Corporate Social Responsibility Research Initiative

Corporate Social Responsibility Research Initiative
Final Report
November 2013

Executive Summary

Corporate social responsibility (CSR) initiatives are defined as the voluntary activities undertaken by a company, above and beyond regulation, to operate in an economically, socially and environmentally sustainable manner. In March 2009, the Canadian government announced Building the Canadian Advantage: The CSR Strategy for the International Extractive Sector (the Strategy), with the objective of promoting CSR activities by Canadian extractive companies working abroad. As part of the Strategy, the government indicates that it expects Canadian companies to meet high standards of corporate social responsibility.

Mining companies are increasingly searching for and developing resources in developing countries. Some of the challenges that Canadian companies face when working abroad include poor governance, weak institutions, lack of infrastructure, poverty and corruption. In order to deal with some of these challenges, mining companies initiate voluntary activities that attempt to maximize benefits for local communities and host countries while minimizing negative impacts related to mining activities. The nature and extent of companies’ CSR activities will depend on the location of the project, the particular risks and challenges to be faced, and the general context in which the company operates.

Due to the large number of Canadian mining projects around the world, it is impossible for the Government of Canada to keep track of the CSR activities of every company. Furthermore, CSR activities vary not only according to the country in which a company is operating, but also according to the region within that country. No two cases are identical. Researching actual CSR initiatives is therefore a complex and difficult task.

In order to identify the importance of CSR for Canadian mining companies working abroad, Natural Resources Canada’s Minerals and Metals Sector initiated a research initiative that focuses on public company information and CSR-related keywords and phrases found in the reports Canadian mining companies prepare for Securities. Since public company information is based on materiality, reporting of CSR in these documents indicates that the companies consider CSR a material element. Furthermore, reporting false information to Securities is illegal, and companies therefore take care to report accurate information.

The objectives of the research initiative are to develop an approach that measures the reporting activity by the Canadian mining industry operating in developing countries, and to determine trends over time, both before and after the introduction of the CSR Strategy.

The research initiative is based on a sample of 100 projects in countries where Canadian mining companies operate. The focus is mainly on projects located in developing countries, although there are some exceptions, notably Australia. Four research regions—Africa, Latin America, Asia-Oceania and Mexico—were identified, with a selection of projects drawn from each. The projects researched were also divided by company type, namely major, mid-tier and junior mining companies. For each project, reports were searched using a list of themes and keywords.

The results are presented through a series of graphs that show trends for totals by themes and selected keywords for all projects, by company types and by region.  Results include:

  • environmental issues generally have become material facts for mining companies;
  • sustainable development seems to have entered the discourse of mining companies and be considered material;
  • health and safety was an issue of importance for Canadian mining companies throughout the research period;
  • companies are developing internal codes and considering such codes to be material;
  • education and community development were issues of importance to companies’ CSR initiatives;
  • the companies did not often use the keywords in the social theme, the community engagement theme, the performance guidelines, and the human rights theme in the reports searched;
  • mid-tier and major companies report in a similar manner, with the environment theme being the most commonly mentioned, followed by the labour theme;
  • junior companies place importance on reporting on environmental issues—for them, the theme of governance and ethics is much more important than it is for mid-tier or major companies;
  • the most common theme mentioned in all the regions is the environment theme, which has seen a dramatic increase in Africa, a steady increase in Latin America, is constant increase in Asia-Oceania, and had a small increase in Mexico.

Promotion of CSR and of sustainable development seems to be showing results, since the data show that CSR itself is becoming a material issue, with companies increasingly reporting on CSR. Promotion of CSR therefore seems to be an activity that should continue in order for all companies to consider CSR material to their operations. Additional promotion of CSR is most needed by junior companies. The importance of Mexico for Canadian mining companies, and the low number of mentions of CSR and CSR issues by companies working in Mexico, indicates that this country should be the focus of additional efforts.

Finally, given the lack of reporting on standards, it is difficult to assess company awareness of the standards themselves, but considering that the companies report on the issues the standards address, it is possible that companies are using the standards without making specific reference to them.

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