Without pressure from shareholders and government regulations, most private companies in Canada have placed corporate social responsibility (CSR) low on their business priority list — unlike their public counterparts. About one-half (48 per cent) of private companies don't have a CSR plan in place, according to a PwC report.
One-fifth (21 per cent) of respondents have a CSR plan aligned to business goals and 29 per cent plan to have one in the next three to five years. This is largely because a majority of Canadian private companies view it as a "nice-to-have" rather than a priority (53 per cent), found the survey of 82 private companies.
"Many of these issues that are currently being dealt with on a voluntary basis could very well be regulated in the future," said Mel Wilson, an associate partner in the sustainable solutions group at PwC. "Companies would be wise to start operating as if there were regulations already in place, so they'll be in a better position when those regulations actually come along."
Only 30 per cent of respondents felt CSR can provide a competitive advantage and while a commitment to CSR can help attract top talent, none of the respondents with CSR plans in place were communicating them in recruitment initiatives, said the report Ahead of the Curve: Insights into CSR and sustainability.
"Embedding CSR into a business is a good way to stay ahead of competitors and attract talented recruits, however, many businesses may not fully understand these benefits or know how to start," said Wilson.
To create a socially responsible and sustainable business, Wilson recommended the following:
• Create a longer-term vision: Senior management have to articulate what CSR means to their organization. There has to be a dialogue among management, the board of directors, employees and stakeholders. "What is the organization going to look like in 10 years as opposed to six months from now?" said Wilson.
• Identify what the impacts of your company's operations are on the environment and on people: "Assess those impacts from the standpoint of whether you can improve upon them to be environmentally efficient," he said. "The financial equivalent would be looking at the organization to see if you can be more efficient."
• Measure CSR performance in a quantitative way as much as possible: Eighty per cent of companies with CSR plans in place track their progress, found the survey. "As long as sustainability is viewed as a qualitative, feel-good concept, it allows companies to get away with a lot. They need to move into a set of performance indicators that are of a quantitative nature," said Wilson.
• Communicate performance to key stakeholders: This includes shareholders, customers, employees, potential recruits and the communities where you operate.
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