The Risks And Rewards Of Corporate Social Responsibility
The return on your community investment depends increasingly on what you choose to support
by Anthony A. Davis
The Sudan debacle, acknowledges Reg Manhas, Talisman’s vice-president of corporate affairs, primed Talisman’s extensive rethinking of its corporate citizenship, a new model he suggests “seems to have put us in a fairly strong position of global leadership. [spoiler]
“To the company’s credit, Jim Buckee our former CEO and (current CEO) John Manzoni and the board of directors have been consistent in supporting these issues as long as I’ve been a member of the company.
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Right from the highest levels of the company, there’s been a strong recognition that if the company is to continue working on its exploration strategy and working in challenging parts of the world, [CSR] is something you not only have to have core competencies on, but you have to be leading-edge.”
Without its new approach, Manhas doubts Talisman would be operating in northern Iraq, for example. There, Talisman broke new ground among international resource companies by insisting a $220-million payment it made to the Kurdistan regional government in exchange for exploration rights to be made publicly transparent. With such a large payment to a shaky government in a war-torn region, “One of our biggest concerns both from our group, the management and the board was that money could be used for the wrong reasons,” says Manhas. “That could end up in a tough situation for us from a reputation perspective if the money got spent on weapons or a corrupt purpose.”
Talisman also “hard-wired” into its contract the requirement that the $220 million be used only for capacity building and infrastructure purposes in Talisman’s area of operation. While Manhas acknowledges there’s no absolute guarantee the Kurds won’t buy Kalashnikovs, “I think the company has gone as far as it could go in terms of ensuring the money gets spent in the way it should and that it’s made transparent.” That’s CSR that is helping Talisman put Sudan behind it. [spoiler]
Elsewhere in the world, Talisman’s CSR approach can look very different. In developing world regions where it operates, Talisman works with indigenous communities near its exploration activities, concentrating on basic health-care development, fresh water provisions and small business microcredit loans. In the Peruvian basin, Talisman purchased and built river boats, then provided riverboat navigation and training for locals. The boats were then contracted to provide transport services to Talisman and its subcontractors. “That’s a way that we built capacity in the community, such that even if we aren’t there for the long term, depending on how the exploration program worked, we’ll have left something tangible in the community that they can hopefully leverage and use to generate income going forward.”
Talisman has made CSR a priority in its operations. It plans to continue despite recessionary pressures. “There’s no question there is a strong business case for it,” insists Manhas. “Being able to work with ethical funds like Michael Jantzi and Ethical Funds Group out of Vancouver are strong drivers of performance.” A credible CSR program is also a factor in gaining Talisman Canadian government support in its operations abroad.
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Yet so far in the oilpatch, Talisman is part of a small faction that has fully injected CSR into its DNA. In a 2009 first-quarter survey update on the energy and utilities sector titled Natural Selection: Evolution of Sustainable Companies, PricewaterhouseCoopers reported that only 12% of companies saw CSR as critical to sustaining future growth. [spoiler]
Rather, 68% said attracting and retaining key talent was most important to them, and 67% said access to capital and credit was most important (multiple answers were permitted).
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PwC warned that, with growing public attention on the environmental and human impacts of energy development, it’s now more important than ever for the country’s energy companies to develop strategic and integrated CSR policies.
That’s already the case at more consumer-focused companies. When I speak to her, Jerilynn Daniels, Bell Canada’s associate director of community investment for Alberta, is clearly pooped. She’s just finished co-ordinating a crew of 50 Bell employees who volunteered to remodel the dining room and other areas at Inn from the Cold’s recently purchased, century-old Emergency Family Shelter. What Daniels had expected to be one day of work – painting walls and installing flooring, Internet cabling and desks so families could use 20 laptop computers Bell had donated – had stretched into four. Daniels sounds worn but pleased. It’s part of Bell’s involvement in United Way’s Day of Caring program in Calgary. Across the country, Bell employees donated 440,000 hours to various programs last year.
The telecom giant uses software that has been developed by Canadian consultancy GrantStream to process funding proposals for large corporations.
It helps weed out charities and non-profits that don’t align with the objectives Bell has set for its community investments, which focus on youth education and health. “It’s a fairly rigorous process for funding,” Daniels explains. “A lot of questions are asked: What’s the project for? How is funding broken out? Who else are your partners? I don’t want to give the impression that you have to get through Fort Knox, but due diligence is done.”
For Bell, CSR isn’t about showing up competitors. “Doing those [charitable] sorts of activities are good, not just for the charity, but for the benefits that come to the corporation,” says Daniels, explaining the Inn from the Cold projects built rapport among Bell’s 630 employees in Calgary who don’t always get to see one another in the workplace. “And we just feel it’s good to give back,” she says, explaining one of the reasons Bell, as part of its CSR, also invests in things such as a country-wide blue box recycling program at Bell Mobility Centres. The program collects used telecommunications devices and batteries, donating a dollar for each device to the World Wildlife Fund. On top of that, Bell has many initiatives aimed at environmental sustainability. [spoiler]
Bell has been trying to reduce its carbon emissions by using its own teleconferencing technology to reduce employee travel for meetings. Three new offices, including one in Calgary, were built to LEED-certified higher environmental standards and located purposely close to public transit systems. Bell requires its cleaning crews to work during the day, instead of using lights at night, cutting down on electricity use. And, says Daniels, Bell does its best to screen its supply chain for best environmental and employee practices. “At the end of the day CSR isn’t about writing cheques.”
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