Values-driven business is key to competitive advantage
CANADA’S INTERNATIONAL REPUTATION AS AN HONEST AND TRUSTWORTHY PARTNER that cares about good governance, social justice and sustainability carries considerable weight in a world struggling to cope with mounting economic and environmental challenges.
Yet many Canadian companies still don’t appreciate the competitive advantage they could gain by embracing the type of values that have elevated Canada’s standing on the global stage, says Leor Rotchild, executive director of Canadian Business for Social Responsibility (CBSR).
“When it comes to business, Canada seems confused about what values we all share and what we aspire to,” he says. “Too often, we Canadians define ourselves by what we are not. What we need is a coherent set of Canadian business values. Being good enough isn’t just about competency; it’s also about decency – and the great news is that, as Canadians, we have this within us.”
CBSR believes the values that should underpin Canadian business are collaboration, eco-consciousness, ethics, gender balance, global-mindedness, inclusivity, innovation and purpose driven, which are the types of values that boost Canada’s international image time after time in global surveys.
For example, a 2017 Globescan/PPC survey of 18,000 people in 19 countries asked respondents to rate 16 countries and the European Union on whether their influence in the world is “mostly positive” or “mostly negative.” Canada was ranked number one above Germany, Japan, France and the UK. By comparison, the U.S. came in at number 12.
While Canada has slipped from its higher ranking in previous years, it is still considered to be one of the world’s most reputable countries, coming in at seventh in 2018 behind Sweden, Finland, Switzerland, Norway, New Zealand and Australia in the Reputation Institute (RI) annual survey, which bases its rankings on factors such as how welcoming, safe, beautiful, principled and ethical a country is.
But apparently Canadians don’t see those values reflected to the same extent in local companies. The 2018 RI ranking of firms operating in Canada asked 27,000 individuals to rank companies on products and services, innovation, workplace, governance, citizenship, leadership and financial performance.
The top four – Google, LEGO, Rolex and Nintendo – are foreign firms, and only four of the top 20 – MEC (Mountain Equipment Co-op), Jean Coutu Pharmacy, Canadian Tire and Shoppers Drug Mart – are Canadian.
RI also found the willingness of Canadians to trust business dropped by a significant nine points from 2017 to 2018 due to volatility in perceptions of corporations and concern that companies were not living up to their stated values.
However, RI found Canada’s most reputable companies bucked the downward trend in consumer trust through their social responsibility activities.
Stéphane Glorieux, president, Keurig Canada, says consumers – and millennials in particular – are transforming the way companies communicate, sell and engage.
“As a demographic, they are more likely to consider socially responsible and environmentally friendly products, which creates a business imperative,” he adds. “And they are influencing other generations to do likewise.”
At the same time, there has been a shift in how organizations think about and incorporate inclusive, ethical and environmental strategies into their business planning and operations, says Mr. Glorieux, noting that businesses are realizing they have the presence and power to positively impact the environment, communities and partners, while generating business, social and environmental benefits.
“At Keurig, we are committed to doing more than what’s expected of us, and we’ve worked to integrate social responsibility into all aspects of our business, so it’s ingrained in everything we do – from improving the lives of coffee farmers to caring for our Earth and local communities. And we partner with organizations that share our vision, because together we can accomplish more,” he says.
For example, this year, through our company’s Let’s Play initiative we’ll partner with a community organization in Montreal to build a playground in an underserved area in great need of quality installations for youth. By doing so, not only are we helping strengthen the community’s social fabric, we’re also creating a space where families can thrive,” he says.
Robert Fosco, vice-president, corporate sustainability and responsibility at Export Development Canada (EDC), says showing leadership in social responsibility can be a big advantage for Canadian companies operating overseas.
“When we think about Canadian values, we think about qualities like trust, integrity, ethics, diversity and hard work. These are all part of Canada’s brand, and Canadian companies do best when they leverage that brand when they do business globally,” he says.
While Canadian companies need to be careful when operating in jurisdictions where business standards and practices are different from at home, they can still find opportunities to lead by example, adds Mr. Fosco.
“International business is evolving rapidly, and companies everywhere are realizing that sustainable and responsible practices are good for the bottom line,” he says. “Research shows that companies that embed sustainable and responsible business early on tend to outperform those that don’t. More and more, our investors, customers, employees and shareholders are demanding that companies meet the highest standards of social responsibility – and I think companies are getting the message.
MEC CEO David Labistour says while many Canadians believe Canadian companies are global role models for best business practices based on the country’s reputation as a fair and honest broker in world affairs, the reality is more complex.
Canadian companies simply don’t have the global muscle to significantly influence challenges like climate change, he says, and their good business practices at home and abroad are often driven more by legislation, such as fair employment laws and environmental protection standards, than ethical commitment.
Canadian companies need to take a more pragmatic view of what it means to do business based on Canadian values.
Mr. Rotchild says MEC is a good example of a company applying Canadian values to its business, pointing out that it has established strategic, long-term relationships with outdoor-related non-profit partners such as Leave No Trace Canada, through which MEC encourages staff to become master educators and train people on responsible outdoor recreation.
“We need more companies to take bold action and champion the adoption of Canadian business values,” he adds. “CBSR is bringing together a national network of Canadian leaders, and through greater collaboration, we can make business a more competitive force for good.”