Companies aren’t required by law to adhere to international corporate social responsibility standards. But according to Avril Cole, an attorney with Norton Rose Canada, adopting CSR standards could help companies with operations in emerging economies reduce their risk of failure, Corporate Underwriter reports.
CSR standards could give companies in emerging economies a competitive advantage, Cole said this week during a seminar in Toronto. CSR standards help companies assess the environmental and social impacts of their operations on local communities.
Cole said that international mining companies seem to be particularly active in adopting CSR. But companies in any industry can adopt them, she added.
Some 72 percent of companies now have formal corporate responsibility programs, up from 62 percent in 2010, according to the annual CR Best Practices Survey released in December by Corporate Responsibility Magazine. Despite the rise, the survey found mid-sized firms trail small and larger companies in the adoption of CSR programs.
Cole said that stakeholder engagement provides valuable intelligence about a company’s political risks, and successful analysis of that information can effectively counterbalance the risks. Companies can build goodwill and avoid political issues that can threaten their business by working with local communities.
Even companies without direct operations in emerging economies can have an impact in those developing countries. Environmental sustainability is increasingly a key factor in supply-chain decisions, according to a Jones Lang LaSalle survey released Monday. In the survey, more than 70 percent of JLL procurement managers surveyed said they see the importance of green products and services. And yet only 13 percent were able to point to company programs that recognize vendors for improving their carbon footprint, energy efficiency or environmental performance.