technologies)
Environmental Evaluation of
Capital Investments/Projects
Industrial Ecology/By-Product
Synergy Programs

Public Reporting

SD Data Integrated into Annual
Reports
Separate Environment Reports
Separate SD/CSR Reports
Any Combination of Soc, Econ,
Envt
Web-site
Reports tailored to local facility
VCR reporting
Various reports to Government

Suppliers
Supplier screening (Envt, Working
Conditions, Child Labour)
Supplier Communications
Supplier Audits Internal or Third
Party
Supplier Training/Working with
Suppliers to Improve Performance

Other?
61 / 68

7. Change Management

Overall, what do you feel have been or will be the main organizational challenges for
your company as it implements or broadens its CSR activities (these could be internal as
well as external)?

How has the company had to change to implement CSR activities and how did the
company go about realizing these changes? (Also how will the company have to change
in the future?)

8. Role of Government/Other Organizations

What role can the government or other organizations play to assist companies with the
implementation of CSR?

9. Wrap-Up

What do you feel have been the overall benefits of the initiatives the company has
undertaken so far?

Do you feel that having this CSR strategy and undertaking the aforementioned
initiatives/programs has helped or will help the company gain competitive advantage?
Other future opportunities?

What do you think the trends will be for companies with respect to adopting CSR
practices? Overall, what will be driving this trend?

Are there any additional questions you feel we could have asked?

On behalf of the company, or yourself, would you like to add any final comments?

62 / 68

Appendix 2: Company Contacts

Company Contact(s) Interviewed Position

1

Weyerhaeuser

Dave Larsen
2nd. Floor
925 West Georgia
Vancouver, B.C. V6C 3L2
dave.larsen@weyerhaeuser.com

Vice President
Government & Public
Affairs

2

DuPont Canada

Jennifer Hooper
505 Front Road
Kingston, Ontario
K7L 5A1 Canada
jennifer.hooper@can.dupont.com

Colleen Brydon
Research & Business Development
Box 2200 Streetsville
Mississauga, ON
L5M 2H3

Rhonda Carlin
Research & Business Development
Box 2200 Streetsville
Mississauga, ON
Canada L5M 2H3
Rhonda.G.Carlin@CAN.dupont.com

Director, Corporate
Safety, Health &
Environment

Manager Social
Innovation Enterprise

Corporate Business
Sustainability Resource

3

Nutreco/Marine
Harvest Canada

Vivian Krause
1100-1200 West 73rd. Ave.
Vancouver, BC
V6P 6G5
vivian.krause@nutreco.com

Business Unit
Corporate
Development

4

Syncrude

Jim Carter

Barbara Shumsky
PO Bag 4023

President and COO

Manager, Government
& Public Affairs
Colleen.M.Brydon@CAN.dupont.com
63 / 68
Mail Drop 1000
Fort McMurray, Alberta
Canada T9H 3H5
bshumsky@syncrude.com

5

Teck Cominco

Dave Parker
600-200 Burrard Street
Vancouver, B.C.
V6C 3L9
david.parker@teckcominco.com

Manager Regulatory and
Public Affairs

6

Husky Injection
Molding

Dirk Schlimm
500 Queen Street South
Bolton, Ontario
Canada L7E 5S5
dschlimm@husky.ca

Vice President Human
Resources

7

VanCity

George Scott
george_scott@vancity.com

Tim Reeve
183 Terminal Avenue
Vancouver, BC
Canada V6A 4G2
Tim_Reeve@vancity.com

Senior Vice President,
Corporate & Marketing

Values Alignment
Manager

8

CPR

Tyra Henschel
tyra_henschel@cpr.ca

Mark Seland
Suite 500
Gulf Canada Square
401 - 9th Avenue SW
Calgary, Alberta
Canada T2P 4Z4
Mark_Seland@cpr.ca

General Manager,
Communications &
Public Affairs

Public Affairs

9

TELUS

Patricia Mackenzie
Corporate Environment
32W-10020 100 Street

Assistant Vice President
Environment
64 / 68
Edmonton, Alberta
T5J 0N5
patricia.mackenzie@telus.com

10

Home Depot

Mary-Alison Pejskar
426 Ellesemere Road
Scarborough, ON
Canada M1R 4E7
mary-alison_pejskar@homedepot.com

Cathi Cahn
Atlanta, Georgia, USA
cathi_cahn@homedepot.com

Community Affairs
Manager, Canada

Manager-Community
Relations

65 / 68
Appendix 3: External Viewpoints
During the main interviews, case study companies were asked to provide the names of
stakeholders that the researchers could contact for external viewpoints on participating
companies. Where these were provided, follow-up interviews were conducted, from which
the quotes that follow were taken.

On Home Depots work in the community

Home Depot is a fantastic partner. There is a great fit between Home Depot and Habitat for
Humanity which is founded on a common belief that well-run NGOs can make a difference in
addressing social and environmental issues and commitment to creating affordable housing in Canada.
Home Depot supplies Habitat for Humanity with merchandise for its re-stores, and donates cash and
volunteer hours to building affordable housing.

David Hughes, President & CEO, Habitat for Humanity

They have had tremendous support from Home Depot. Home Depot is one of those companies that is
really committed to action at the community level. Home Depot has seen the big picture of how they can
leverage their support to promote outdoor activities at the local level in Canada. Go for green is very
happy with the support and work they have done with Home Depot.

Steve Grundy, Go For Green

Nutreco/Marine Harvests Commitment to Partnering with First Nations
Communities

What really makes the relationship work is the respect that Marine Harvest gives to the Kitasoo
First Nation. The success of the relationship is partly a result of the time and effort that the company
and the First Nation have taken to learn about each other prior to signing a business agreement.

Chief Percy Starr, Band Manager and Chief
Councilor of the Kitasoo/Xai xais Nation.

Marine Harvest Canada is a leader in CSR among aquaculture companies in BC and is committed
to exploring solutions to the challenges facing the sector. All businesses have some impact on
communities and the environment. Marine Harvest Canada works hard at understanding the impacts
they are responsible for and look for ways to mitigate those impacts. The company has developed an
effective partnership with the Kitasoo First Nation that appears to work well for both parties. The
partnership has helped turn around the economy of Klemtu where many other coastal communities
continue to struggle with higher rates of unemployment.

Jim Lornie, Mayor of Campbell River, BC, and a commercial fisherman
66 / 68

On Syncrudes Approach to Aboriginal Relations and Work in the Community

According to Chief Jim Boucher of Fort McKay First Nation, Syncrude made a concerted
effort to ensure that community elders had a say in how the land was reclaimed and in the
species planted. Chief Boucher believes that a major success in terms of developing the
relationship is hard work and dedication on both sides. Its not something that happens
accidentally.

Syncrude is a fine example of a company which truly balances economic, environmental and social
imperatives, resulting in a region which is rich in collaborative stakeholder relationships, strong
economically and monitored environmentally. It is a pleasure to work with Syncrude.

Patricia Pelton, CEO, Northern Lights Regional Health Authority, Fort McMurray

These stakeholder verifications affirm that Syncrude is actively living out its Commitments to a
Way of Life, designed to assist the Aboriginal communities of northeastern Alberta to
maximize participation in the oil sands development.

On CPRs relationship with Federation of Canadian Municipalities

Someone close to the issues at the Canadian Federation of Municipalities was contacted. He
commended CPR for taking a lead in an area that was not popular among its industry peers--
i.e., to approach the Federation of Canadian Municipalities to work on proximity issues and
dispute resolution mechanisms. He noted that the company had brought the issue now to
the industry level in the form of an MOU with the Railway Association of Canada.

VanCity Credit Union

A member of VanCity Credit Union was contacted. She said she was happy with the service
that VanCity provides. They are very accessible to other groups. Services are made available
in a number of different languages. At Gay Pride, they (VanCity) advertised with positive
images of gay and lesbian couples. VanCity is good at extending lines of credit to people in
need.

A user of VanCitys business service was also contacted. She has been a member of VanCity
for 10 years, is the manager of a restaurant that is also a caterer and meal provider in the
downtown eastside of Vancouver and which serves that community and employs members
of the community. She indicated that VanCity helped her set up a project to provide meals
to the "subsidized market". They helped her with set-up, marketing, etc. She had very
positive things to say about her experience with VanCity. They (VanCity) are very
community focused.
67 / 68

Teck Cominco

Teck-Cominco has been instrumental in the community's mitigation of the
anticipated "boom-bust" cycle that is associated with the opening and closing of the
Pend Oreille Mine. This planning process, along with Teck-Cominco's open
communication with the community, is actually benefiting us in ways beyond our
initial goals. The positive impacts of the Selkirk Community Teck-Cominco Planners
will continue for many years, and hopefully serve as a model for others in a similar
circumstance.

Jane Reed, Mayor, Metaline Falls, Washington
68 / 68

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