While businesses often bring employment opportunities and economic power to their communities, they can also bring negative impacts such as pollution or habitat destruction. As consumers become increasingly interested in corporate sustainability, understanding the impact that a business has on their community and their planet is vital.
The Canadian government has put out resources to encourage businesses to adopt socially and economically responsible practices, but are they working? In our first article in this series, we explored consumer feelings about corporate sustainability. This time, to get a picture of the efforts business leaders are making in this respect, we surveyed more than 300 managers and executives across Canada about their sustainability initiatives. A full survey methodology can be found at the end of the article.
77% of companies have a corporate social responsibility (CSR) policy in place
According to the Canadian government, corporate social responsibility (CSR) refers to “the voluntary activities of companies, over and above regulation, that serves to integrate social, environmental, and economic concerns into their activities.” These activities cover a range of progressive actions, such as offsetting carbon emissions or achieving gender parity in the workplace. The majority of Canadian decision-makers (77%) reported having such measures in place.
The actions taken in CSR initiatives vary greatly, as do their missions. 67% of respondents report investing in environmental efforts, which could include waste reduction, pollution prevention, and adopting clean energy, amongst other things. 64% also made social efforts such as diversity and inclusion (D&I) initiatives, while 39% invested in economic sustainability such as incentivizing sustainable practices and measuring these efforts with key performance indicators.
Although more than half (51%) of consumers said they would be influenced by a company’s sustainable measures when choosing a new job, few businesses (27%) cited this as their motivation to implement corporate sustainability. The main reasons for investing in CSR measures were to save energy (43%), to save money (38%), and to be part of a positive cause (31%).
Decision makers cite external pressure as a motivating factor
Reasons for implementing CSR policies may be varied, but nearly half of managers (46%) cited external pressure as one of their main motivators. As consumer expectations regarding sustainability grow, managing the reputation of a brand and demands from consumers have become crucial tasks for every organization.
To get specific, 16% of decision-makers said pressure from consumers was the reason for investing in corporate sustainability while 30% said they were motivated by reputation management —or protection and promotion of their brand. Over a third of consumers (38%) responding to the adjacent survey by Capterra suspected that PR-related reasons were motivating companies to take sustainable actions. This shows a higher consumer distrust than perhaps is merited in the case of companies’ corporate social responsibility.
Corporate social responsibility costs are a major concern for SMEs
Out of the managerial Canadians working in companies with sustainable measures in place, 30% identify the cost as the biggest disadvantage to those programs. Respondents citing high costs tended to be from the tourism (60%), communications (44%), construction (41%) and retail (40%) industries.
Despite almost one-third of companies finding the costs to be high, the majority (48%) of respondents said that their CSR measures had saved their organization money in the long run.
The COVID-19 pandemic has had a positive impact on CSR initiatives
As Canadians in lockdown became aware that their purchasing habits could affect their community, a shift began to occur. Since the pandemic began, two-thirds of consumers (67%) have reassessed their buying habits (as reported in our first article). This has likely inspired SMEs to respond in kind by augmenting their sustainable practices to meet demand; 36% of managers report increasing CSR programs since the COVID-19 pandemic began.
From the decision-makers who have increased sustainable measures:
- 69% augmented environmental efforts such as recycling programs.
- 65% increased socially equitable efforts such as D&I initiatives.
- 46% increased economically sustainable efforts such as incentivizing sustainable measures.
When asked whether they would continue these initiatives post-pandemic, the majority of managers (72%) said they will. A further 26% of manager respondents said that they will not only keep CSR initiatives in place but increase investments in that area. Only 2% of respondents report a plan to decrease their corporate sustainability efforts after the pandemic, which shows that the grand majority of business leaders are aware that these changes in consumer expectations are here to stay.
Employees are vital in implementing sustainable practices
Company decision-makers may have the final say in whether CSR initiatives are adopted, but employees have proved themselves to be important collaborators when it comes to corporate sustainability. Over 86% of respondents in managerial positions report that their employees have proposed sustainability measures, over 54% of which were implemented.
Focusing on SMEs’ capacity to launch sustainable measures, we found that only 31% reported having a sustainability team in place. For those lacking a dedicated team, 24% made leadership positions responsible for CSR programs, while 17% reported assigning those duties to the HR department.
Most SMEs rely on software to help CSR efforts
Most respondents to the survey (62%) use software to support and measure their sustainable efforts. Given that 28% of leaders said that the main obstacle in implementing a CSR program is the difficulty of measuring the return on investment (ROI), the software is an important asset for any company-led initiative.
The most common software used by respondents to aid their CSR initiatives are:
- Remote work software (cited by 36% of respondents) could help work-from-home policies that reduce the carbon emissions potentially caused by travelling to the office.
- Supply chain management software (31%) digitizes the flow of business materials, making inefficient practices evident.
- Waste management software (29%) gives consistent reporting on all waste generated by an organization, allowing for enhanced reporting and compliance.
- Reporting and analytics software (28%) provides a wide overview of key performance indicators which measure and track the success of CSR initiatives.
- Energy management software (27%) monitors and tracks utility bills to help businesses reduce energy consumption.
These tools can help employees of every level recognize and eliminate less-than-sustainable practices in the workplace. Of those who employed software to support CSR, 47% said the biggest benefit in doing so was the time saved. 43% said it helped streamline the organization of corporate sustainability efforts, while 38% it has saved their organization money.
For Canadian businesses, investing in programs that promote sustainability is a beneficial approach for many reasons. While most report taking these actions to save time and money, difficulties in measuring the overheads and benefits of CSR initiatives may be blocking some SMEs from launching sustainable measures.
To help companies take on a socially responsible approach, they should tap into all available sources of support: customers who prefer sustainable businesses, employees who suggest ideas, and technical support such as sustainability software —all of which will help make it easier for SMEs to embark on the path to sustainability.