The Risks And Rewards Of Corporate Social Responsibility

The return on your community investment depends increasingly on what you choose to support

Jan 1, 2010

by Anthony A. Davis

But what does Bell really get from all these efforts? “Internally,” replies Daniels, “it speaks to employee morale; employees feel good about working for a company that supports volunteerism and other CSR strategies…. It’s good from a reputation standpoint for Bell. It’s good to be known as a community leader.”

Despite recessionary pressures, companies interviewed for this article seem determined to maintain their commitment to CSR. “We maintained if not strengthened our commitment to communities in challenging times,” reports Paulette Minard, Toronto-based community affairs manager for the Home Depot Canada. In 2009, Team Depot, as the company’s employee volunteers are called, participated in 170 projects across Canada. That amounted to 21,000 hours of volunteer service, “a huge increase over last year,” says Minard. [spoiler]

This year, Team Depot, as the company’s employee volunteers are called, participated in 170 projects across Canada. That amounted to 21,000 hours of volunteer service, “a huge increase over last year,” says Minard. “We sit back and look at each other and try to figure out why did it differ?”

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Two years ago, Home Depot went to the trouble of setting up its own foundation, a registered charity. “It enables us to increase our investment in communities because we are now able to have a fundraising component to our work, and work with our vendors and customers to raise more money for Canadian communities,” Minard explains. Last year, the foundation raised $1 million from Home Depot vendors and customers. That money will go into national partnerships with Habitat for Humanity, KaBoom (a non-profit that builds playgrounds in underprivileged neighbourhoods) and Evergreen’s Rebuilding Nature Grant program. The last program, for instance, gave $9,000 in combined funding and material and employee support to the African Sudanese Association of Calgary for a community garden project in 2006. [spoiler]

As Dak Nyuon, president of the association, said then, the grant would address issues of poverty, food dependency and social isolation in the rapidly growing community.

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The focus on housing and environment aligns well with what the Home Depot does as a business, says Minard. And it dovetails well with suppliers who don’t have community investment programs of their own, allowing them to get involved through the Home Depot. “KaBoom has a couple of key drivers for us,” explains Minard. “One, they are about building neighbourhoods and providing a safe place to play for kids and families. But they are also fantastic volunteer engagement opportunities for us. A build can involve upwards of 200 volunteers on site. You take a patch of dirt and have a playground six hours later. It also lends well to our definition of what is a sustainable community.”

Home Depot’s corporate culture is heavily driven by what it calls its “Value Wheel,” which expresses company core values, including giving back, doing the right thing, entrepreneurial spirit and building relationships. Local stores have some autonomy to decide where volunteer and community investments go, provided they align with company values and objectives.

But can the Home Depot say that, while its CSR efforts are clearly doing some good for Canadian neighbourhoods and the environment, its investors are getting some kind of return too? [spoiler]

Privately held companies like DIRRT may be able to support some CSR efforts purely out of personal conviction. But publicly held companies have no such luxury.

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A nagging problem with CSR programs is the difficulty of accurately measuring the benefits to the donor company. [spoiler]

“We’d certainly like to be able to draw a stronger correlation between the two,” concedes Minard. “That’s a really challenging thing to measure and I’m sure a lot of people who have my position at companies would wish it was easier.”

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Still, Home Depot is a convert, says Minard. “These programs that we execute help us to build better relationships with our customers….We can’t put it right to the bottom line and absolutely make that correlation, but we absolutely believe that’s absolutely a contributing factor.”

Tips From the Pros

Last year, PricewaterhouseCoopers warned Canadian energy and utility companies in a quarterly report on the sector that, with consumer forces scrutinizing the environmental, social and ethical behaviour of companies like never before, it’s vitally important that corporations develop integrated and strategic corporate social responsibility programs. With that in mind, we asked some CSR experts for their thoughts on what executives should consider as they embark on CSR strategies.

Dani DeBoice, manager, corporate citizenship, First Calgary Savings:

There are always risks when you make any investments, whether it’s in the community or otherwise, and you have to balance those risks. It’s the same with a non-profit aligning themselves with a corporation. They need to make sure that there’s a match in terms of the values and that this is the right partner.
Companies should partner with the types of organizations that know how to handle a crisis in an honest, up-front manner.
Properly vetting charities or non-profits – through their track record, Canada Revenue, annual reports or other documents – is important. But building a personal relationship is even more valuable. “I think you get a better feel for an organization by meeting with the executive director and the team you’ll be working with, and having regular updates.”

Jerilynn Daniels, associate director of community investment for Alberta, Bell Canada:

All companies should have a CSR strategy.
CSR is important for many reasons, including enhancing the company’s reputation, attracting the best and brightest employees and the feeling of doing the right thing.
Bell believes being an outstanding corporate citizen is about using its financial resources and the expertise of its employees to invest in the communities it serves.
CSR is important and part of Bell’s corporate culture. It’s not only the right thing to do, but it’s also beneficial from a business perspective.

Paulette Minard, community affairs manager, the Home Depot Canada:

Make sure your community investment aligns with your business. It must complement the work that you do.
Getting your employees enthused and active in what you do is important because they are ultimately your ambassadors in the community.
Identify people in the company with leadership potential to help take on volunteer projects and generate enthusiasm.
Think about your assets. Don’t try to do more than your company is capable of. In Home Depot’s case, access to building supplies and product donations make a lot of sense.

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