I would like to discuss something today that I feel very passionate about – the importance of corporate social responsibility and its contribution to Canadian business success.
I am a firm believer in corporate social responsibility (CSR) and I am also a business leader who understands that
we cannot succeed without delivering solid financial performance. I do believe that CSR can deliver competitiveadvantage, and is a critical and often overlooked contributor in the pursuit of global competitiveness.
As I have learned through both my personal and professional experience, how we do business is as important to our success as what we do. This is certainly is a core tenet at HP. And I believe this concept has never been more important to our collective economic success in Canada. Allow me to explain.
In looking at our country’s rich history, it is clear that Canada has always been recognized as a leader in social responsibility. We have a proud legacy on many fronts: We were one of a handful of countries responsible for the creation of the United Nations and one of the first in the world to adopt a publicly funded healthcare program.
From embracing the international rule of law, to peacekeeping, to diversity in its broadest terms, Canada has led the way – and we continue in our pursuit of common good and fairness. We also have a rich history of innovation. From Banting to Lazaridis, Canadians have brought unique contributions to the global stage.
However, Canada is not immune to the challenges that have plagued other nations. We have had our share of corporate and government scandals that have been both visible and concerning. Still, CSR remains a concept that is openly embraced by a strong majority of Canadians. This puts us in the forefront of countries around the world.
Here in Canada, HP recently commissioned a study on attitudes towards CSR from the research firm GlobeScan. The results show a compelling connection between values and economic success. For example, last year alone 40 percent of Canadians surveyed reported punishing corporations by not purchasing their products or speaking critically about them because they felt those companies were not acting in a socially responsible manner. Furthermore, a vast majority of Canadians – 93 per cent of those surveyed – feel that corporate social responsibility should be as important to companies as profit and shareholder value.
So why is Canada ahead in this regard? I believe the foundations of our society reflect the personal values of our citizens, who continue to drive an agenda that embraces CSR. I can tell you as a first-generation Canadian that those values certainly taught me about the power of family, community, integrity, and the necessity of a hard day’s work. As it turns out, those values were closely alignedwith the values of HP and served as an excellent foundation for my current leadership role.
My grandfather immigrated to Canada just before the depression. Although I will give him high marks for his choice of country, I must say his timing was anything but impeccable. He left his wife and four boys back home,while he struggled to build a better life for his family. Twenty years after arriving, he was finally able to bring his family to Canada. My father and mother ran a small restaurant for over 25 years, six days a week, 15 hours aday. Both generations provided me the values I hold today: the power of family, community, integrity and hard work.
I am proud of the fact that Canada continues to embrace over 200,000 new immigrants a year, who are drawn by the economic opportunity, quality of life and humanitarian values that differentiate our nation. Our legacy oftolerance and strong social values means that in Canada today, we are generating even higher expectations of the role of business and government in creating a sustainable and socially responsible society.
Let me directly tie this again to economic viability. More than 92 per cent of Canadians surveyed said that the more socially and environmentally responsible a company is, the more likely they are to purchase its productsor services. Additionally, 91 per cent of Canadians surveyed prefer to work for a company that is socially and environmentally responsible. In fact, the more socially and environmentally responsible a company is, the more attractive it becomes as an employer.
I believe the companies and countries that attract the best talent, win in the global market. And I can tell you that this has held true in my own experience. After university, as part of campus recruitment, I had the opportunity to join two different companies. A friend of mine asked me if I thought of joining HP. I had not. So she suggested that I talk to her boyfriend, an employee of HP. The values, the passion and the uniqueness of HP that he communicated that day were the single biggest reason why I joined. What he shared that day was not just about cash or stock options, although those were certainly relevant. He talked about citizenship, values and contribution. I left that day thinking I had to go work for a company that at its core, embraced values so important to me.
This convergence of business values and the strong social values that Canada is known for means that not only must we embrace CSR to succeed, but that we can turn our industry-leading attitudes and approaches into a globalcompetitive advantage.
When we talk about competitiveness, we must first understand it in the context of today’s market expectations. We are talking about more than just the bottom line here. My colleagues at the Canadian Council of Chief Executives understand that building a stronger Canada economically and socially is our national mandate. Council CEOs across this country agree that good governance has a real impact on competitiveness in the public and private sectors alike. As consumers become increasingly more sophisticated in their knowledge and expectations of corporate performance, our definition of it has evolved.
In Harvard Professor Lynn Sharp Paine’s book called “Value Shift”, she maintains that superior performance consists of excellence along both moral and financial dimensions, not just financial performance alone. She asserts that by definition, a company cannot be an outstanding performer it if fails to conform its activities to generally accepted ethical principals, even if its financial performance is outstanding when viewed in isolation.
I could not agree more. More importantly, shareholders also agree. The GlobeScan research I mentioned previously also found that more than a third of Canadian shareholders surveyed have bought or sold shares because of a company’s CSR performance, and half actually view socially responsible companies as more profitable than irresponsible ones.
CEOs share these sentiments -79 per cent of global chief executives agree that social responsibility is vital to the profitability of any company. In fact, good will is believed to account for 71 per cent of total market capital, driving the move towards socially responsible investment and the establishment of ethical indices such as the Dow Jones Sustainability Group Index.
Next week Paul Tsaparis continues his argument that corporate social responsibility can to be tied to better financial performance and competitiveness