Lagging behind the world
Not enough of Canada’s business leaders are contributing to the global debate over ethics and best practices
(as appeared in the Ottawa Citizen, December 5th, 2003)
A country’s reputation is a collage of images. The number of soldiers we deploy (or not) to strife-torn areas is one such reflection. The decisions and conduct of our political leaders on the international stage is another. Or the international prizes and awards garnered by Canadian academics and entertainers. But where are our business leaders on the world stage? How often are they factored into our global reputation? Probably not enough.
Just as Canadians constantly assess our country’s political role internationally, we must also be mindful of our corporate image. Our brands and companies carry our pride and our flag as well as any Olympic athlete. Yet a single corporate scandal, such as the controversial role of Canada’s Talisman Energy in the Sudan, can negatively impact our national business reputation.
In a world increasingly dominated by concerns about business scandals, is corporate Canada contributing forcefully to the global debate over ethics and “best practices’’? We would naturally like to think so, but there is some justification for concern. Several weeks ago, the Canadian Business for Social Responsibility stated that while companies such as Alcan, Bell Canada, DuPont, Shell Canada, Scotiabank and Suncor were demonstrating leadership, “the list of Canadian companies pursuing corporate social responsibility (CSR) is short.”
Secondly, an e-mail from John Ruggie, recently appointed as United Nations Secretary General Kofi Annan’s Special Adviser to the UN’s Global Compact, was worrisome. “Canadian companies are serious laggards; lower per-capita membership (in the UN’s Global Compact) than any other industrialized country except the U.S. What gives?”
What gives, indeed?
Launched by Kofi Annan in 2000, the Global Compact represents corporate citizenship in the world economy. The original 50 companies in 14 different countries agreed to support nine universally recognized principles in the fields of human rights, labour standards and environmental practices.
In only three years, the number of GC participants has risen to 1,200 and the number of countries has expanded to 53, clearly defying those who would argue that CSR is a “misguided virtue.” Even cities are signing up, with Melbourne the first. The GC has already held “Policy Dialogues” on HIV/AIDS; Supply Chain Management, Partnerships, and Business and Sustainable Development. Furthermore, a two-day Global Compact Leaders Summit is scheduled for next June. Clearly, this UN-backed initiative is a “work in fast progress.”
But where are the Canadians? Only seven participating Canadian companies are registered on the website. By comparison (while keeping in mind the size of different markets), France lists 172 companies, including Air France, Carrefour, Galeries Lafayette, Pernod Ricard and PSA Peugeot Citroen; Germany lists DaimlerChrysler, Volkswagen AG and the Deutsche Bank, along with 16 others; India lists 87, Poland 176 and Spain 124. Although Great Britain lists only 22 comapnies, major ones such as British Telecommunications, Pearson and Unilever are included.
If such well-established brands and companies in other parts of the world see value in collective action through the Compact, why is Canada’s private sector so apparently disconnected, especially given our traditional support of UN-inspired visions?
Lack of government support may be one reason. Although the Compact is a voluntary corporate initiative and is not in any way meant to foster an international regulatory framework, the backing and communication of the project to a country’s corporate sector would signal that corporate citizenship was taken seriously. Identifying a department or minister who has this responsibility—the Labour government in Britain has a Minister of Corporate Social Responsibility—would be an even stronger statement.
In spite of weak activity from the government, some companies seem to have found their way to the international roundtable.
Significantly, Canada’s “founding company,” the Hudson’s Bay Company, led by its energetic president and CEO, George Heller, has championed the promotion of fair labour practices and standards. The Bay sources products from approximately 1,000 vendors representing 3,000 to 5,000 factories in 16 countries and for a decade has monitored vendors through third-party auditing as well as onsite visits.
While the Bay is doing its best, Heller correctly sees that the scale of corporate global governance challenges goes well beyond one company and instead envisions powerful sectoral leadership. Working within the Compact as well as with three other international retail organizations, Heller will host a conference of international retailers in Toronto next spring, in the hopes of “moving the dial” toward better corporate citizenship practices within the retail sector.
Our natural resources industry has also stepped up to the plate. Both Placer Dome and Nexen, Inc. are leading by example, improving responsible business practices by posting case studies on the Global Compact’s website.
Vancouver’s Placer Dome, the world’s fifth-largest gold mining company, describes its project in Papua New Guinea. The company has designed a sustainable health- delivery system to eliminate lymphatic filariasis, a public-health hazard. Eventually, it is hoped that the system will expand to address other issues, such as pneumonia, malaria and HIV/AIDS.
Calgary’s Nexen, Inc., an oil, gas and chemicals company, reviews risk management in zones of conflict. John McWilliams, senior vice-president at Nexen, describes the commitment to the Compact’s principles as “part and parcel” of his company’s culture. Nexen also appears on the Dow Jones Sustainability Indexes, the first global indexes tracking the financial performance of the leading sustainability driven companies worldwide. (In addition, 15 other Canadian companies are included on that index, including the Royal Bank of Canada and CIBC, Cognos Inc. and Telus.)
Petro-Canada is not only a participant of the Compact, but also an active member of the World Business Council for Sustainable Development, an organization chosen by the Compact to develop a resource guide which will help companies improve performance with regard to Compact principles. A catalogue of case studies from Canadian companies such as BC Hydro, CH2M HILL Canada, Power Generation and Suncor Energy Inc. form part of the Business Council’s website.
Clearly, several Canadian companies are contributing, in typical Canadian fashion—without fanfare—to good global governance. However, the list is too short and the message too quiet. We needn’t be “corporate braggarts,” but neither can we be “laggards.”
On the eve of political change, Canada is poised to rebrand itself. While we take great pride in our identity as a peaceful, compassionate society, we must expand that reputation. We must prove that we can simultaneously maintain our inherent values while fearlessly competing against the world’s best—in whatever sector we choose. Yet in an increasingly interconnected global world of partnerships and collaborative governance, our identity must be bold and defined by all sectors. Our business leaders need to be out there with our politicians, educators and artists, staking out turf, trumpeting our nation and talking about much more than the traditional bottom line.
The Global Compact would be an excellent starting point.
Portrait of a capital
Water troubles everywhere
The New CSR: Smart, Savvy and Sophisticated
Protecting those who speak out: Canada lags in protecting whistleblowers
Corporate Citizenship: What’s a CEO to do?
You know how to whistle, don’t you?
Lagging behind the world
What the banks must do - Essay
It’s the governance, stupid