The Impact of Social Responsibility on U.S. Business

OTTAWA—Although Milton Friedman stated in 1970 that "the social responsibility of business is to increase its profits," a new survey reveals that corporations would actually make more money by being socially responsible.They would also profit in terms of talent recruitment, according to a national poll conducted on Tuesday at Ottawa's Algonquin College for the Corporate and Community Social Responsibility Conference. extra than 60% of Canadians asked stated they would pay extra for a $100 product or service if it came from a socially responsible firm.

Women would spend more on average than males ($10.11 vs. $7.03), while younger Canadians would spend more than older Canadians.

Those aged 18 to 29 would spend $11.88 more on average. Furthermore, one in every two people stated they would be willing to work for a socially responsible company even if it meant sacrificing money. The average cut they stated they would tolerate was 4.8%. Eight percent would be willing to accept more than a 10% pay cut. Importance of connectivity and information. Speaking at the Ottawa conference, Barbara McInnes, president and CEO of the Community Foundation of Ottawa, stated that philanthropic organizations like her foundation are noticing that "when people talk about making positive change or tackling wicked societal problems, they're no longer looking for leadership." "It's 'connectorship' they're after," Ms. McInnes said, adding that today's most effective firms understand the value of connectivity and how to build powerful relationships. "Enhanced disclosure would give investors better insight as to the long-term viability of theinvestment," said Laurel Broten, Ontario's Minister of Children and Youth Services and Minister Responsible for Women's Issues. "Today's investors seek more than simply minimal financial disclosure. They want to know where a firm gets its materials, how it respects the environment, if it is a good neighbour to the community, and how its actions compare to those of its competitors." In April 2009, Ms. Broten introduced a resolution that was unanimously supported by the provincial assembly, prompting the Ontario Securities Commission to investigate Ontario firms' reporting criteria.

"Each of us individually can start to have quite a significant impact if we think through what we are buying and who we're doing business with," Mrs.

‘Sustainable Profits’ Sophie L'Hélias, Senior Fellow at the Samuel Heyman Center on Corporate Governance at the Cardozo School of Law in New York and the Telfer School of Management at the University of Ottawa, proposed looking at corporate social responsibility (CSR) through the lenses of governance and risk. "The new risk that we're facing today is environmental and social risk," Ms. L'Hélias explained Noting that "the ultimate guardians of a corporation are the investors," she said that as the public—the investors—becomes more concerned about these issues, "we're seeing a number of pension funds, also religious funds, environmental funds, and even hedge funds, go against companies that are not doing the right thing." While Milton Friedman discussed profits, he did not discuss "sustainable profits," according to Ms. L'Hélias. She stated that this is something pension funds require. "As the population ages and people need to get pensions, we require long-term earnings. "We can't keep going through these boom and bust cycles," she remarked. "So sustainability is also the notion of the new economic model for businesses." Legislative Response To CSR Liberal MP John McKay discussed Bill C-300, a private member's bill aimed at improving business practices that was just defeated by six votes on third reading.

The bill would have forced Canadian corporations doing mining, oil, and gas operations abroad to follow rules that incorporate numerous international CSR laws.

Speaking on the necessity for a legislative response to CSR rather than a voluntary approach, Mr. McKay stated that his bill attracted significant worldwide attention and that he had conducted "well over 100 interviews." His Facebook profile had nearly 40,000 views from 109 countries, he said. "There's been a huge evolution in terms of where we are, and no doubt there's been lots of issues with some companies out there as well," said Ross Gallinger, Senior Vice President, Health, Safety, and Sustainability of IAMGOLD Corporation, in response to an audience question concerning the bill. "Things on the ground are very complicated at times... and people do make mistakes," he added, stressing that IAMGOLD has been working with governments in countries where it operates to strengthen their capacity to deal with these situations legally He went on to say that McKay's plan had implications for competition and "would not have allowed us to acquire operations that had problems associated with them, and wouldn't have allowed us to bring our expertise to try to fix those problems." OTTAWA—Although Milton Friedman stated in 1970 that "the social responsibility of business is to increase its profits," a new survey reveals that corporations would actually make more money by being socially responsible. They would also profit in terms of talent recruitment, according to a national poll conducted on Tuesday at Ottawa's Algonquin College for the Corporate and Community Social Responsibility Conference.