Making corporate social responsibilty a competitive advantage

When Aaron Regent took over the reins as CEO of Barrick Gold Corporation nearly two years ago, one of the first things on his agenda was to move the company forward by increasing its focus on corporate social responsibility.

Regent recognized the significance of two parallel trends affecting the mining industry. First, deposits were shifting to more remote and geopolitically complex regions of the world, creating greater risks for companies. At the same time, public expectations and scrutiny of the mining sector has been steadily on the rise, with every indication this trend will continue.

“Corporate social responsibility within the mining industry has never been more important. For Barrick, the success of our business is tied to communities that face societal and economic challenges and our ability to continue to be successful depends on being able to engage responsibly with governments, communities, civil society and other stakeholders and manage issues,” says Regent.

Regent is hands on when it comes to CSR and proud of what his company and its people are doing to help ensure that Barrick is a welcome neighbour. He acknowledges there have been problems and challenges, but a company-wide strategy of operating to international standards in such areas as community relations, environmental management, safety and ethics has given the company a competitive edge.

“Our strategy is to maximize the economic benefits of our business in the communities and host countries where we operate,” says Regent. “We aim to be a catalyst for economic development and prosperity to that region.”

With 25 operating mines, plus five other major projects on five continents, managing its global portfolio is no easy task. But as Regent points out, an effective CSR strategy is one of the company’s most important risk management tools. “It is in our best interest as a company to help our host communities in their efforts to be stable, secure, healthy and prosperous,” said Regent. “Above all, we are committed to CSR because it is the right thing to do.”

Over the past decade, Barrick has invested $132 million on community programs globally. From an economic value-added perspective, $8.7 billion was invested through: $6 billion in local/regional goods and services; $1.6 billion in wages and benefits; and, $1.1 billion in royalties, taxes and voluntary payments. In developing and emerging economies, the company contributed about $2.8 billion of that amount last year.

“We want people to be better off since we began operating in their communities. We make very significant social investments to improve quality of life; whether it’s improving basic health care services, providing clean water and electricity or fighting high rates of HIV/AIDS and child malnutrition in developing regions,” says Regent.

Greater public scrutiny and the emergence of ethical investing have given rise to independent ranking organizations, which assess companies against international performance standards. For the past three years, Barrick has been ranked as a world leader in social and environmental responsibility by the Dow Jones Sustainability World Index. Most recently, Barrick was also ranked among the top 100 companies in the world for its sustainability performance and reporting by the NASDAQ Global Sustainability Index. It is the only Canadian mining company to be included on the NASDAQ listing.

Regent is pleased by the international recognition his company has received, while emphasizing that strong community support and trust is even more essential. Barrick recently announced a series of new CSR initiatives, including plans to create a CSR Advisory Board that will see independent experts advise the company on difficult social and environmental issues. In 2011, the company also plans to appoint a new Director to its Board with CSR experience. Barrick has also become the first Canadian mining company to join the Voluntary Principles on Security and Human Rights, developed to help extractive sector companies protect human rights and manage security risks at the operational level.

“We have every intention of continuing to improve our performance in this critical area. We want to be leaders and innovators in CSR, now and in the future.”

CMJ