A Four-Pillar Approach

Even if you’ve never heard of Magna International Inc., there’s a good chance you’ve used the company’s hardware. Based in Aurora, Ontario, Magna is a major supplier of car parts to most of the world’s automakers, including the Detroit Three: Ford, Chrysler, and GM. The company designs and builds engines, mirrors, interiors, bodies, and more at its 316 manufacturing locations spread across 29 countries. It’s the fourth-largest automotive-parts supplier in the world, and senior legal counsel Joe Cosentino helps it stay compliant with the latest regulations while supporting its employee-friendly corporate culture.

Through its corporate responsibilty initiatives, Magna International is making an environmental, social, and charitable impact that is transforming the auto industry

In the automotive industry, corporate social responsibility is a multifaceted, ever-changing endeavour. Consumers are becoming increasingly aware of the impact that their decisions have on the environment—and of what car companies are actually accomplishing in the realm of environmental responsibility. On top of this, there are endless legal regulations, related not only to ecological concerns but to the workplace. For parts supplier Magna International Inc., though, it’s not a matter of simply adhering to these regulations; it’s about becoming a leader in the industry, about designing and building some of the most innovative products on the market, and about creating a corporate culture where community comes first.

Joe Cosentino, a senior legal counsel at the company, works with the corporate secretary’s office on special projects, including reviewing the company’s social responsibility policies. He says a big part of his job is “trying to tell the story of what we do. … Magna does some very good things in a lot of different areas that are the [pillars] of social responsibility.”

Facts & Figures

125,000
Number of employees Magna has in 29 countries on 5 continents

2%
Amount of before-tax annual profit that the company typically devotes to philanthropic activities

$35 million
Amount the company has given to charities around the world in recent years

26th
Anniversary in 2014 of the Magna Hoedown

4
Number of innovation pillars the company adheres to, developing cleaner, lighter, smarter, safer products

For one thing, Magna annually reports to the Carbon Disclosure Project, an international nonprofit designed to provide investors with information about corporate emissions. And anyone who pages through the organization’s reports will see that Magna has worked to be a less significant emitter of greenhouse gases. “Part of our innovation strategy is to create products that are energy efficient, whether hybrid technology or other types of products, to help make our way into the new age of cars,” Cosentino says.

This effort has included “light-weighting,” the process of making lighter car parts that don’t require as much fuel to move. Magna’s Bio-Headliner product uses different types of foam so that it’s not as heavy, and the company tries to incorporate aluminum (or other materials) rather than steel into its products to maintain strength while reducing weight. The company seeks out other avenues of efficiency as well. Its Active Grille Shutter system, for instance, opens and closes at certain times on the front of cars so that they drive with less drag when they need to.

Social concerns often come into play for Magna, too. Recently, Cosentino has been working on the SEC’s new conflict-minerals regulations. They were created in response to armed groups taking control of mines in the Congo and surrounding countries, where commonly used metals such as gold and tin are extracted. Cosentino has been spearheading the implementation of new procedures and preparing the SEC’s report. “We’re now responsible for telling the world whether or not we have these minerals in our products,” he says. “It’s causing people to rethink supply chains and consider what kind of transparency they have.”

In-house, Magna emphasizes its “fair enterprise” culture, committed to a workplace environment that prioritizes employee welfare. There are two documents, Cosentino says, that make that culture law at Magna: the employee’s charter and the corporate constitution. The employee’s charter was created in 1988, and its main purpose is to ensure, for all workers, fair treatment, health and safety, equity and profit participation, freedom from discrimination, and competitive wages and benefits.

The corporate constitution is a unique document in the industry, and it prioritizes social responsibility, guaranteeing shareholder profit participation (shareholders receive no less than 20 percent of after-tax profits on average over three years), outlining research and development initiatives, and allocating up to two percent of profit for charitable, cultural, educational, and political purposes.

Every year, in Magna’s hometown of Aurora, Ontario, the company hosts the Magna Hoedown, a country-themed summer party to benefit local charities. Through such acts, Cosentino has noticed, Magna’s commitment to social responsibility has trickled down to its employees, who have initiated a variety of charitable activities of their own, including races for cancer research and tree planting in Mexico.

“They feel like part of their community,” Cosentino says. “I can’t help but take note of the fact that the corporation supports that in writing. We’ve got social responsibility enshrined in our articles. It’s been part of our DNA for a long time.”