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 Comprehensive Approach to Supporting CSR
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 the 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 Comprehensive Approach to Supporting CSR
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 has provided 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 Eight, the Asia Pacific Economic Co-operation, the Organization of American States, la Francophonie, and the Commonwealth. 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 most 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’s NCP has had 14 requests for review since it was established in 2000, while the CSR Counsellor’s Review Process has received six cases since its establishment in 2010. An emerging area of interest is the contribution of dialogue facilitation and non-judicial mediation of local disputes to corporate success and broad local benefits.
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, Canada created a unique CSR framework for the extractive sector entitled “Building the Canadian Advantage: a Corporate Social Responsibility Strategy for the Canadian International Extractive Sector” (the CSR Strategy). Launched in 2009, 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. To view the Strategy announcement, please see the News Release: Minister Day Announces New Initiatives to Support Responsible Practices for Canadian Businesses Abroad.
Canada is advancing responsible business conduct through its efforts to improve transparency and accountability in the extractive sector. In June 2013, the Government announced its intent to establish new, mandatory reporting standards for Canadian extractive companies to enhance transparency of the payments they make to governments. Read more about mandatory reporting. 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.
For more information on the Government of Canada efforts on CSR internationally, you are welcome to visit Foreign Affairs, Trade and Development Canada's (DFATD) CSR E-Bulletin. It provides subscribers with relevant, up-to-date information detailing DFATD and the Government of Canada’s CSR initiatives both at home and abroad. We trust that you will find these issues informative, and look forward to hearing your feedback with regards to this new resource. If you wish to be added to the distribution list, please send a message to: email@example.com.
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