Part 2

Implementing corporate social responsibility

There is no one-size-fits-all method for implementing a corporate social responsibility (CSR) approach: each firm has unique characteristics and circumstances that will affect how it views its social responsibilities; and each will vary in its awareness of CSR issues and how much work it has already done towards implementing a CSR approach.

That being said, there is considerable value in proceeding with CSR implementation in a systematic way -- in harmony with the firm's mission, and sensitive to its business culture, environment and risk profile, and operating conditions. It is clear that many firms are already engaged in customer, employee, community and environmental activities that can be excellent starting points for firm-wide CSR approaches. CSR can be phased in by focussing carefully on priorities in accordance with resource or time constraints. Alternatively, more comprehensive and systematic approaches can be pursued when resources and overall priorities permit or require. The bottom line is that CSR needs to be integrated into the firm's core decision making, strategy, management processes and activities, be it incrementally or comprehensively.

What follows is a broad framework for implementing a CSR approach that builds on existing experience as well as knowledge of other fields, such as quality and environmental management. The framework follows the familiar "plan, do, check and improve" model that underlies such well-known initiatives as those of the International Organization for Standardization in the areas of quality and environmental management systems. The framework is also intended to be flexible, and firms are encouraged to adapt it as appropriate for their organization.

CSR implementation framework and corporate governance

A well-designed CSR implementation framework integrates economic, social and environmental decision making throughout a firm -- from the board of directors to front-line officials and contractual supply-chain partners -- and is therefore intimately connected with effective corporate governance. A properly governed firm can reap optimal benefits for itself and its shareholders, and in turn for those who are affected by the firm's activities. At all levels of a firm, inadequate direction and control of its activities and assets can jeopardize its very ability to operate.

In recognition of this, industry associations, investors, governments and others are increasingly calling for, among other things, enhanced transparency and disclosure, and more rigorous corporate governance standards, such as the separation of the jobs of chairman and chief executive, improved board structures and effective codes of conduct. There are also calls for boards of directors and senior managers to consider the societal impacts of their firm's activities, given that those affected have the potential to significantly impair or enhance a firm's ability to create wealth. In this way, the notion of corporate governance is expanding to include some of the broader elements of CSR. In particular, there is a need for corporate decision makers to consider the effect of firm-society interactions on performance, to develop appropriate responses that minimize harmful social and environmental impacts and optimize opportunities, and to measure and disclose progress in this area.

This guide proposes an implementation framework comprising six key tasks (see chart below). In recognition of the fact that firms are at different levels of sophistication and development with respect to CSR, it is understood that firms may choose to forego a particular aspect or task when it has already been undertaken.

Implementation Framework

When? (Conceptual phase)	What? (Task delineation)	How? (Checkpoints on the journey)
Plan	1.Conduct a CSR assessment	Assemble a CSR leadership team Develop a working definition of CSR Review corporate documents, processes and activities Identify and engage key stakeholders
	2. Develop a CSR strategy	Build support with senior managment and employees Research what others are doing prepare a matrix of proposed CSR actions Develop ideas for proceeding and the business case for them Decide on direction, approach and focus areas
Do	3. Develop CSR commitments	Do a scan of CSR commitments Hold discussions with major stakeholders Create a working group to develop the commitments Prepare a preliminary draft Consult with affected stakeholders
	4. Implement CSR commitments	Develop an integrated CSR decision-making structure Prepare and implement a CSR business plan Set measurable targets and identify performance measures Engage employees and others to whom CSR commitments apply Design and conduct CSR training Establish mechanisms for addressing problematic behaviour Create internal and external communications plans
Check	5. Verify and report on progress	Measure and verify performance Engage stakeholders Report on performance
Improve	6. Evaluate and improve	Evaluate performance Identify opportunities for imporvement Engage stakeholders
Cross-check: One cycle completed		Return to plan and start the next cycle

The framework is intended to help boards of directors, managers, employees and others assess a firm's effects on society and the challenges and opportunities associated with taking these impacts into account in decision making and business activities. It should also help stakeholders transform these insights into strategies, commitments, organizational changes and activities that can form the basis for measuring, reporting and evaluating CSR performance and making appropriate changes. As understood here, a firm's CSR approach is an integral part of its core business objectives, approaches and competencies.

CSR and small businesses

In Canada, 98 percent of Canadian companies fall into the “small business” category. Many of these firms have fewer than 50 employees; more still have fewer than 5 people. There are approximately 780 000 of these micro-businesses in Canada. Each year, 150 000 Canadians start their own businesses.¹

Smaller firms tend to have less public profile than their large counterparts, so non-governmental organizations may not target them for failing to take their societal impacts into account. However, the support of the community around small firms can be as essential for their success as it is for large businesses. In fact, larger firms in the CSR spotlight may seek out as business partners small local firms with CSR approaches in place.

A Canadian Federation of Independent Business survey of its members found that doing things right, even at a cost, is important for small businesses. For example, the survey revealed that "SMEs [small and medium-sized enterprises] are strongly committed to environmental protection, which is evident through their significant progress achieved during the past decade."²

The distinct challenges facing small business -- such as being strapped for time, money and resources -- are well known. But while these challenges are great, smaller businesses are also recognizing the value of embracing corporate social responsibility.

The CSR implementation framework set out in this guide is built around the “plan, do, check and improve” model, which is a sound approach for firms of any size. However, many of the steps may be too elaborate for small businesses. To address the needs of small business owners and their employees, tips for simplifying the process are provided throughout, in boxes marked with this icon. In addition, a list of suggestions for CSR activities particularly suited to small businesses is located here. The suggestions may also be of interest to those in larger firms.

Canadian Business for Social Responsibility's Small Business Toolkit is available free for members or for a small fee to non-members. For information on the toolkit, visit the CBSR website . See also the case studies and related material on the World Business Council for Sustainable Development website.

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1. For statistics and information on small business in Canada, go to the Canadian Federation of Independent Business website

2. Canadian Federation of Independent Business, The Natural Facts, June 2001, a survey of more than 4300 small businesses across Canada.