Doing the Right Thing

CDR'98 Examines Canadian Corporations and Social Responsibility

Corporate social and environmental responsibility is becoming the business issue of the 21st century. During the past few years, corporate leaders have spoken publicly about the need to make social and environmental concerns a part of everyday business. Meanwhile, corporations of all kinds, on all continents, are commissioning independent "social audits" to monitor and verify their social and environmental performance. For a growing number of Canadian and international firms, social accountability is part of their mission statements and corporate culture.
Focusing on the activities of Canadian business in the developing world, the Canadian Development Report 1998: Canadian Corporations and Social Responsibility (CDR 1998) considers the question of corporate responsibility in the global marketplace and provides a compact survey of Canadian activity across the financial, mining, and manufacturing sectors, as well as in engineering and management consulting services. CDR 1998 also explores the benefits and costs of Team Canada missions and measures their political impact beyond the business arena.

Corporate giants
The report says globalization has turned the spotlight on corporate responsibility. The dramatic increase in North-South commerce has generated both widespread benefits and questions about the socioeconomic role of corporations in developing countries.
Many of today's corporate giants are larger than most sovereign states. For example, the 1995 sales of the world's "Big Five" exceeded the gross national product (GNP) of China. Canadian corporations, while not ranking among the world's largest, are formidable entities in their own sectors and in comparison with mid-sized developing countries, says CDR 1998. For example, the 1996 gross revenue of BCE Inc., Canada's largest corporation, exceeded the 1995 gross domestic product (GDP) of Côte d'Ivoire, Sri Lanka, Guatemala, Ecuador, Uruguay, and Vietnam.
As a result, private investment flows are outpacing official funding flows--that is, aid and bilateral or multilateral loans from government agencies, says the report. Private investment has supplanted aid as the main channel of relationship between Canada and the countries of the South.

A shared responsibility
The report finds that social responsibility is an integral part of doing business for many Canadian corporations, and is critical to performance and success. Other firms, however, continue to view social responsibility as "a discretionary activity." In the introductory chapter, Institute authors Roy Culpeper and Gail Whiteman urge companies to incorporate social and environmental responsibility into daily operations and international management practices by reintegrating ethics into business culture; adopting a systems-centred approach to stakeholder management; and adopting an international code of conduct that addresses social and environmental concerns.

	In addition to their shareholders, corporations' stakeholders encompass their employees, customers, the communities, and the natural environment in which they operate.

The Canadian Development Report 1998 also proposes that engaging in ethical behaviour is not only an issue for the private sector. Governments and individuals also have a role in shaping how firms conduct business, whether through legislation, codes of conduct, selective shopping, or investment screening.

Return to: Vol.2, No.2 1998 Contents or Review Home Page