While international and local NGOs and business initiatives are active in Canada, companies are not yet taking full advantage
While international and local NGOs and business initiatives are active in Canada, companies are not yet taking full advantageA widely accepted truth in corporate responsibility circles is that goals can only be achieved through collaboration with non-governmental organisations and business associations. Yet while one of the best-known environmental NGOs, Greenpeace, was founded in Canada in the early 1970s, and the country has a long history of civic engagement, Canadian companies have been hesitant to engage.
Anti-sweatshop activist group Maquila Solidarity Network’s Lynda Yanz reflects on the decades of corporate engagement she and her labour rights colleagues have been involved in. She says: “With very few exceptions, Canadian companies are reluctant to engage actively in multistakeholder initiatives that involve US and European competitors, NGOs and unions.”
Yanz says they are still too cautious, and not taking leading roles either on their own or collaborating with other companies. Yanz and her peers are focused on manufacturing hubs, but her comments resonate across all sectors. While there are a few encouraging signs of collaboration, the Canadian corporate community is not exactly punching above its weight, socially and environmentally speaking.
Coordinating hub or PR shield?
When Maquila Solidarity Network (MSN) began targeting Canadian companies for labour rights violations in their supply chains, many companies stood behind the Retail Council of Canada, the industry association looking out for their interests, rather than responding individually. The RCC’s response was to form a committee to address the issue, and to publish several press releases with a position.
The cynical onlooker may suggest that this is another example of how industry associations cater to the lowest common denominator rather than raise the bar of corporate responsibility. Yet even bringing companies together to discuss the issues created a new foundation for learning and dialogue.
To its credit, the RCC went on to host a conference for its members in 2006. MSN’s Bob Jeffcott was welcomed to the stage with the head of global merchandising for Wal-Mart. Inviting an activist to present alongside his biggest target, with more than 100 companies in the room, goes beyond the lowest common denominator approach.
And there are other encouraging instances of Canadian industry associations taking a proactive, impact-oriented stance to try to improve their members’ corporate responsibility impacts.
The grocery industry, guided by two national associations – the Canadian Council of Grocery Distributors and the Canadian Federation of Independent Grocers – has conducted an industry-wide carbon-footprinting exercise. The purpose was twofold: set a baseline from which the industry can measure its performance over time, and generate awareness and cohesion among a wide group of players over the need for action on climate change.
While the results of the baseline study conducted in 2008 have not been released, the complexity of the process and the commitment of the industry to collaborate have been impressive.
Gently raising the bar
Companies have also been able to leverage a range of voluntary initiatives gaining traction in Canada. These initiatives can be attractive because they harmonise diverse frameworks, organise complex ideas, and combine the collective wisdom of a range of stakeholders.
This last aspect is particularly relevant to Canadian companies that often have a small number of staff dedicated to corporate responsibility compared with their international peers, but for whom the issues are no less complex or costly to address. The idea of some pre-packaged, internationally recognised thinking can be quite appealing.
The most prevalent of these is the Global Reporting Initiative. For a while the very idea of reporting and transparency was lacking in Canada, and – with the exception of the extractive companies – there were few voluntary non-financial disclosure efforts. However, in recent years many new reporters have come on board including prominent brands such as retailers Canadian Tire and Loblaws, and fast food chain Tim Hortons.
As the amount of reporting has increased, so too has the reliance on the GRI. Companies such as Gildan Activewear, which had been communicating a range of non-financial information since 2004, have voluntarily developed more robust, internationally comparable reports in their most recent communications.
On an international level, Canadian companies have played a role in the development of voluntary standards. Bell Canada, the phone company present in every household until the deregulation of the telecommunications market in recent years, was a founding member of the Global e-Sustainability Initiative (GeSI) dedicated to making electronics more environmentally sustainable.
While GeSI’s membership is dominated by European and US companies, the Canadian sustainability team at Bell played an active role in both developing GeSI and in promoting its work among their peers in what is an otherwise fiercely competitive industry.
Antagonism just below the surface
Yet NGOs continue to have more than a few axes to grind with corporations. Rainforest Action Network and Mining Watch are two Canadian activist watchdogs that regularly critique resource extraction activity. They picketed outside the headquarters of Royal Bank of Canada in June last year demanding that the bank cease investing in Alberta oil sands projects.
RBC is a signatory of the Equator Principles – as are the other four major Canadian banks – but, according to the NGO community, it is debatable to what effect. In 2004, in response to a question as to whether or not the principles have caused RBC to turn down applications for funding, Sandra Odendahl, RBC’s senior manager in environmental risk management, said: “There are usually a lot of reasons why a deal doesn’t go through – to put it down to just the Equator Principles would be naïve in the extreme.”
At that point, according to Odendahl, the bank had applied the principles in three cases: a Canadian oil sands project and two developing country oil and gas projects. And yet, fast forward to 2009 and RBC is, according to Rainforest Action Network, the largest financial backer of the oil sands.
While it would be tempting to view the melée at RBC’s doorstep as an isolated Canadian circumstance – Canadian activists targeting Canadian banks investing in Canadian projects – the potential for impact is international in scope. Canadian financial institutions are key investors in the extractive sector. In 2006, Canadian extractive interests were active in 108 countries, according to a report from the Canadian Centre for the Study of Resource Conflict.
When the relatively educated, democratic, networked, and internet savvy population is taken into account, the voices of Canadian activists have the potential to shape the way resources are extracted globally perhaps more than any other NGO community in the world.
Frustrated by business
Even the more business-friendly NGOs such as WWF have their frustrations. Hadley Archer, WWF Canada’s vice-president for strategic partnerships, says that the scale of the action is nowhere near the scale of the problem. “It’s the biggest companies that need to change, but they are the ones that are the most conservative and most likely to take an incremental approach. We need a new paradigm and it will be exciting and good for the economy, but it’s hard to get there.”
Examples of wider NGO-corporate collaboration, such as the Forest Stewardship Council and Marine Stewardship Council certification processes, are often cited as success stories. However, as Archer points out, “it’s a 10 to 15 year cycle for one commodity certification, and not everyone’s going to be happy with it”. He argues that as FSC doesn’t tackle climate change, for example, it is now attracting criticism from environmental NGOs, despite the fact it’s a “wonderful system [with] great market uptake”.
Canadian NGOs and industry associations do collectively recognise the scope of the challenge, and they continually try to rally their constituents, some more delicately than others.
Lynda Yanz of MSN sums it up neatly: “These problems are pervasive, persistent and systemic and cannot be eliminated without collaboration with competitors, NGOs and unions. There really can be benefits to honesty, transparency and collaboration.”