The Globe and Mail's Report on Business magazine unveils Canada's first comprehensive corporate social responsibility ranking tomorrow in the magazine's March issue.
The ranking, compiled by Toronto-based Michael Jantzi Research Associates Inc., identifies the best and the worst among 67 companies in 10 industries, including auto, retail, forestry and technology. The scores were based on detailed evaluations in five categories: community and society, corporate governance, impact on customers, treatment of employees, the environment and human rights.
"People, when they're buying a product or investing, want to make decisions on social and environmental issues," said Michael Jantzi, whose firm provides research to institutional investors. "But there's been very little information for them in an easy-to-find, easy-to-read format."
The technology sector received the best evaluation, while the food distribution industry, including most of Canada's largest supermarket chains, received the worst.
Companies are ranked within sectors, but there is no top-to-bottom ranking of all companies because different indicators were used to evaluate different sectors -- mining companies, for example, have a high level of exposure to environmental issues, while banks have greater exposure to retail customer concerns.
By and large, Mr. Jantzi said, the highest-ranked companies have responded to concerns of activists, shareholders, employees and other stakeholders in recent years, and are now taking the initiative themselves. He said the top performers realize that "paying attention to these issues is not necessarily a cost of doing business, it actually enhances the bottom line."
The poorest performers, on the other hand, are not even "being dragged along" by outside pressure, he said.
But in a week when Conrad Black's control of his business empire hangs on the outcome of a court case over a corporate governance dispute, and food giant George Weston Ltd. has vowed to eliminate trans-fatty acids from its cakes and desserts, that pressure is getting harder to ignore.
One factor Mr. Jantzi finds encouraging is that "improvement in corporate social performance has come at a time when the traditional stick: i.e. the government or regulatory side of things, has diminished."
But companies that are acknowledged leaders on social responsibility issues say they are doing more than fending off protesters or going along with a management fad.
Gordon Lambert, vice-president of sustainable development at Calgary-based Suncor Energy Inc., says the company's huge holdings in Alberta's oil sands helped foster a longer-term view of its operations.
"We have reserves that are in the realm of 60 years of reserve life," Mr. Lambert said. "We think that our prospects of being a sustainable enterprise are enhanced by looking at our economic performance along with environmental performance and social performance."
Still, he said it's hard to quantify the benefits of acting more socially responsible in dollars and cents. "It is a hypothesis," Mr. Lambert said, "but, you know, so far, so good."
One immediate benefit, he said, has been reduced waits for regulatory approvals. Suncor's $3.4- billion Millennium project in the oil sands, for example, was approved after a one-day public hearing, and two other recent projects required no hearings at all because there were no notices of objection.
"The approvals processes are really a test for whether people that are impacted by your operations support what you do or oppose what you do," Mr. Lambert said.
Alcan Inc. is another acknowledged leader in environmental and community initiatives. Daniel Gagnier, Alcan's senior vice-president of corporate and external affairs, said the company has been striving to integrate sustainability into its business model for more than five years.
Much of that has been driven by its 88,000 employees worldwide, and Mr. Gagnier said responsibility initiatives have helped attract and retain talent. "Young people do their research now on the Internet," he said. "They say, 'I want to work for a company that's got the right attributes.' "