Productivity gains can be achieved through corporate social responsibility activities, particularly when it comes to anticipating government action. CSR does not mean conservation for the sake of conservation; it also recognizes that today’s conservation measure is tomorrow’s (potentially) costly regulation. Businesses that anticipate tomorrow’s regulatory reforms can adjust to a new playing field more easily, thus increasing productivity in the name of competition and profit.
For example, the day will soon come when businesses are charged a market price for water they use from public systems. The business that waits too long to build conservation techniques into their systems will suddenly bear accelerated costs for updating their system, lose productivity during that refit and have decreased productivity in the short to medium term. The business that anticipated this new cost will have amortized the costs over the long term, adjusted to the conservation and fine-tuned the efficiency of their water system while their competition is left high and dry.
Moreover, claims that conservation amounts to cost savings, rather than additional costs, are sometimes disbelieved by those for whom high productivity is more science than platitude. Such claims get tested in advance, though, by the company engaging in CSR conservation methods. As such, the business practicing CSR realizes greater productivity well in advance of a new conservation regulation by the government.
Interestingly, this affords particular opportunities for Canada, Ontario and Quebec, in particular. Those provinces are highly regulated, provincially and, of course, federally. Multinationals with operations in those provinces may find a silver lining in these tougher regulations: the companies can test productivity gains in these jurisdictions finding the best efficiencies borne out of necessity. Within Canada these regulations may see little competitive advantage, but globally a multinational can engage in CSR practices in those jurisdictions where the equivalent of the Canadian regulation is not yet in place. As such, if the Canadian regulation is particularly costly, operations adjustments might not be used in other jurisdictions until necessary. However, the multinational with Canadian operations will be prepared for that regulation when it does arrive, and can rightly assert CSR practices along the way, even though it is by necessity in the Canadian jurisdiction.
Leaving aside these more general CSR advantages, the capacity to predict future government activity is essential to any highly competitive business. Depending on the anticipated regulation, a company may expend resources lobbying against the change, or may put a modified version of the potential cost in its operations to begin the process of finding the ideal efficiencies through pre-compliance testing. The bottom line is that insight into a government’s thinking is always powerful intelligence for a business. Businesses that wring their hands over the volatility of government policy may simply lack insight into how government works. It is rare for government action to be totally unanticipated. The very nature of these democratic institutions is that transparency exists for government decision-makers at a level unlike the private sector. The system is far from perfect, to be sure, but the clues are all there for the taking by those familiar with public sector practices.
Every business deserves access to that information, but few companies undertake the relatively small effort to gather that intelligence. Corporate social responsibility practices institutionalize that intelligence-gathering activity and represents smart, if not necessary, risk management. The old political adage that information plus knowledge equals power applies equally outside the public sector. The power of productivity arises for companies accessing that information and knowledge that comes from the services offered to clients by Ogilvy Renault.
All of the foregoing applies with even greater necessity on the subject of aboriginal people, politics and law. This is a highly specialized knowledge subset within public sector relations. CSR practices must incorporate some policies and practices with respect to First Nations, Métis and Inuit people, as they represent players with special legal status and potentially unpredictable activities, in the face of their own economic challenges.
Ogilvy Renault is unrivalled, nationally, on this front. We have access to aboriginal decision-makers and communities, as well as relationships with government actors working in aboriginal affairs. Those companies with any operations that touch northern Canada, or near traditional tribal territory, undertakes unacceptably high risks if there is not a solid CSR component focussing on aboriginal affairs. This is relationship-building with potential risks that can create a huge competitive advantage for businesses. Turn this wild card into an opportunity by ensuring that your business’ CSR practices include aboriginal interests.