Corporate Social Responsibility
Table of contents
- What is Corporate Social Responsibility (CSR)?
- Why is CSR Important to Business?
- How Does the Government of Canada Support CSR?
- Canada’s Approach to Supporting CSR Abroad
- Voluntary Dispute Resolution Mechanisms
- Anti-Corruption and Anti-Bribery Efforts
- Supporting CSR in Specific Areas
- Government of Canada CSR Engagement Abroad
- Resources and Tools
- Canada’s Approach to Supporting CSR Abroad
What is Corporate Social Responsibility (CSR)?
Corporate Social Responsibility (CSR) is defined as the voluntary activities undertaken by a company to operate in an economic, social and environmentally sustainable manner.
The Government of Canada understands that responsible corporate behaviour by Canadian companies operating internationally not only enhances their chances for business success but can also contribute to broad-based economic benefits for the countries in which they are active and for Canada. Investing and operating responsibly also plays an important role in promoting Canadian values internationally and contributes to the sustainable development of communities. The Government of Canada is therefore committed to promoting responsible business practices; and expects and encourages Canadian companies working internationally to respect all applicable laws and international standards, to operate transparently and in consultation with host governments and local communities, and to conduct their activities in a socially and environmentally responsible manner.
Why is CSR Important to Business?
When companies operate in an economically, socially and environmentally responsible manner, and they do so transparently, it helps them succeed, in particular through encouraging shared value and social license. Management and mitigation of social and environmental risk factors are increasingly important for business success abroad, as the costs to companies of losing that social license, both in terms of share price and the bottom line, may be significant. As Canadian firms take advantage of global opportunities, there is an increasing understanding that incorporation of responsible business practices into investments and operations abroad not only benefits local economies and communities, but makes good business sense.
How Does the Government of Canada Support CSR?
The Government of Canada has in place a variety of initiatives which demonstrate Canada’s longstanding commitment to promoting responsible business practice. Through its actions, the Government facilitates the commercial success of Canadian companies active abroad while enhancing the contribution of their activities to the broad economic growth of Canada and its trading partners, including those with developing and emergent economies. We work with the Canadian business community, civil society organizations, foreign governments and communities, as well as other stakeholders to foster and promote responsible business practices, and thus support sustainable economic growth and shared value.
Canada’s Approach to Supporting CSR Abroad
The Government provides CSR-related guidance to the Canadian business community, including through Canadian embassies and missions abroad. Recognizing, however, that company actions alone do not guarantee commercial success or sustainable local benefits, the Government of Canada works with a range of interlocutors to promote CSR. Canada’s network of diplomatic missions abroad actively promotes awareness and understanding of the importance of responsible business practice and creates opportunities for relationship building through conferences, workshops and other activities involving companies, representatives of host governments, and civil society. In addition, Canada provides funding to numerous CSR projects and initiatives in countries around the world.
Canada also promotes CSR at multilateral and bilateral levels. Multilaterally, Canada promotes international CSR standards in a number of fora including the OECD, the Group of Seven, the Asia Pacific Economic Co-operation and the Organization of American States. Participation in multilateral fora provides Canada not only an opportunity to share knowledge, but also to work together to promote and strengthen international CSR guidelines to the benefit of all stakeholders. Canada’s efforts to promote CSR are further advanced at the bilateral level. For example, the inclusion of voluntary provisions for CSR in its recent Foreign Investment Promotion and Protection Agreements (FIPAs) and Free Trade Agreements (FTAs), including those with Peru, Colombia, Panama and Honduras. Read more on Canada's trade Negotiations and Agreements.
Voluntary Dispute Resolution Mechanisms
Many of the Government’s CSR efforts are aimed at encouraging positive relations between companies and their stakeholders. However, when necessary, Canada has two mechanisms to assist with company - community dialogue facilitation and conflict resolution: the review processes of Canada’s National Contact Point for the OECD Guidelines for Multinational Enterprises (NCP) and of the Office of the Extractive Sector CSR Counsellor. Canada is the only country to effectively tie, and apply, access to government of Canada trade advocacy support in foreign markets contingent on a company’s corporate social responsibility practices and engaging in good faith with the Government’s two dispute resolution mechanisms.
Anti-Corruption and Anti-Bribery Efforts
Canada's legislation to implement the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, the Corruption of Foreign Public Officials Act (CFPOA), came into force on February 14, 1999. The Act makes it a criminal offence to bribe a foreign public official in the course of business. Under this law, individuals as well as corporations can be prosecuted for offenses committed inside and outside of Canada. The CFPOA reinforces Canada's leadership role in fighting corruption and promoting good business practices at an international level and confirms the Government's commitment to the OECD Anti-Bribery Convention.
Supporting CSR in Specific Areas
CSR in Canada’s International Extractive Sector
The extractive sector, which includes mining, oil and natural gas, has significantly contributed to Canada’s economic growth and prosperity, including through the strength of its international presence. To enhance the ability of Canadian international extractive sector companies to manage social and environmental risks, and to operate in a way that brings lasting benefits to local communities and host countries affected by their projects, Canada created a framework to guide CSR efforts of the extractive sector known as the CSR Strategy. Launched in 2009, and updated in 2014, the CSR Strategy is part of Canada’s efforts to help foster and promote sustainable economic development and responsible business practices in countries where Canadian extractive sector companies operate abroad. For further information on the CSR Strategy, please see: Doing Business the Canadian Way: A Strategy to Advance CSR in Canada’s Extractive Sector Abroad.
Canada is advancing responsible business conduct through its efforts to improve transparency and accountability in the extractive sector. The Extractive Sector Transparency Measures Act (the Act) was brought into force on June 1, 2015. The Act delivers on Canada’s international commitments to contribute to global efforts to increase transparency and deter corruption in the extractive sector by requiring extractive entities active in Canada to publicly disclose, on an annual basis, specific payments made to all governments in Canada and abroad. Further information can be found on the Natural Resources Canada web page of the Act.
Canada also joined the Extractive Industries Transparency Initiative (EITI) in February 2007, as a supporting country and donor. The EITI supports improved transparency in resource-rich developing countries through the full publication and verification of company payments and government receipts from oil, gas and mining operations.
Conflict-Sensitive Business Practices
An area in which Canada is taking an increasingly active role is the promotion of conflict-sensitive business practices in conflict-affected states. Investment by Canadian businesses in fragile and conflict-affected states can contribute to the sustainable development of communities and be an important component of a country’s post-conflict recovery, producing meaningful employment, generating government revenue, and being a catalyst for rebuilding commercial infrastructure. By promoting conflict-sensitive business practices, the Government of Canada can help Canadian companies seize business opportunities in challenging environments, while bringing tangible stability and peace-building benefits.
The Government of Canada, companies, and civil society have been at the forefront of efforts to create a global consensus on responsible mining and sourcing practices to address the phenomenon of “conflict minerals” in the gold, tin, and tantalum and tungsten sectors. The Government of Canada played a leading role in the negotiation of the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, and continues to be actively engaged in its promotion and implementation. Canada has also provided strategic funding of key projects towards peace and prosperity in the Great Lakes Region, and was a founding member of the Kimberley Process, which came into effect in 2003, to stem the trade in conflict diamonds.
Due Diligence in the Retail Garment Industry
Canada is also supporting due diligence and responsible business practices within the ready-made garment industry, and sustainable sourcing of ready-made garments from international suppliers and manufacturers. Governments, businesses, non-profits and other organizations are increasingly integrating social and environmental objectives into the purchasing process which can be a means for leveraging social benefits and fostering sustainable economies. An example of Canada’s efforts in this area is $8 million in support over four years for a joint initiative with the International Labour Organization for improving working conditions in the ready-made garment sector in Bangladesh, to help ensure that Bangladesh’s garment factories are properly assessed for safe working conditions, and remedial action is undertaken. Further information on Purchasing for Sustainability can be found on Industry Canada’s website.
Government of Canada CSR Engagement Abroad
For The Government of Canada works with a range of interlocutors to promote CSR, and provides funding to numerous CSR projects and initiatives in countries around the world. Canada’s network of diplomatic missions abroad actively promotes awareness and understanding of the importance of responsible business practices and creates opportunities for relationship building through conferences, workshops and other activities involving companies, representatives of host governments, and civil society. Some examples include:
- Collaborative sustainable development - Peru (Embassy of Canada to Peru website)
- CSR at the heart of La Francophonie - Democratic Republic of Congo (Embassy of Canada to the Democratic Republic of Congo website)
Resources and Tools
Below are a series of snapshots developed for companies that respond to specific situations and challenges related to CSR.
- CSR Snapshot – Community Stakeholder Engagement: HTML version | PDF version * 0.5 MB
- CSR Snapshot – Managing Requests for Community Support: HTML version | PDF version * 0.7 MB
- CSR Snapshot – Hiring Responsibly: HTML version | PDF version * 0.4 MB
Resources and Tools from Other Departments
Innovation, Science and Economic Development Canada: Corporate Social Responsibility: An Implementation Guide for Canadian Business
Natural Resources Canada: Corporate Social Responsibility (CSR) Checklist for Canadian Mining Companies Working Abroad
Natural Resources Canada: Catalogue of Corporate Social Responsibility (CSR) Practices (CSR e-Catalogue)
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