3.2 Sustainability Tools, Practices, Research and Awareness

Sustainable development strategic outcome: Increased use by firms, industries and institutions of sustainability and corporate social responsibility practices, and increased consumer awareness of sustainability issues

New organizational processes have become a key driver of sustainability performance. Companies are increasingly introducing process-efficiency tools and practices in order to make measurable improvements in firm-level productivity, as well as in environmental and social performance.

Firms that use these tools and practices often gain competitive advantages in the marketplace by exploiting "first-to-market" benefits associated with delivering less material-intensive products to consumers. Although a number of corporations have implemented these tools and practices, it continues to be a challenge for Small and Medium-Sized Enterprises" (SMEs), mainly because of lack of awareness, time pressures and high implementation costs. Increasingly, however, the corporations that purchase from SMEs are driving this change through the value chain by requiring that SME suppliers adhere to specific international standards (e.g., the International Organization for Standardization, or ISO). Also, "market pull" factors such as heightened consumer demand for more environmentally friendly products, which feature enhanced durability and functionality, have led to improved sustainability performance among firms.

Consumer behaviour and preferences can have a significant effect on the activities of businesses. Specifically, the choice to consume certain products and services and to adopt certain lifestyles can have positive and negative economic, environmental and social repercussions, which in turn present opportunities and challenges for firms.

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Corporate social responsibility (CSR) initiatives have emerged in recent years as key drivers in the sustainability performance of Canadian industry. Many firms have demonstrated the productivity, environmental and social performance gains that accrue from integrating CSR practices into business and risk-management strategies. In addition, the concept of shareholder value is gradually being broadened to include non-financial aspects of firm performance, such as how businesses fulfill their environmental and social responsibilities to society. A number of firms have also taken substantial steps to improve accountability and transparency to shareholders by reporting publicly on their sustainability performance.

Industry Canada has a continuing role to play in further disseminating tools and practices related to process improvement, and in corporate social responsibility and sustainability. These tools and practices will enable companies to improve their triple-bottom-line performance and address increasing consumer demands for more sustainable products.

Eleven action plan items are intended to achieve this strategic outcome. Details on each are provided below.

Broadening the Use of Corporate Social Responsibility Management Tools and Applications

Corporate social responsibility (CSR) can contribute to realizing Canada's policy priorities, such as improved business performance and income growth, as well as contributing to Canadians' standard of living and quality of life. It is seen as the private sector's way to integrate the economic, environmental and social imperatives of their activities.

"With a focus on being a good corporate citizen, we are implementing business practices that support long-term sustainable growth while protecting the environment and improving the quality of life in the communities we serve."
--TELUS 2005 Business Review (annual report)

CSR often involves creating solutions to environmental and social challenges, and collaborating with internal and external stakeholders to improve business performance. Industry Canada has contributed significantly to the following initiatives: the development of Corporate Social Responsibility: An Implementation Guide for Canadian Business; the development of an ISO social-responsibility guidance standard; the development of an Industry Canada CSR website; and consumer group research on sustainable development and climate change.

Federal Departments Working Together on Corporate Social Responsibility

In 2006, Industry Canada renewed its original MOU on CSR with Environment Canada, Foreign Affairs and International Trade Canada, and Natural Resources Canada. This renewal will enable Industry Canada to continue cooperative efforts with its federal partners on projects of mutual interest, including those that encourage the dissemination of corporate responsibility and sustainability information, tools and practices in Canadian business.  CSR website

Industry Canada is committed to broadening the use of CSR management tools and applications in an effort to increase the number of firms that integrate CSR into the decision making of their organizations. CSR tools can be applied to corporate planning, operations, audit and evaluation, and productivity improvement.

Action Plan Item

Industry Canada will broaden the basis for Canadian industry to implement CSR by:

  • supporting efforts to build convergence of CSR standards at the domestic and international levels (for example, Industry Canada will work to internationalize a voluntary guide on implementing CSR that it developed for Canadian industry in 2006)
  • facilitating the development or demonstration of at least one new CSR tool that can be employed to help implement CSR-oriented business approaches, and at least one event that will aid in the application of CSR for management planning, implementation and evaluation purposes
  • improving the consumer perspective on CSR by developing a consumer CSR checklist, developing a CSR-related tool, and pilot-testing the new CSR implementation guide within the Office of Consumer Affairs and posting this guide on the Industry Canada website
  • supporting a minimum of two research studies to improve the understanding of CSR best practices applied in Canadian industry

Responsibility: Strategic Policy Branch and Office of Consumer Affairs: CSR website

Expected Three-Year Result

  • Enhanced knowledge capacity of CSR tools and wider application of CSR in the Canadian marketplace

Performance Indicators

  • Number of web references to the new CSR international guide
  • Number of visits to Industry Canada's CSR web page on the CSR implementation guide
  • Number of visits to Industry Canada's CSR website
  • Identification of enhanced CSR knowledge capacity in the SDS IV mid-term evaluation and SDS V issues scans

Promoting Corporate Responsibility and Sustainability Awareness

"BC Hydro's environmental long-term goals are an integral part of ensuring that we will have a sustainable future for our business and for the next generation of B.C. residents. BC Hydro is working diligently to operate our business in ways that produce no net environmental impacts."

-- BC Hydro, Reporting on Our Triple Bottom Line Performance, Annual Report, 2006

Canadian businesses have recently made notable gains in the area of CSR and have used these gains, in some circumstances, to improve their financial performance. Nonetheless, firms in Canada are still facing the challenge of assembling and using information more effectively to respond to calls from society to integrate social and environmental components into business strategies, operations and performance. A situation of imperfect information in the marketplace can induce businesses to use resources in a less-than-efficient manner. Availability of resources and effective CSR-oriented approaches can contribute to reducing business risks, managing liabilities, improving productivity and strengthening competitiveness.

Action Plan Item

Industry Canada will promote CSR and expand CSR information and awareness by:

  • promoting corporate responsibility and sustainability at conferences, workshops and seminars
  • supporting the quantity and quality of corporate sustainability reporting by Canadian industry, as well as partnering in related research on company and industry sector levels to develop a national perspective on corporate responsibility and sustainable performance in Canada
  • improving and expanding the departmental CSR website
  • recognizing best practices to enhance CSR skills and human capital for Canadian industry, as well as partnering on at least one initiative to develop a tool for improving the knowledge base and skills of business employees

Responsibility: Strategic Policy Branch  CSR website

Expected Three-Year Result

  • Expanded operation of CSR business-oriented approaches within a competitive Canadian marketplace

Performance Indicators

  • Level of corporate responsibility and sustainability reporting by Canadian industry
  • Conclusions from national progress reports on CSR performance by industry
  • Recognition of best CSR practices within industry sectors
  • Number of visits to the CSR website

Industry Canada is committed to helping industry make CSR more mainstream in order to better enable businesses to be strategic and competitive in the production and distribution of products and services. Expanded CSR information can improve economic efficiency by enhancing business knowledge capacity to take advantage of CSR-business-oriented approaches and increase business performance. Increased strategic support for Canadian firms can help raise productivity and competitiveness. CSR-oriented firms can become more sustainable in markets where social and environmental challenges are changing rapidly.

Contributions Program for Non-Profit Consumer and Voluntary Organizations

The Contributions Program for Non-Profit Consumer and Voluntary Organizations, administered by Industry Canada's Office of Consumer Affairs, has been an important source of support for Canadian consumer groups for a number of years. The goal of the program is to strengthen the consumer's role in the marketplace through the promotion of timely and sound research and analysis, and the financial self-sufficiency of consumer and voluntary organizations.

Two types of funding are available under the program: research project contributions and development project contributions. The total budget is $1 690 000 in 2006-07, of which up to $300 000 can be awarded for development project contributions. The number and nature of projects, consumer organizations and contribution amounts vary annually, based on a competitive submissions process. Priority areas for project contributions include issues associated with the "sustainable consumer."

Action Plan Item

Industry Canada will make financial support available to non-profit consumer and voluntary organizations for research and analysis on consumer issues that affect the marketplace, including the environment and sustainable consumption.

Responsibility: Office of Consumer Affairs

Expected Three-Year Results

  • Increased interest in sustainable consumption issues by non-governmental organizations (NGOs)
  • Increased research performed by NGOs on sustainable consumption

Performance Indicators

  • Number of sustainable consumption research projects submitted through the contributions program
  • Number of NGOs that submit sustainable consumption research projects through the contributions program
  • Number of final research reports
  • Number of visits to the research abstracts in Industry Canada's Consumer Research Database

Consumers and Sustainability Policy Research

Consumer behaviour and preferences can have a significant effect on the activities of businesses. Specifically, the choice to consume certain products and services and to adopt certain lifestyles can have positive and negative economic, environmental and social repercussions, which in turn present opportunities and challenges for firms.

Industry Canada will perform policy research on consumers and sustainability. The research will aim to elevate the level of understanding of third-party sustainable consumption recognition, and will enhance the visibility of best practices in the sustainable development field by companies, NGOs and consumers. This increased knowledge of consumers' preferences and behaviours will help to raise the competitiveness of Canadian firms by boosting R&D and positioning businesses ahead of the curve, as they seek to develop new sustainable products and services to satisfy evolving demand.

Action Plan Item

Industry Canada will undertake policy research on consumers and sustainability. This may include, for example, examination of industry sector best practices in relation to consumers and sustainability, and examination of third-party recognition for sustainability claims related to consumer goods and services.

Responsibility:  Office of Consumer Affairs

Expected Three-Year Result

  • Enhanced understanding at Industry Canada of consumers and sustainability

Performance Indicators

  • Amount of post-research findings on Industry Canada's research database
  • Number of visits and downloads to the research database website
  • Number of announcements of the study findings in Industry Canada newsletters