Tyler Elm had an interview with Canadian Tire in 2008 and he gave them the vision that there’s money to be made in environmental sustainability. At first they thought: ‘Why should we care about environmental sustainability?’. But Elm explained to them that for example excessive packaging is a waste of paper, plastic and money. He said that a smaller package reduces waste and unit size, therefore meaning more products per shipping, translating in lower shipping costs. His idea to make a smaller package led to a 15 per cent cost reduction in the shipment of that product.
Elm is now Canadian Tire’s Vice President of corporate strategy and business sustainability. He sees sustainability as a business strategy and tailored that concept to their for-profit mandate. He and his team have thought of many ways to reduce costs by thinking of sustainable ways to make business. They discovered that changing the position of overhead lights could reduce energy use by up to 25 per cent. And they also discovered that a white roof, reflecting light and retaining less heat, leads to savings on air conditioning costs in the summer.
So they are improving the company’s environmental records, and they are making money. The best win-win situation! And Canadian Tire is just one example of a company that is using this win-win situation. There are a lot of other large and small companies that have rallied under the banner of corporate social responsibility (CSR). This CSR stands for businesses having a moral conscience on social issues and a concern for the needs of the future generation when it comes to the environment.
Ford Motor Company is probably not the first company that you think about when you think about sustainability. This is because they used to be famous for their heavy-dusted, gas-guzzling pickup trucks. But nowadays they get associated with their line of fuel-efficient motors, their EcoBoost-branded engines and the all-electric Focus.
Stephanie Janczak, Ford’s manager of electric vehicle infrastructure and policy, says that about a decade ago, the company started looking into designing hybrid vehicles and electric vehicles. This is because they felt that there was demand for this and they could earn a lot of money. They want a quarter their global fleet of vehicles to be electric by 2020.
Tima Bansal, executive director of the Network for Business Sustainability at Western University’s Richard Ivey School if Business, will soon release a study. The study claims that for companies to survive on the long-term, they need CSR. She tracked the progress of 211 companies that are socially and environmentally responsible and have been since the early 1990. And she compared these companies with an equal number of companies that aren’t identified as responsible. She came to the conclusion that companies with a decent CSR are more likely to survive.
Heather Lang, director of research products with Sustainalytics, notes that consumers become more and more aware of the product that they buy. They start demanding safer, healthier and sustainable products. And she said that it can be up to consumers to demand social and environmental issues to companies.
In 2004, clothing company the Gap was seeing consumer backlashes worldwide after it came out that their supplier factories in the developing world were using child labour. Consumers couldn’t abide by this and they started boycotts so the Gap would cut ties with this supplier and clean up its damaged image.
Gap wanted to show that they were on the right path again so they started issuing annual reports on the safety standards and working conditions of its suppliers. Ford and Canadian Tire are also issuing CSR reports. With today’s social media, it’s easy for consumers to show when they’ve been duped, and destroy the reputation of a company. This has become one of the most biggest concerns of companies these days. If people perceive them as not doing the right thing, it can turn out very costly.
So when companies found out that a well-communicated and considered CSR initiative could mean more to them than just social responsibility but could also save them a lot of money and efforts, they heard the sound of business.