The FINANCIAL — By The CSR reputation of companies in Georgiahas been progressing year after year. However, big companies still remain the chief flagman of CSR activities.
The FINANCIAL — By The CSR reputation of companies in Georgiahas been progressing year after year. However, big companies still remain the chief flagman of CSR activities. “Small businesses do not have sufficient motivation to get involved in CSR,” Lela Khoperia, Programme Coordinator at the Center for Strategic Research and Development of Georgia (CSRDG), told The FINANCIAL.
“Big companies wish to export their products to European markets or cooperate with European or US partners. In this case, foreign partners demand they satisfy CSR standards. Such motivation simply doesn’t exist for small businesses,” said Khoperia.
According to Khoperia, corporate responsibility is not just philanthropy. “CSR is the standard of managing a businessin a responsible manner, reducing negative environmental and social impacts of its activities and enhancing the positive impacts. In essence, corporate social responsibility is the business’s willingness to assume more responsibility than obliged by the law, deliberately go beyond its primary function of profit making, voluntarily consider the interests of their customers, suppliers, employees, colleagues, business partners and the public in general in carrying out their business operations.CSR means having a positive influence on the environment, society and macro-economic structures. In Georgia CSR is still understood as charity activity and philanthropy. CSR first started developing in Western countries in a similar way. The main noticeable change regarding the popularity of CSR in Georgia is that companies are more aware of what CSR is. They plan their responsibility more strategicallyand move to more complex forms. They integrate labour standards and environmental impact managementin their activities.”
Q. How have CSR standards been developing in Georgia?
A. Due to the social and economic situation the number of companies running CSR activities has not been increasing sharply. CSR largely remains the initiative of big companies. Small companies are rarely involved in such an initiative given the social-economic conditions. This is not unique to Georgia. It is characteristic of all developing and transitional countries. Even in such developed countries as EU member states, involving small businesses in CSR activities is difficult. Promoting social responsibility among small businesses is strongly encouraged by governments of EU countries. Grants, trainings and other initiatives run by governments play a big role in encouraging small businesses to implement this direction. The European Commission has a number of resolutions and recommendations on how to promote and develop CSR. So, even in developed countries, due to the limited resources of small businesses, CSR activity is on a relatively small scale among small businesses. However, they satisfy the basic CSR standards, while large business companies implement quite large-scale and complex CSR programs in the developed countries. The dynamics of CSR development among large Georgian companiesis evident in the quality of their work. These companies werealready running CSR activities five years ago, but now they are on a different level. Their current work is much more structured and strategic. It is that much closer to western standards. At present we are still far from the desired standards and level of CSR that are assimilated in the West, but the dynamic is slowly progressing. CSR conferences and forums have become an annual initiative. When businesses present their annual CSR programmes at this conferences we then see exactly how we have moved forward.
Q. What are the main obstacles in the implementation of CSR in Georgia?
A. Today the company may spend a minimum on charity but fulfil other CSR activities. Therefore, CSR is not only about monetary contributions. This isabout how companies manage their activities in a sustainable and responsible way. Accordingly, it takes time, human resources and finances, especially in the initial stage.
One of the main problems regarding CSR in Georgia is lack of knowledge and experience in this field. Other significant obstacleis lack of motivation for companies to get involved in a social responsibility campaign. Those actors that have historically driven discourse on responsible business practice in Western society (such as highlighting in the media, government incentives, public demand or pressure from the civil society organizations) are less developed or active in Georgia. The potential of cooperation with the West will be the main incentive for Georgian companies. But today such opportunity is limited.
If bilateral business relations develop more among Georgian and other post Soviet countries, CSR will not develop much, as those countries do not require implementation of such standards. The initiative is mainly coming from European and American countries, which do satisfy very high standards of CSR and consequently demand the same from their partners. At present, to export products to European markets, the quality is insufficient. EU standards require satisfying social and environmental standards of the production process. Georgian companies do not have sufficient opportunities to enter western markets. Satisfying complex standards of CSR will increase loyalty toward companies as well as improving their image.
Developing democratic values is also important for CSR. Under democratic conditions the relations between society, government and business is moving toward relations of partnership. Society is becoming more aware of its rights.
Q. CSR is associated with an attractive environment for employees, transparency of business and protection of the environment. Which of these steps are more satisfied by Georgian companies?
A. We rantwolarge-scale surveys in 2007 in order to study business practices and attitudes in CSR context, as well as public perceptions and expectations on this issue. The results showed that companies have been spending less attention on protecting the environment. They thought that if they were not responsible for producing oil or cement then they are not obligated to protect the environment. We know however that any bank or small office is responsible for environmental protection on the same scale as BP and Heidelberg cement for example.
According to the data from 2007, the most significant activities were issued for internal staff. This is natural, becausemotivation and satisfaction of employeesis directly linked to a company’s success.
Community activities are mainly limited to philanthropy. However, in the context of CSR it would be better to run more sustainable, result-oriented programmes. Giving out financial aid (Simply giving out financial aid in most cases does not lead to eradication of the problem. Community investments should be mostly oriented at long-term sustainable results). The numbers of aid-dependent people should be reduced. According to the 2007 studies, Georgian companies often to not asses social impact and results of their philanthropic donations.
Q. Understanding and implementing social responsibility standards varies by country. Why is this?
A. The difference between countries in how they implement CSR depends on the culture, economy, political systems and laws. However, understanding of the concept of CSR is mostly similar.
Q. How would you compare the level of CSR standards in Georgiawith that in its neighbour countries?
A. By some parameters Georgia is ahead in the development of CSR compared to its neighbours. It is an important fact that CSR is taught as an independent discipline in two Georgian universities.
Q. What is the share of the Government’s role in promoting CSR?
A. In the modern world it is widely assumed that governments should play an important role in helping businesses develop and effectively introduce their CSR policies. Tax benefits work as a stimulating measure for CSR in many countries. But this is not prevalent. The Government should implement other encouraging incentives for CSR such as arranging forums, conferences, trainings and financing the publishing of literature in this discipline. Satisfying CSR standards should be voluntary, not obligatory.