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Brad Mills of Mills Basics, based in Vancouver, left. Another company that has taken social responsibility steps is the Running Room.

Ask Brad Mills about the most exciting aspect of his business these days and you might think his company's impressive $18.5-million annual revenue would top the list.

Instead, Mr. Mills - chief executive officer of Vancouver-based office-supply firm Mills Basics - is far more charged up about his new green ride.

"I always tell people that at my age, I should go out and buy a Porsche, but I went out and bought an electric truck instead," he quips.

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The truck he's referring to is an emission-free eStar delivery vehicle, for which Mr. Mills shelled out upwards of $130,000. The purchase is part of his plan to realize a 30-per-cent reduction in Mills Basics' current 532 tonne annual carbon output by 2020.

Couple that with the offset credits his firm purchased this year to ensure its carbon neutrality and his work with the HAVE Cafe, a non-profit organization that hires and trains hard-to-employ locals, and it's clear that Mr. Mills' efforts are tied to something much bigger - namely, a corporate social responsibility (CSR) strategy intended to help improve social and environmental conditions in his community, Vancouver's troubled Downtown Eastside.

Like other owners of Canadian small and medium-sized businesses, Mr. Mills quickly learned that efforts to reduce his firm's carbon emissions and spruce up the neighbourhood - which began in 2002 when Mills Basics first started hiring down-and-out locals to work in its warehouse - had residual benefits.

Being a good corporate citizen, it turned out, was good for business and allowed the company to compete alongside much larger office suppliers such as Staples.

"Without this strategy, we'd never have been able to grow to where we are today," he explains, adding that Mills Basics' annual revenue growth jumped from 5 per cent in 2002 to 12 per cent annually by 2008 after the company began publicizing its community work to prospective customers.

The company was far ahead of the curve. Today, every one of Mills Basics' customers demand an outline of the company's social or environmental activities before signing on the dotted line, Mr. Mills says.

He credits those community efforts with providing the competitive advantage he needed to win key contracts from large customers such as the Vancouver Organizing Committee for the 2010 Olympic Winter Games.

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Small and medium businesses across Canada are increasingly tapping into what Mr. Mills discovered years ago: CSR matters not only to consumers, but also other businesses that are now actively scrutinizing the sustainability of their supply chains, as well as eco- and socially conscious employees who see social responsibility as an attractive job benefit.

Just how much can a business' social and environmental activities affect its bottom line?

According to a 2010 survey by Toronto-based advertising agency Bensimon Byrne, 66 per cent of Canadians said that corporate reputation has a significant impact on the brands they choose. A 2009 study by Toronto-based market research firm GlobeScan found that 57 per cent of Canadian consumers have refused to buy from companies they felt were socially irresponsible.

"I think (CSR) is becoming so common now and companies are talking more and more about their CSR practices, that if you're not doing this you're conspicuous by your absence," says Lara Ryan, a Ferguson's Cove, N.S.-based CSR consultant. "One of the biggest reasons companies do this is for awareness and to gain a competitive advantage."

For John Stanton, founder of Edmonton-based running shoe retailer the Running Room, sponsoring hundreds of fundraising events across Canada each year - and in turn raising millions of dollars to benefit charities - has been a core part of his socially focused business philosophy since founding the company in 1984.

"If you look after the customer, they'll look after you," Mr. Stanton says. "Great companies are those that look at what they're doing for themselves, their customers and their community - they create a triple win."

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One example of the retailer's charitable bent: After first sponsoring the Canadian Breast Cancer Foundation's Run for the Cure in the mid-1980s, Mr. Stanton launched a "pink ribbon" line of clothing in his stores to provide a year-round cancer fundraising vehicle. All profits from the line are donated to charity, and to-date, the initiative has raised $790,000 for breast cancer research. Mr. Stanton expects to clear the $1-million mark next year.

The 104-store chain is also involved in health and wellness programs across the country, encouraging Canadians to become fit and active.

Mr. Stanton credits those social initiatives for improved brand recognition and an ability to compete with much larger chains such as SportChek. He cites an 80-per-cent repeat customer rate, revenue growth that stretched into the low 20-per-cent range in recent years, as well as a 60-per-cent employee retention rate, which is extremely low turnover for the retail industry.

"We have staff that have been with us for 15 or 20 years," he explains. "They enjoy being part of the community, creating that triple win."

For Mr. Stanton, a strong CSR component provides what he calls the "warm and fuzzy" feelings that keep customers buying shoes, his employees engaged and reinforce his strong feelings about what it means to be a good corporate citizen.

"Whether you're fundraising for the Canadian Breast Cancer Foundation or Heart and Stroke Foundation, they win, we win and the community wins," he says. "At the end of the day, we sleep a lot better at night knowing we truly and honestly contribute to the community."

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