Page 33 – Sustainability Academy

by Michael Hines

Minimizing a company’s impact to society has long been considered to be at odds with maximizing stakeholder returns. Better informed customers, as well as liability averse investors are now requiring companies to do better. Companies are responding, and a bottom line benefit is emerging.

In the last 50 years sustainability has primarily been seen in Socially Responsible Investing (SRI), which avoids investment in companies with unethical or risky practices. While a positive development for society, this exclusionary practice has generally been associated with at best average investor returns.

Today corporate sustainability has evolved to where it is possible, even advantageous, to operate in a manner that is a win win for an organization, its partners and society. There is strong evidence that companies with their “Triple Bottom Line” – Environmental, Social and Governance (ESG) – ducks in a row are rewarded with a lower cost of capital and frequently outperform. These “best in class” companies are not only reducing their impact on others, but cutting waste and mitigating liabilities in their operations.

While a new concept for many, ESG is coming on strong. After nearly zero a decade ago, ESG related assets under management at the end of 2015 were over $21 trillion. Morningstar now has ESG sustainability ratings for funds. It’s both carrot and stick – recent financial crises have convinced regulators and investors that more information is needed from companies. And companies have recognized that being a good citizen is a point of positive product differentiation.

Much of the impact of ESG falls on the CFO’s desk. For the Social component – the S in ESG, companies that treat employees and suppliers fairly reap rewards of increased productivity plus less turnover and litigation.

Recent data breaches at companies like Target and Home Depot have shown that companies need to manage supply chain vulnerabilities that can threaten their sustainability. Companies like ThirdPartyTrust have emerged to address the issue as companies scramble to identify and manage this risk. For suppliers, demonstrating data security has become a necessary requirement to win contracts as well as a potential competitive advantage.

Strong corporate governance (the G in ESG) creates transparency and stability, encouraging investment.

Most early adopters are large multinationals, particular those in Europe with regulatory requirements from public exchanges. Companies such as Mitsubishi, Apple, and Cummins are providing ESG disclosure in an annual report like format. Goldman Sachs is a solid example of ESG reporting.

Standards for ESG measurement and reporting are evolving. Unlike standard GAAP financial principles with a well defined one way dissemination of information, ESG measurement is still both an art and a science. Communicating this sometimes hard to measure information is ideally a two way conversation with stakeholders. Just as GAAP represents a standardization of best practices over time, initiatives such as GRI and SASB aim for the same consistency and eventual auditability.

Driving change at an organization begins with measurement and communication of the relevant drivers. Sustainability Academy’s Certificate in ESG Performance for Investors and Sustainability Professionals provides useful knowledge about ESG reporting and the opportunities and challenges of this changing field.

What gets measured, gets managed. Markets and companies becoming more transparent will benefit both the environment and the economy.

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Michael Hines is an executive, consultant and entrepreneur. He is experienced in financial management, operational improvement, sustainability, and strategy. His work includes large and small companies, restructurings, startups and acquisitions.

EU Objectives for 2030

Brexit has made many headlines, both before and after the outcome of the referendum on 23 June 2016. Although there is still a lot of uncertainty with regard to the consequences and exit arrangements, we can already look at the potential impact of environmental, social and governance commitments made by the UK.

In addition to the 2020 objective, the EU has defined its objective for 2030. It boils down to a 40% reduction of greenhouse gasses, a 27% improvement in energy efficiency and a 27% share of renewable energy in the primary energy supply. This objective has been defined including the United Kingdom and revolves around two main axes: the reduction of greenhouse gasses and the share of renewable energy in the energy supply. Indisputably, the United Kingdom’s exit from the EU impacts the commitment made for 2030.

..What about the EU then?

Since the UK is no longer part of the aggregated EU statistics, the EU will be obliged either to lower its commitment or to ask the remaining members to put in more efforts by means of compensation. More specifically, according to HSBC calculations, in order to obtain a 40% reduction of greenhouse gasses, Member States should contribute an additional 7.6% reduction. It may seem relatively easy since it will be divided among 27 states. However, as some large emitters are resisting, it is no easy task.

One other important element to consider is that the UK exit would lead to a redistribution of the voting rights in the European Parliament. Therefore, the climate-skeptic countries would rise. This compromises the commitment to work harder and make more investments in renewable energy.

The UK Environmental Commitments

As far as the UK is concerned, it is quite possible that, even without the EU, the United Kingdom may show a strong commitment to climate change. We should indeed stress that in 2008 the country adopted the Climate Change Act, which remains valid up to now and aims to reduce greenhouse gas emissions by 80% by 2050. Moreover, the UK has achieved impressive results when it comes to the reduction of greenhouse gas emissions and improving energy efficiency. Particularly, between 1990 and 2014, the country’s energy consumption fell by 10% while its GDP increased by 65%.

All in all, despite the fact that the climate is not a priority in the discussions about the exit arrangements, climate change remains a challenge today and requires a global, ambitious and swift response.

The biggest cosmetics brand in the world is on a mission to prove that all businesses can become sustainable without compromising their profitability.

The L’Oréal Group is the largest and most profitable company in the cosmetics industry, currently valued at $13.69 billion. Nonetheless, between 2005 and 2016 the company was able to reduce its greenhouse gas emissions by an impressive 67% while at the same time it managed to increase its entire production by 29%. This is an amazing accomplishment that demonstrates a true devotion to sustainability. As Alexandra Palt, L’Oréal’s chief sustainability officer recently mentioned to FastCompany magazine “We are really serious about sustainability across all of our products and services”.

Sustainability Can Go Hand-In-Hand With Economic Success

Achieving sustainability in the cosmetics industry is nowhere near as simple as swapping out petroleum-based products for plant-derived alternatives, since the entire industry supply chain from the sourcing of material to the packaging of products can leave a huge environmental footprint. However, L’Oreal’s CSO was able to focus on each stage of product development and achieve an effective sustainability overhaul. Mrs Palt was able to do that through the following steps: Sourcing from renewable raw materials like plants; tightening transit routes and switching to electric vehicles to reduce transport-related emissions; converting manufacturing facilities to run on renewable energy; reducing the amount of water wasted in the production process by installing on-site treatment mechanisms; re-engineering packaging to use less plastic, or biodegradable materials when possible.

The Importance Of Employee Training Programs

Under the leadership of the L’Oreal CSO, the company was able to tackle this daunting task mainly through comprehensive employee training programs (like the sustainability training programs offered by CSE) on various areas of sustainability (CSR). This is extremely important in order to create a strong sustainability department that can guarantee positive results. When the CEO has such a strong vision for how a company can transform, you have to have a way to transform that strategy into action,” Palt says. So, the CSO’s department has been able to accelerate its plans to increase sustainability by linking all L’Oréal brand and country managers’ bonuses to outcomes on environmental targets.

As the largest cosmetics company in the world, L’Oréal is an obvious benchmark in the industry. However, Palt doesn’t want the company’s sustainability efforts to be seen as attempts to teach other businesses a lesson. Instead, these efforts are driven by a sincere desire to effect real change and ensure that future generations will be able to enjoy the same benefits as we do.

Recently we celebrated International Women’s Day, a global celebration which aims to inspire women in countries across the world. The tradition began with the first National Women’s Day, on the 8^th of March in 1909 and its roots are in campaigning for better pay and voting rights.

Nonetheless, reports show that while more and more companies file CSR reports every year, the lack of transparency into workplace gender equality still remains troubling. Nowdays, women outperform men academically and increasingly enter the workforce, but they still do not reach leadership , even though they are qualified to do so. Many governments have stepped in to regulate the matter. For example Norway requires 40% of directors be female while in the U.S., public companies must disclose whether and how their nomination committees considers diversity in selecting directors.

Gender Equality Leads to More Productivity

Closing the gender gap in management and governance positions actually correlates to stronger productivity on both corporate and national levels. However, despite the mounting data proving the benefits of ”a woman’s touch” in corporate governance, almost 85% of Fortune 500 company board positions still belong to men.

Gender Equality in CSR Reporting

CSR reporting recognizes companies with initiatives and efforts that go beyond legal requirements. Including gender in CSR reports allows tracking of gender equality progress by company, industry and nation. The Global Reporting Institute provides guidelines for companies to start tracking and reporting their gender-related initiatives.

The time has come to go further than merely recognizing the value women provide in corporate governance. It is time to take down the glass ceiling, close the gender gap and realize the benefits of gender equality to the private and public sectors.

According to World Health Organization, more than 150 world leaders gathered at United Nations Headquarters in New York to adopt an ambitious new sustainable development agenda at a 3-day summit that commenced Friday 25 September. Agreed by the 193 Member States of the UN, the new agenda “Transforming Our World: 2030 Agenda for Sustainable Development”, consists of a Declaration, 17 Sustainable Development Goals and 169 targets.

Sustainable Development Goals (SDGs)

The Sustainable Development Goals (SDGs) were adopted with a view to end poverty, protect the planet, and ensure prosperity for all. They follow on from the Millennium Development Goals, and articulate an agenda for the next 15 years (to 2030) which requires input from all sectors of society across the globe, including corporate actors who are key in the achievement of the targets.

As mentioned in The Guardian, some companies have already begun integrating the SDGs into their business model – and using them to find ways to expand their offerings. Pearson’s efforts with Syrian refugee children, for example, directly link the SDGs to the publisher’s research and development program. In addition to fulfilling SDG 4, which exhorts companies to ensure “inclusive and quality education for all”, Pearson’s efforts also link to SDG 16, which calls for the promotion of peace, justice and strong institutions.

Kerry Adler, CEO of SkyPower Global, suggests another way that the SDGs could be integrated into a company’s business model. SkyPower previously committed to build one gigawatt of solar electricity in Kenya over the next four years. As part of the SDGs, it committed to double that. The company is also getting involved in Kenya’s infrastructure development. As part of its SDG commitment, it agreed to donate 3,600 solar powered LED streetlights for a 3,000km highway that the Kenyan government is planning.

Other companies are doing SDG work in areas that are less directly related to their core business. For example, Tammy Medard, CEO of ANZ Bank (Lao) has decided to focus on SDG 5: gender equality. At the UN event, she pledged that, by 2017, 40% of her bank’s vendor panel will be women-run businesses.

Research by KPMG forecasts that 41% of businesses will embed SDGs into strategy and the way they do business, within five years.

Historically, sustainability practices were not a core component of business strategy. However, increasing customer and societal demands for economic, environmental and social responsibility have brought sustainability issues to the surface. In the present day scenario, an increasing number of organizations identify sustainability as a key differentiator for competitive advantage.

As globalization, shifting demographics and competition for the world’s depleting resources compel transformational change, companies will need enlightened and sustainability-savvy leadership to thrive in this brave new world. HR has a significant role to play to align talent with these emerging realities. In order to succeed in this new global context, current and future leaders will need a host of new skills and competencies — and organizational incentives will need to align with strategic sustainability priorities. HR professionals can influence and enable this strategic shift.

There are many resources to help HR managers become proficient in embedding CSR into the employee lifecycle and experience. If done correctly, HR can support an organization to become future-fit, helping to embed social and environmental factors into:

corporate purpose, vision, mission, values and strategy

employee code of conduct
workforce planning and recruitment
orientation, training and competency development
compensation and performance management
change management and corporate culture
employee involvement and engagement
employee communications
celebrating success

HR managers will also need to play a lead role advising on sustainable pay metrics and bonus-able goals. Organizations have a long way to go getting the right incentives in place. While many companies include social and environmental factors in executive compensation plans, most are compliance-focused and backwards looking and few have actual targets.

A value-added HR professional will support the organization to anticipate and manage these profound labor market and societal shifts to foster business and social success. HR managers must find ways to bring CSR and sustainability into scope when sourcing and optimizing talent. This helps achieve organizational outcomes to realize CSR’s power as a top driver of employee engagement and retention.

By Rosalinda Sanquiche

How long can we make this list?

Improve efficiencies
Increase productivity
Build public appeal
Increase shareholder value
Aid in employee recruitment
Increase employee satisfaction and retention
Promote team building
Improve quality of work
Innovate
Lower business risk
Save labor
Save money
Increase competitive edge
Save time and cost on supervision
Create a marketing advantage
Give back to the community

Want to take a huge step toward sustainability? Improve your workforce? Strengthen a community? Ensure sustainable profits?

Sustainability training such as the foundation course offered by the Sustainability Academy offers these benefits and more. Training is of special interest to professionals who want to improve their skills and update their knowledge in Corporate Social Responsibility with practical information on the business case for sustainability; the importance of stakeholder engagement; the use of standards and guidelines to design and

implement successful sustainability strategies organization-wide. Without training, sustainability is more a vision than a goal. Sustainability is not a vague term – it is a tangible process which can be taught and implemented to improve corporations and communities.

The ROI on training is indisputable:

Increased public appeal helps increase market share. A Nielsen survey in 2015 found that 72% of Millennials “are willing to pay more for products and services that come from companies who are committed to positive social and environmental impact.”

More customers lead to greater shareholder value. The American Society for Training and Development found that an increase of $680 in a company’s training expenditures per employee generates nearly a 6 percent improvement in shareholder return. Researchers found that firms investing the most in training and development yielded a return 45 percent higher than the market average when compared to the S&P 500 for the same period, along with higher profit margins and higher income per employee.

Increasing efficiencies is a profitable and “low-hanging” fruit. After training, an HSBC “Climate Champion” noticed that computers left on overnight were a huge energy drain. The company implemented software to automatically shut down computers along with an awareness program which together saved 4 million kilowatts per year of electricity and about 900 metric tons of carbon dioxide, which shaved $332,000 on energy bills.

Increasing productivity through better morale, professional development and team building makes for more satisfied employees. Research has found that a 2-percent increase in productivity can net a 100 percent return on investment in training (CompTIA and Prometric). For every dollar spent on training, Motorola found nearly a 30 percent gain in productivity over three years. Motorola training also reduced costs by over $3 billion and increased profits by 47 percent.

Training also leads to better retention as Louis Harris and Associates found, showing that 41% of employees without training opportunities plan to leave in one year versus only 12% of those who felt they had excellent training opportunities. An AON survey found that employees rank “opportunities for personal growth” ahead of salary!

According to Krista Badiane at the National Environmental Education Foundation, a program of the EPA, “There seems to be a huge growth of interest among companies to not just keep the environmental initiatives within a subset of employees, but to make it a pervasive part of the corporate culture.” Companies are looking for ways to bring this training in-house to their employees and out into the community as part of their social commitment and philanthropy.

The Sustainability Academy offers an online option that is affordable and efficient. Many companies want to educate local communities beyond their staff. With the Sustainability Academy, companies can co-brand the trainings to meet organizational needs, increasing public appeal and improving lives for the long-term. They can tailor the offering specific to their needs, for example, providing education on sustainability in Supply Chains to key suppliers. The ROI from sustainability education provided by the Sustainability Academy is tangible. After the certified foundation course, participants receive a diploma as a sustainability practitioner which enhances their professional development.

Whether as a philanthropic effort or company enhancement, there needs to be a critical mass of those who understand sustainability and all its components. Only then can we all benefit from increased productivity, increased morale and improving our carbon footprint. The Sustainability Academy has set the ambitious goal of generating this critical mass by training 100,000 sustainability practitioners by 2020!

Sponsor a Sustainability Academy cohort and let’s join forces for our common good!!

Contact:

Sustainability Academy

www.sustainability-academy.org

[email protected]

Assessing the environmental impact on mining companies in Canada

Mining impacts the environment in unnatural ways, which not only disrupts its natural decaying process, but also does more damage long-term than natural erosion processes.

Since 1990, mining companies had to comply with increasingly stringent domestic regulations and may adopt voluntary practices that exceed regulations. In the past two decades developing countries have become more aware of environmental issues, and have taken steps to regulate and to protect their environment. Many voluntary measures have also been implemented by mining companies to achieve and maintain their social license to operate.

For instance, Canadian mining companies in the Mining Association of Canada are required to participate in the Towards Sustainable Mining (TSM). Towards Sustainable Mining (TSM) is an initiative that helps mining companies evaluate and manage their environmental and social responsibilities. It is a set of tools and indicators to drive performance and ensure that key mining risks are managed responsibly at participating mining and metallurgical facilities.

Established in 2004 by the Mining Association of Canada (MAC), TSM’s main objective is to enable mining companies to meet society’s needs for minerals, metals and energy products in the most socially, economically and environmentally responsible way.

At its core, TSM is:

Accountability: Participation in TSM is mandatory for all MAC members, and the Mining Association of British Columbia and the Québec Mining Association are currently implementing TSM for their members.

Transparency: Mining companies publicly report their facilities’ performance against 23 indicators in the annual TSM Progress Report. Results are externally verified every three years.

Credibility: TSM is overseen by an independent Community of Interest (COI) Advisory Panel. This multi-stakeholder group helps mining companies and communities of interest foster dialogue, improve the industry’s performance and shape the TSM initiative for continual advancement.

The TSM includes guiding principles and standards for tailings management, greenhouse gas and energy management, aboriginal and community outreach, crisis management, water and mining, biodiversity conservation, and mine closure.

Companies must report on TSM progress each year and these reports are subject to external verification. Canadian mining companies are also involved in environmental initiatives such as the Mine Environment Neutral Drain (MEND) program and the National Orphaned and Abandoned Mines Initiative (NOAMI).

Furthermore, mining companies are also being asked to demonstrate to their stakeholders and financial institutions that they are managing environmental risks. Investors recognize that managing environmental risk is necessary for maintaining long-term market value, and frameworks such as TSM can help companies to identify and manage these risks.

While mining has historically affected its surrounding environment, advances in technology and changes in management techniques mean that many negative impacts are now avoidable. Increasingly, mining companies are making efforts to reduce the environmental impact of mining and minimize the footprint of their activities throughout the mining cycle. By systematically examining environmental impacts and adopting measures to mitigate these impacts, it is possible to make mining less destructive for the environment.

By Rosalinda Sanquiche

While much has been made about whether Silicon Valley corporations, start-ups and tech giants are or are not models of sustainability, CSE provides the first systemic research on Silicon Valley companies’ sustainability efforts by analyzing their current state of sustainability and corporate social responsibility (CSR) reporting. During a webinar featuring research from CSE on sustainability practices in Silicon Valley, attendees indicated a widespread perception that Silicon Valley is strongly in tune with sustainability practices. The ground breaking report Sustainability Trends in Silicon Valley from the Centre for Sustainability and Excellence (CSE) addresses this perception.

ET Index Research is a mission-driven organization dedicated to helping investors and corporations identify, understand and manage climate and carbon-related risks. They help investors to reduce exposure to carbon risk without sacrificing performance. Their methodology guides investments to shift towards carbon-efficient companies across the economy, including companies from Silicon Valley. The Engaged Tracking (ET) system incentivizes the world’s largest companies to lower greenhouse gas emissions and to improve transparency in carbon and climate risk reporting.

As CSE has found, reporting is key! By comparing findings, a better picture emerges of sustainability in Silicon Valley. CSE’s research examines whether Silicon Valley companies follow sustainability best practices and whether or not they are sustainability role models to other sectors. Over 78% of the Global Fortune 500 produce a sustainability report (many receiving training from CSE); 61% when looking only at the Fortune 100. So, Silicon Valley companies should be in that 60-80% range.

ET Index Research looks at sustainability by producing the most comprehensive public ranking of the world’s largest listed companies according to the carbon intensity of their activities. The company analyzes carbon risk in investor portfolios and produces low-carbon and fossil-free indexes that can be used by investors as benchmarks and to create customized low-carbon investment strategies.

According to CSE’s research, only 29% of Silicon Valley companies have sustainability reporting, though the research found that 61% have a sustainability professional, weighted in favor of large companies over SMEs. Some of the 100 companies examined are global leaders such as Adobe, AMD, Apple, Cisco, Dolby, eBay, Facebook, FICO, Google, Intel, Intuit, PayPal, Oracle, SunPower, Tesla, Twitter and Zynga. Industries covered include automotive, computer and internet, entertainment, financial services, medical, renewables and telecommunications. The research breaks down sustainability practices into five categories: community, environment, employee, ethics, supply chain and philanthropy. Only 21% of the companies studied address all six practices, each showing greater or lesser emphasis on particular categories. Finding Google on the list is no surprise, while Apple is notably absent.

Even looking at just one component, supply chain, comparing CSE research to ET Index Research confirms Silicon Valley’s lower than expected attention to sustainability. The ET Carbon Rankings are the only publicly available rankings to assess both the carbon efficiency of companies’ direct operations (Scope 1 and 2 emissions) and of their full value chain (Scope 3), from transportation of raw materials to the use of the products they sell. Scope 3 emissions are of critical importance because they typically make up 75% of companies’ carbon footprints and therefore reveal their exposure to increased costs across their value chain. The rankings list the carbon efficiency of the world’s largest 2,000 listed companies, which account for approximately $45 trillion in market capitalization and approximately 9.5 billion tonnes of CO2 in direct emissions.

The combined research finds that many Silicon Valley companies are leaders in their field, but they are not necessarily the leaders in Sustainability that many people expect!

Comparing Silicon Valley’s top companies reporting on sustainability to the top 800 on the ET Carbon Rankings, leads to startling results. The best companies based on both lists are Adobe (ranked #3 by ET Index Research and #1 by CSE) and Oracle (ranked #1 by ET Index Research and # 13 by CSE). Rankings are dramatically lower from there.

Company	CSE Rank	ET Index Research Rank
Adobe	1	3
Applied Materials	2	457
Cisco	3	454
Ebay	4	552
Google (Alphabet)	5	474
Hewlett Packard	6	243
Intel	7	489
Intel Security	8	No ranking
Intuit	9	299
Juniper Networks	10	No ranking
Lam Research	11	No ranking
NVIDIA	12	493
Oracle	13	1

Of the top Silicon Valley companies on CSE’s list, only nine appear on the ET Index Research list. While Adobe and Oracle are towards or at the top of one or the either list, most of the companies on CSE’s list fall well down the rankings on the ET Index Research list, with the next highest listing at 243 from Hewlett Packard. None of the others even make it into the top half of the Carbon Rankings.

CSE’s findings are that, overall, Silicon Valley companies to do not appear to have a clear strategy to address stakeholder concerns or expectations. With the exception of those strongest companies such as Adobe, Applied Materials and Cisco, corporate strategy seems to be focused on one or two elements of sustainability, rather than a systems approach. Of the companies at the top of the CSE list addressing all the key factors of sustainability, only Oracle appears at the top of limiting carbon emissions, integral to managing supply chain.

Low emphasis on reporting could be due to a lack of resources – time, budget, mandate. Perhaps Silicon Valley culture is still short-sighted. Who worries about carbon emissions when quarterly returns are due and an exit strategy is in place?

On reason given for lax reporting is that the companies lack the know-how. Of the companies studied, 95% claim to focus highly on ethics, 63% on environment, 51% on community and employees. Yet, when it comes to reporting accomplishments, companies need to do more than post a few feel-good bullets on their websites.

For example, to get a full picture of carbon risk, companies need to go beyond direct emissions from a company’s own activities (Scope 1 and 2) and understand indirect emissions from the activities in its value chain (Scope 3), from production of the raw materials it uses to the use of the goods it sells. Scope 3 emissions are typically the largest source of emissions within a company’s total footprint, and a major source of its carbon and climate-related risk. Companies which do not measure, track and/or actively work to reduce Scope 3 emissions are not only failing their supply chain, but also the environment which 63% in the CSE study claim to have strong records.

ET Index Research was established specifically to address the systemic nature of carbon risk. The ET Carbon Rankings and the corresponding ET Low Carbon Index Series are designed to reduce individual investor exposure to carbon risk by shifting capital away from high-carbon companies in all sectors. They reduce aggregate exposure to carbon and climate risk by clearly signaling to the largest listed companies and their supply chains that they must decarbonize in order to move up the rankings. A greater weighting in the Index means companies receive a larger share of invested capital. This mechanism offers investors a systematic and cost-effective approach to helping the world avoid the worst effects of climate change.

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How can companies show positive efforts toward sustainability rather than falling short with external monitoring such as the ET Index Research rankings? There is a process to good internal assessment and subsequent CSR reporting – accepted practices, ever changing guidelines and regulations. Without a well-trained and dedicated staff, companies need to reach out to established organizations well-versed in assessment and reporting. CSE’s research furthers its commitment to high caliber training in sustainability for corporate executives and sustainability managers worldwide. Assessment, disclosure and recognition are critical for building positive stakeholder relations, whether customers, investors or the global community.

ET Index Research www.etindex.com

Email: [email protected]

Address: Level39, One Canada Square, Canary Wharf, London, E14 5AB

Call: +44 (0)207 183 3221

CSE Centre for Sustainability and Excellence www.cse-net.org

Email: [email protected]

Trainings: http://www.cse-net.org/article/127/upcoming-trainings

Sustainability Academy: www.sustainability-academy.org

North America: 70 W Madison Str., Suite 1400 Chicago, IL 60602, USA

Call: 312 214 6464

Europe: 23 Zirini Str., Kifissia,14564, Athens, Greece

Call: +30 210 80 85 565

In 2009, the Government of Canada launched its first Corporate Social Responsibility (CSR) Strategy, “Building the Canadian Advantage: Canada’s Corporate Social Responsibility Strategy for the Canadian International Extractive Sector.” It outlined Canada’s commitment to promoting CSR, defined as the voluntary activities undertaken by a company, over and above legal requirements, to operate in an economically, socially and environmentally sustainable manner.

Canada is strengthening its commitment to enhance the ability of Canadian extractive sector companies to integrate CSR into their practices through a renewed Strategy, building on experience gained since 2009. The strategy makes clear the Government’s expectation that Canadian extractive sector companies reflect Canadian values in all their activities abroad. While its primary audience is intended to be Canadian extractive sector companies, the Strategy is also meant to provide a more general audience with an overview of Canada’s approach to promoting and advancing CSR abroad. For Government of Canada representatives, the Strategy provides a framework to guide their efforts to promote CSR policies, tools and guidance.

Experience has shown that, particularly for extractive sector companies operating in challenging environments, those that go above and beyond basic legal requirements to adapt their planning and operations along CSR lines are better positioned to succeed in the long term, and to contribute to a more stable and prosperous environment for all affected parties.

Many Canadian extractive sector companies, particularly those in the mining industry, understand that incorporating CSR practices into their operations contributes to their success. By doing so, companies can manage risks more efficiently and effectively; foster good relations with investment partners, employees, and surrounding communities; increase access to capital; and improve their reputation. Managing social risks, including through conscious efforts to respect human rights, is increasingly important to companies’ success abroad.

The CSR Strategy, however, was criticized by the Opposition Parties as ineffective and “toothless” for its emphasis on voluntary and collaborative initiatives over mandatory mechanisms. After a review of its CSR Strategy, on November 14, 2014, the Federal Government of Canada announced its second and “enhanced” CSR Strategy renamed “Doing Business the Canadian Way: A Strategy to Advance Corporate Social Responsibility in Canada’s Extractive Sector Abroad”.

One of the key changes from the previous CSR Strategy was to introduce consequences to non-compliance with CSR standards and non-participation in dispute resolution processes. In addition, the new CSR Strategy adds to its list of endorsed CSR Guidelines, the United Nations Guiding Principles on Business and Human Rights (UNGP), an international human rights framework that delineates expectations of corporations to address the human rights impacts of their operations internationally; and the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas.

The global presence of Canadian extractive companies represents a potential force for responsible resource development around the world. Many Canadian companies are committed to high ethical, environmental and social standards – indeed, Canadian industry associations and extractive companies have been recognized domestically and internationally for their leadership on these issues.