How can a small or medium-sized business start a CSR project, what are the goals pursued by NGOs and how can corporate social responsibility affect long-term profitability of a business? - Expert Marina Saprykina, who co-developed the project of Ukraine's National CSR Strategy and is the head of the Centre for CSR Development (Ukraine), explained how corporate social responsibility is developing in Post-Soviet countries and shared practical tips on how CSR can be used to help grow a business. More details in her personal interview.
|Marina Saprykina, Executive Director of the Centre for CSR Development (Kyiv, Ukraine)|
- How long ago was the practice of "corporate social responsibility" introduced to business in Ukraine?
- Since the USSR times, we have been familiar with the practice of "monocities": when lives of residents of a whole city located close to an enterprise depended on this single enterprise. Some experts say that corporate social responsibility started back then. But in fact, the concept of "corporate social responsibility" was brought to Post-Soviet countries by the UN Global Compact initiative. It took a lot of effort to help businesses join the Global Compact; this is one hundred percent true for the Baltic countries, for Belarus and Ukraine. In Moldova, corporate social responsibility was promoted by the American Chamber of Commerce: it organized conferences on CSR several years in a row.
Businesses quickly realized the advantages of the principle of voluntary participation in the Global Compact. Now, however, there is a tendency to "toughen" the rules: the companies now have to provide reports on Global Compact every year and not once every 2-3 years as before.
In the United States CSR is "corporate citizenship". However, I like the definition of the European Commission better: "CSR refers to companies taking responsibility for their impact on society". Corporate social responsibility is considered to be a European concept. Experts from more than 80 countries took part in the development of modern international CSR standards – ISO 26000 standard was created in 2010.
- In terms of implementing CSR projects, do state or private companies have more opportunities?
- Corporate social responsibility can be legalized for state companies. The state should set an example through its enterprises. This is what happened in Sweden, for example, where the requirement to provide reports on GRI was first made mandatory for public companies. India became the first country in the world where CSR was enshrined in law: Indian companies are obliged to spend 2% of their profits on corporate social responsibility.
In European countries there is no legal requirement to include corporate social responsibility in the company's strategy but non-financial indicators, or CSR indicators, must be included in the reports.
For our Post-Soviet countries it would be more accurate to define CSR as "more than it is required", we can say that "it is more than prescribed by law".
- Why do businesses need CSR?
- Corporate social responsibility is necessary for companies that want to develop and progress from a small business to a medium one or from a medium-sized business to a large one. CSR brings business to a new level: it is a business that is here to stay. All the values, as well as the company's vision of its mission, begin in corporate governance and fair operating practices. It is important how the company makes its decisions, whether it is transparent and open to dialogue, how it minimizes the risk of corruption. Fair operating practices is how a company behaves: whether it is honest in its advertising, whether it exploits gender stereotypes, etc. Responsible marketing is very important as well. It demonstrates how the company speaks about its competitors in advertising. The companies need to understand the scope of their responsibility, which also covers relationships they build with their customers and the way they develop local communities.
Maersk, a Danish company that works in maritime shipping, has a good example of cooperation with local communities. The company had a problem in one of the seaports: local residents were complaining about the noise and submitted a lot of complaints to various institutions. The company's image in that region was terrible until one of Maersk's new employees organized a round table with the local residents: she wanted to listen to them and to understand their reasoning. After that, the company set up noise-cancelling nets in the port. Maersk put minimal efforts to do this, while before the situation had been damaging the company's business reputation for several years.
Businesses need to understand that CSR brings competitive advantages: better employees, more loyal customers, as well as something that is usually called "the license to work": when local communities do not go to protest or picket company's offices with posters.
- What are the areas where CSR projects can be implemented?
- There are seven "pillars" of CSR: corporate governance, human rights, employment relations, environment, development of local communities, customer relations, fair operating practices (fair competition, responsible marketing).
Once we asked representatives of business in Ukraine: "How can we stimulate CSR?" A lot of them said that it could only be done with tax preferences. When we asked them to specify, no one was able to name any tax they needed to be exempt from.
One of the key principles of CSR is not exemption from taxes but the dialogue with stakeholders, the ability to listen to their customers and employees.
By implementing CSR projects, businesses can help civil society organizations become more sustainable, including financial sustainability, but they need to be trained in working with business. We organized courses for non-commercial organizations, experts on staff, in Ukraine. Such meetings are still going on. We already have a sector of NGO professionals in Ukraine.
Ukraine now has a new government, a new president, and we are currently working to make state companies more transparent. We have a CSR project, and we would like our public companies to set an example to the private sector in the nearest future.
Marina Saprykina (Kyiv, Ukraine) – Ukrainian expert on implementation of International Standard on Social Responsibility ISO 2600, CSR consultant for companies in Ukraine such as Kyivstar, Samsung, VIKO and others, who designed and co-authored the project of National CSR Strategy in Ukraine. Ensured that the President of Ukraine signed a Decree on CSR strategy implementation. Author of more than 40 papers on CSR, including a textbook "Corporate Social Responsibility: Management Models and Methods" (2011). Executive Director of the Center for CSR Development (Kyiv).
Sectoral Discussion "Corporate Social Responsibility (CSR) for Small and Medium Businesses" which included Marina Saprykina, Executive Director of the Centre for CSR Development (Ukraine), as a keynote speaker, was held in Minsk on April 29, 2015. It was organized by ODB (Brussels) and the Association of European Business (Minsk).