Richard Ivey School of Business, The University of Western Ontario

Richard Ivey School of Business, The University of Western Ontario

March 04, 2008 11:35 ET

Ivey/Jantzi report shows Canadian companies need to step up on CSR

The year in review: Laudable Initiatives; Weak Outcomes

Attention: Business/Financial Editor, Environment Editor TORONTO ONTARIO/MEDIA RELEASE--(Marketwire - March 4, 2008) -
A new report finds that Canadian companies are investing significantly in socially responsible programs, policies and public statements. The report, a collaboration by the Richard Ivey School of Business and Jantzi Research, said overall corporate social responsibility scores were up in 2007 versus 2006, especially in the areas of corporate governance, employees and the community.

The report wasn't all positive, however, with a closer look revealing that the improved corporate social responsibility scores tended to be driven more by changes in intentions (policies and programs) rather than outcomes.

"Canadian companies are putting in place the correct structures, but now need to follow through on their intentions and step up to the plate," said Tima Bansal, Associate Professor at Ivey and one of the leaders on the research.

For some companies, improvements in corporate governance, such as separating the roles of Chair and CEO - were offset by increased executive compensation, which is generally regarded as an erosion of good governance.

Companies on average invested more in diversity initiatives, although this was not accompanied by an increase in gender diversity at the senior management level. Companies also invested more in maternity/paternity programs and were proactive in executing health and safety audits, but health and safety penalties and convictions actually increased.

There are a few reasons why improvements in socially responsible policies and programs are not mirrored by improved outcomes, said Kevin Ranney, Director of Research at Jantzi Research. "Policy is notoriously slow to impact outcomes. It can take years for the benefits of employment equity initiatives, for example, to be realized. In addition, some well-intentioned policies are not adequately supported by effective management systems, so they become difficult to implement in practice," he said.

While trends in corporate social responsibility in Canada are encouraging, the study found there is more to be done to realize the benefits of these initiatives.

Other study highlights:

* On the whole, the improvement in socially responsible initiatives was widespread - driven by many firms making positive changes, not just a few firms making large leaps.

* 65% of firms improved their CSR score between 2006 and 2007, and only 1% made no change at all.

* At the industry level, positive changes were seen in key sectors such as banking and oil & gas. However, the retail, telecommunications and insurance industries appear to be lagging.

* While Canadian firms improved their performance in the employee category (work-life balance, diversity management, health & safety, union relations), the improvement was narrow; driven by a relatively small number of firms making great strides.

* Canadian firms showed little improvement in the category of natural environment. Just over 40% of firms improved their performance, 27% went backwards and 32% of firms maintained the same score in 2007 versus 2006.

* The majority of firms in the banking, and gold & precious metals industries performed worse on their environmental score in 2007 than in 2006. Other industries that rated poorly were chemicals, and energy, equipment and services.

"We're pleased to see increased interest in corporate social responsibility among Canadian companies. Corporate awareness and integration of these issues is significantly different than it was 15 years when we began tracking their environmental, social and governance performance," said Michael Jantzi, President & Founder of Jantzi Research. "We're also excited about our new partnership with the Ivey Business School and the value of its analysis provided in this report."

The full report "Corporate Social Responsibility in Canada: The 2008 Ivey-Jantzi Research Report" by authors Slawinski, N., Maurer, C., Bansal, P., and Higgins, C. can be found at www.ivey.ca/BSV/CSR2008.

About the Richard Ivey School of Business, The University of Western Ontario
The Richard Ivey School of Business at The University of Western Ontario (www.ivey.ca) offers undergraduate (HBA) and graduate degree programs (MBA, Executive MBA and PhD) in addition to non-degree Executive Development programs. Ivey has campuses in London (Ontario), Toronto, and Hong Kong. Ivey recently redesigned its curriculum to focus on Cross-Enterprise Leadership - a holistic issues-based approach to management education that meets the demands of today's complex global business world.

About Jantzi Research
Jantzi Research is an independent investment research firm located in Toronto, Ontario. It offers a full range of innovative socially responsible investment research products and services, including the Canadian Social Investment Database (CSID).

-30-

Marisa Kanas, Richard Ivey School of Business 519-850-2536, mkanas@ivey.ca
Paula Glick, Jantzi Research 416-861-0403 x17, pglick@jantziresearch.com
IN: EDUCATION, ENVIRONMENT

Contact Information

  • Marisa Kanas, Communications Specialist, Richard Ivey School of Business
    Primary Phone: 519-850-2536
    E-mail: mkanas@ivey.ca