– Is corporate social responsibility a public relations exercise? Is it a nice thing to ascribe to and at the same time, easy to sluff off? The answer is a combination of yes and no. On the surface it’s easy to say your company believes in supporting and contributing to the
community as a whole. The cost of a CSR program, however, poses a challenge for
the keepers of the money who frequently question the value. Accountants and financial
officers are asked to look at everything as
a return on investment. And in so doing, determine
if a responsibility program is beyond the company’s budget. Well, that may have been the
traditional line of thinking, it no longer applies. It alienates staff who are demanding that the work they do contribute to the whole of society, rather
than just the bottom line. According to a MIT Sloan
Management Review entitled, Using Corporate Responsibility
to Win the War for Talent, employers with a CSR program enjoyed greater employee
satisfaction and retention. Employees, customers, and investors are all taking CSR programs into account when they sign on, when they
purchase, and when they invest. We invited Kim Thompson of Aviso Wealth to join us for a conversation that matters about why corporate social responsibility needs to be a part of every company’s mission statement and practices. – [Announcer] Conversations That Matter is a partner program for
the Center for Dialogue at Simon Fraser University. The production for this
program is made possible thanks to the support of the following and viewers like you. – Welcome. So, corporate social responsibility, it’s a very interesting topic, what is it, how do we
measure, why is it important? If I’m an investor, do I want
to be investing in companies that pay attention to this? You, of course, pay a lot
of attention to it because you are looking at
those kinds of companies to say, well, these are the organizations that we want to invest money in. Let’s start off with
the definition of what corporate social responsibility really is. – It is actually putting in place a program within your organization that speaks to the cause of how are you going to align yourself and making a difference in your community. And then how are you going
to assess your success within that program. And it does need to align
to the corporate culture, there’s no sense in having a corporate social responsibility program that’s not aligned with
what is important to the employee base of your organization, otherwise you’re gonna lose the benefits of having that program in place. How grand or significant
or complicated or complex does it have to be before
it actually qualifies as corporate social responsibility? – It’s probably some reflection of the size of the organization
that you are, obviously, and that there are various
programs out there that you can align yourself to to sort
of make declarations around the effectiveness of your corporate social or your CSR programs. But it doesn’t need to be
terribly sophisticated I think in keeping with, obviously, what are the goals of the organization and making sure that it’s
aligned to those goals. Interestingly enough, a lot of
organizations will think that a CSR program is a function
of just donating money. – Right – And that’s where I think that it definitely needs to be more than that. It’s not just a reallocation
of corporate resources, financially, into other organizations. Obviously, that’s an important component but moreover I think where you start to actually make an impact
with your employee base is when you are engaging
them in that program. Things like building programs together that then you take out into the community. And providing volunteer opportunity for them to be engaged
in their communities and not just on their own time, but probably more importantly,
on the corporate time so that it’s not just a financial giving but it’s a resource giving as well. – That’s a pretty big commitment, there’s a fellow that
I work with who says, “It’s not really value until
it’s gonna cost you something.” and there must be an awful lot of people who look at this and go, okay well, as an overriding statement of
value, yes, I believe in that, but when it comes down to
actually spending the money it’s gotta be challenging for
some organizations to say, okay, I’m gonna take these
people out of there day to day, I’m gonna have them commit to this, it’s gonna cost us money, both
in paying them their salary and whatever other resources,
materials, we bring to whatever it is that we’re doing. – Right, no doubt there
does need to be sort of a legitimately cost perspective
that needs to be evaluated as part of your CSR program but I think if you only look at it from
a pure financial perspective you might lose the benefits of the program which I would argue could indirectly also impact your financial results and I think certainly if you
look at organizations that have discipline and well grounded CSR programs you will see a direct
connection to them having stronger financial performance. And it comes through the
engagement of the employee base. – So I just gotta get you
to hang on for a second while we take a quick commercial break. We’ll be right back. – [Announcer] Conversations That Matter is a not for profit program made possible thanks to the charitable
support of the following and from viewers like you. Please visit ConversationsthatMatter.tv and help us to continue
to produce this program. – Okay so when you are
looking at an organization to put your client’s money into, what are some of the criteria
around CSR that matter to you and how do you then go about
determining whether or not it’s a stated objective or whether or not it’s a realized one within that company? – Well, there are some methodologies, methodologies in which you
would assess a CSR program if that’s part of your sort
of screenings, if you will, on your responsible investing focus. If ensuring, in one of
your screens is to ensure that you are investing in
CSR recognized organizations, it would be a combination
of the percentage of their financials and of their dollars that they’re actually
allocating into the program. It’s not just a donation perspective, but also equally important is the cost of the allocation of the resources. So there would be sort of a criteria that we would look for that
are they meeting that objective and is that then define them as having a strong and a
grounded CSR program. – Are there international
standards that are set? Let’s say there’s somebody
who’s watching this saying, okay, well we’ve gotta get into this and they are a corporation and
they’re looking at their own CSR program or to implement one. Are there standards that
they can go and say, well, there’s the template that I can refer to that says
these are the components of an effective CSR program that you need to put in place to actually qualify to be able to say yes, we are doing this? – There are standards,
there are organizations that if you meet their objectives you can then make declarations around your
positioning of a CSR program. – So by extension, if you have a corporate social responsibility
program does that make you an ethical organization,
because we hear about ethical investing, does one necessarily mean you’re the other? (both laughing) – Yeah, now we’re getting into
a whole different definition. Ethical investing obviously
has a broader perspective that really takes into the ESG and the responsible investing
enterprise, if you will. CSR could very well be a component of that but there’s a very sort of, continuum of what’s considered
to be responsible investing and it’s defined by a
multitude of different things, being how you’re screening
out various companies within those investment
portfolios depending on whatever criteria that might be deemed a component of that investment objective. – So when you look at companies after you’ve gone through a review process and you say, yeah they
really do have a bonafide corporate social responsibility program, how do they perform? Because as we’ve already mentioned, they are investing in something that doesn’t necessarily go
directly to their bottom line. – There’s strong evidence
that would suggest that if you have a CSR program that resonates with your employee base that you’re going to see an increase in your employee engagement. And any time you see an increase
in your employee engagement and you’re employee production you’re absolutely gonna
see a direct connection to the enhancement in
your financial results. It’s not to suggest though,
that all you need to do is go out and put a CSR program in place and you will instantly then have better results financially. Obviously it has to be much
more thoughtful than that. It definitely needs to
have some connection into what’s important to your employee base and who are you as an organization and how do you want to
present into the community. At Aviso we have spent a lot
of time and effort focusing on where do we believe we
can make a difference and Kids at Risk has been
an area that we focused on, but that wasn’t something that the CEO and executive
team sat around the table and decided that that
would be a worthy cause, it was definitely through engagement and conversations with our
employees to make sure that where we wanted to spend our efforts and our resources is something that they could relate to as well and that’s really, really critical because to have a CSR
program that’s been dreamt up by the executive team and
pushed out to the organization, in fact, if it’s not done
through that engagement with the employees you might also find that it could also create
some animosity, if you will, internally that it’s not where they want to see their efforts or their resources. – This is our second break,
we’ll be back in a moment. – [Announcer] Conversations That Matter is a not for profit program made possible thanks to the charitable
support of the following and from viewers like you. Please visit ConversationsThatMatter.tv and help us to continue
to produce this program. – What was the process that
you went through to develop this Kids at Risk program
that you now support through your own employee engagement? – So, we have a
sub-committee, if you will, that has all levels of the
organization that participate on so it would’ve been through
conversations with them. We did believe, again, for
an organization of our size, that we wanted to make sure
that we had some clarity in how we were focusing our
efforts in our CSR program. And so through those
conversations with our staff that’s where the decision was made that we would definitely focus
on a Kids at Risk profile. And so we do that in a
number of different ways, most recently we just, we
run in conjunction with, here in Vancouver, the Kid Safe program, we run a financial literacy camp. The building of the program
was done by the employees, it wasn’t, again, a program
that we bought of a shelf and then launched out
to the Kid Safe group. But it was something
that we built from within and so we had other, we
had employees participate in the building of that program and that in itself, just the
formulation of the program, is very engaging and it really
connects with the employees. – What’s the benefit to
your employee culture, your corporate culture
in having done this? – I think that the employee culture, you’ve probably run
other sessions on this, but certainly when you look at, and this isn’t exclusive to millennials, but certainly when you look at younger cohorts in the
business environment today, they have a very strong connection to the why of the organization. And the why isn’t always just around the profits of the organization, but moreover, how are
you making a difference in the world today. So that sounds rather grand, but in itself it’s very important that
employees do believe that, are a part of your why and
you can articulate your why. And so this, working with Kids at Risk, personally, I have found it’s, we go through our day to days at work and they’re long days
and good and bad days, but when you have that opportunity to step outside of that day
to day grind, if you will, and be in the community and
you’re delivering a component of expertise, if you will,
and seeing that impact, I have no idea about
the longer term impact, but working with those kids, those are moments in time
you will never forget. And that’s the pull to the organization because you know your
organization committed to making a difference in it’s community. – Well I’m happy to hear
that you do that because if you’re also evaluating
other companies to say is this gonna be a good
investment opportunity, what’s there corporate social
responsibility program, you need to be able to measure it against your own efforts to do the same. Do we, as individuals, as investors, need to be having that same
kind of mindset as well? Yes, I want to make money by investing and getting behind these companies, but what is it that I also
can do to contribute to helping to improve the
environment that we live in or even far off environments? – Absolutely, and we’re certainly seeing the responsible investing move in a much more meaningful way to the retail investor, if you will. On the institutional side I think it’s been a part of their programs for perhaps a little bit longer. But we are seeing definitely
folks wanting to ensure that they’re investing,
through their investments, which is another way that
you can make a difference, but you’re ensuring that
your investments are also are helping make a difference
in the organization. And so there is a continuum
of what that looks like. And that’s very much a
personal perspective on what components of the screening
of those firms looks like, but we are seeing many
more retail investors wanting to take a position with their investible assets in how their money is making
a difference in the world. – And is it making a difference? Is it making a difference
within the financial community? Because a lot of people will look at that financial community and go, well it’s all just about
dollars, making money. But is this mindset around investing in companies that at least are
making contributions through their own responsible programs? Is the investment
community exerting pressure on those companies that
want to attract investors? – Well absolutely, there’s certainly different methodologies in applying your evaluation of a firm through simple stock
screening, if you will, that, again, different disciplines, but also being an advocate and actually taking a
position with a company as you invest your money. At the executive level we’re seeing much more of that taking place. So overall, this is not a fad, it’s not a trend, I think it is, it’s a function of who
we are as an industry and who we are globally and that people wanna stand
up and take a position and make sure that their money is working to make a
difference in the world. – Third and final break,
we’ll be right back, I promise, we’ll be right back. – [Announcer] Conversations That Matter is a not for profit program made possible thanks to the charitable
support of the following and from viewers like you. Please visit ConversationsThatMatter.tv and help us to continue
to produce this program. – So when your research team goes out to determine whether or
not they want to recommend investment in a particular company, has this become a significant
part of their assessment of a potential opportunity? – Well certainly we do
have a very robust RI team that evaluates against whatever
the investment objective is of the investment and
ensuring that the organization would have a CSR program
would be a component of it because it’s in keeping with that company. But it wouldn’t be the only
aspect that they would look at. – No, of course not, yeah, because you still wanna
make a sound investment. – Well, that’s right, but
certainly ensuring that they, ’cause again, if you’re declaring
yourself to be one thing but then your corporate
social responsibility program, if you don’t have one or you’re
certainly not engaging in it then you have to certainly
assess that against the merits of the investment of the organization. – Well it starts to talk about the integrity of the management
team as well, doesn’t it. – Exactly, yeah, that’s my point. (both laughing) – But it adds another dimension
to the whole process of, not only the work that you do, your own teams commitment
towards being social responsible but then the way it
extends out to all of us. Do we know whether or
not it’s having an impact in changing local environments? Like you talked about Kids at Risk but are there some
great examples out there that we can point to and
go, there’s an organization that has really made a difference as a result of that corporate
social responsibility. – Well I certainly, and
I’m quite likely biased, but if I could certainly hold out, we work quite intimately
with the credit unions system in Canada, that is our partners. They themselves are very focused on and would also evaluate their ability and how they are actually
making a difference in their communities and so I would certainly suggest that
your local credit union would have a very strong ability and is making a very big
difference in those communities in a multitude of ways. – Well, we had Tamara
Vrooman from Vancity in a couple of years ago and talking about, she said, well we have a
responsibility to people who are relying on payday
loans and they are being taken advantage of. And so they said we are going
to move into that market, where nobody else wants
to, where gonna go there and we’re gonna provide services
that are not gonna be so expensive. And so I do know that
within the credit union community there is an understand of what the cost of poverty is and
so if they can start to work to help alleviate that then
it is making a difference. – That’s right, and I don’t
wanna speak on their behalf because they themselves would be much more credible in speaking
to their own programs, but just the very fact that they’re very focused on ensuring financial sustainable wellbeing for all Canadians. Irrespective of your wealth and your position in your community but understanding that they’re there to vitalize that community, make
a difference in that community and ensuring that they have the ability to financially assist all
aspects of that community. That’s not just a motherhood
apple pie statement, but that is locked and loaded what they do and what they believe in and I admire every aspect of that. – I guess one of the other
things that you look for is how long has their
commitment been in place, how do they keep coming
back or staying with this, that really shows you what
their belief is around the fact that they can make a difference and it reflects the values of the company. – That’s right, and most of them have been doing this for
a very, very long time. And what’s been an interesting
sort of learning for me, I’ve always lived in
major urban centers and so my son plays hockey in a small
community in Saskatchewan and so it’s given me a really good exposure to a small community and I will tell you, the
credit union in that community has a considerable impact
in ensuring that community continues to be vitalized, from
both a business perspective as well as a retail
investor member perspective. – Well, I think this is
a very important issue and type of program for all
organizations to engage in. Thank you very much for coming in and sharing this with us. (upbeat music)