Corporate social responsibility: “doing good” or just doing better?

This past summer, two major events raising the issue of corporate social responsibility occurred in Québec. First, the Lac-Mégantic tragedy highlighted the dangerous strategies put in place by railway companies to save money. Then, illegally stored PCB was found in Pointe-Claire, in the West Island of Montréal, after which discovery the offending firm kept silent for many days regarding its hidden activities.

By an odd coincidence, this summer also saw weekly magazines Maclean’s and L’Actualité publish a special feature on Canada’s most socially responsible companies. It included a short description of all the companies listed in a Sustainalytics top 50, highlighting the criteria which made it stand out. At least neither of the firms involved in the above events are listed, but a number of choices remain questionable.

Two oil sands companies, Suncor and Cenovus, appear in the Energy & Utilities category. Talisman, which promotes shale gas, also made the cut. However, IRIS has recently shown how severely tar sands pollute and destroy the environment. Furthermore, Talisman features on another list: that of the top 3 shale gas well operators with the most violations in Pennsylvania. It is also involved in numerous international conflicts.

IAMGOLD was included in Materials for using biodiversity mapping to ensure conservation. However, the multinational company has proven controversial in Ecuador, where it harassed local populations for eight long years. It wanted to produce oil where inhabitants wished instead to protect the precarious ecosystem.

As for PotashCorp, it was congratulated on having “adopted the ‘say on pay’ approach, which allows shareholders to submit a non-binding vote on executive compensation” (emphasis added). Hence all that is required to be deemed “responsible” is to ask shareholders for their opinion: no need to actually follow it. Of course, its efforts to conserve water are mentioned, along with its ability to exceed its own target for greenhouse-gas emission reductions. However, all these good deeds do not prevent PotashCorp from trying to get the necessary permits to mine sensitive wetlands.

Loblaws also made it onto the list, despite locking out its employees from many of its warehouses in Québec (Québec City in 2010, Rouyn-Noranda and Témiscaming in 2012). The situation added an extra layer of absurdity to their local sourcing policy: strawberries from Île d’Orléans had to be shipped to Montréal before they were brought back to neighbouring shops in and around Québec City. It’s also worth pointing out that the Toronto-based company refused to admit that the lock-out was over to avoid paying severance pay to its former employees despite the fact that the warehouse at the centre of the conflict was closed. So yes, Loblaws does grant scholarships and its sustainable seafood policy may be interesting, but is that enough to counterbalance wrongdoing against its labour force?

The previous examples have us raising some eyebrows when it comes to “corporate social responsibility.” This sort of ranking simply fits into our economic system, the basic rationale of which is the pursuit of profit. Hence, only publicly listed companies with a “significant market capitalization” were considered. That already introduces a bias. Afterwards, the emphasis lies not so much on the companies’ practices, but on how they have improved over time.

Should a company chooses to tip its pollutants downstream instead of upstream of a village, it would be deemed innovative, and even more so if its marketing department showcased the new revolutionary policy. The water is still just as polluted, but villagers are healthier. In the end, instead of highlighting interesting practices, it’s the company as a whole which is being promoted. Obviously, efforts to try to protect the environment, to improve the social acceptance of projects, to increase management transparency, etc. must be acknowledged. However, is this piecemeal commitment to communities and the environment sufficient to produce “leaders in corporate social responsibility”?

This article was written by Eve-Lyne Couturier, a researcher with IRIS—a Montreal-based progressive think tank.