Compliance is for Tourists

Corporate social responsibility or “CSR” has grown in scope and influence, particularly with regard to social contracts.

The idea of corporate social responsibility (CSR) has really developed in recent years, not least because of the continued trend in socially responsible investing. A recent WSJ article highlighted a new generation of screening tools that allow investors to dig deeper into a company’s operations and practices to see just how much of their revenue depends, say, on the sale of alcohol products. The individual investor now has the ability to make more nuanced assessments about how a given firm’s values line up with their own.

Reading this piece reminded me of the Women Power session on sustainability at ABB’s Energy and Automation Forum that took place recently in Calgary. I was surprised to hear how much bandwidth the “license to operate” issue took up for the members of the panel. And since this was Canada, much of the issue centered on companies’ working relationships with First Nations (a term I’ve always admired for its precision and implied respect as compared to clumsy US references to “native Americans” or simply “tribes”).

Erin Delorme, Information Management and Technology Manager at Apache, pointed out that it’s the diversity of stakeholder groups—both inside and outside the company—that make the license to operate so challenging to maintain.

“We deal with 18 unique touch points,” she said, from customers to regulators to First Nations and other local residents. The key, said Delorme, is getting everyone into the process at the outset. According to Delorme, sustainability suffered when the company took a more head-down approach that revolved around project schedules.

It’s not limited to community relations, either. Now when Apache starts a new project, she gets the commissioning team in “seven years early.” That allows everyone to get on the same page, but it also affords opportunities to identify problems that, if addressed later, would be far more costly to remedy. The end result might even be the same—project completed, on time—but removing roadblocks and establishing good relationships makes everything proceed much more smoothly.

That was pretty much the same message delivered by Kim Blanchette, Vice President of Public Affairs for the Alberta Energy Regulator (AER). She described a pronounced drop in complaints filed by local residents now that the agency has adopted a more pro-active approach to engaging constituents. The oil sands regulator is also working with the companies it oversees to develop plans cooperatively for an entire play rather than doing it well by well.

Blanchette went on to note that AER’s emphasis on addressing the cumulative impact of oil development projects, rather than on the particular impacts of a single site, has brought the agency’s focus into line with residents’ concerns. This is what I’ll call “applied sustainability” is really all about—aligning interests for the long term.

This goes far beyond simple “compliance,” which just sounds… bad. Think coercive, adversarial relationships.

Instead, take the “corporations are people” meme and turn it on its head. Businesses are viewed as individuals before the law, so why shouldn’t they behave a little more like actual people? Maybe if they did, they’d find it easier to get along with their neighbors.

I’ll step down from my soap box with a reference to something Nathalie Pilon, who heads ABB’s Thomas & Betts business in Canada, said at the Calgary forum. She didn’t frame it as a cautionary tale, but when she noted that sustainability is something that resonates with younger workers, it was easy to read the writing on the wall.

CSR is something to attract and retain talent, and pretty soon it might just be a requirement if you want to be competitive. That, perhaps more than anything, makes it clear that it really has escaped its “compliance” cage.