The FINANCIAL — CSR practice in the country is in the process of developing but has seen significant improvements over the past several years, according to Global Compact Georgia.
The FINANCIAL — CSR practice in the country is in the process of developing but has seen significant improvements over the past several years, according to Global Compact Georgia. “Awareness of CSR in the community is very low and as a result they are not demanding that companies implement good CSR projects,” said Gia Gvaladze, Head of the Steering Committee at Global Compact Georgia.
The Global Compact is the world’s largest voluntary corporate initiative that currently includes over 2,500 companies in 90 countries. It also enjoys the support of all 191 Heads of States and Governments of the United Nations. Global Compact Georgia incorporates 30 companies. Some of them are producing ones.
“These are the companies that have the best understanding and experience of CSR in Georgia. The number was higher before but it has since decreased. The main reason for leaving the union was that they didn’t do annual reports,” Gvaladze explained.
Q. Do you feel that CSR practice in Georgia is improving?
A. From my point of view, the practice is really in the process of developing. Improvements have been clear over the last 5-10 years. It’s difficult to recognize important changes in a short period however as CSR is a long-term business model. Development of CSR follows the development of the community as it significantly depends on the specific society’s requirements.
Q. In your opinion, how can interest in CSR be increased in Georgia?
A. CSR is a global trend and will be firmly established in Georgia at some stage in the future too. But at the moment it needs greater advertising. Global Compact members are constantly discussing the ways in which it could be popularized. We see two ways: increasing awareness; and outlining the best practices. We are generating a mechanism which will distinguish the companies with the best CSR practices. It will be similar to an awards ceremony. The practice already exists globally and we’d like to establish it in Georgia as well. Global Compact has already tried to create such an awards system but we couldn’t complete it for various reasons, until now. There will be different nomination categories including ‘best environmentally-oriented company’, ‘best employer’, ‘best social project’ etc. The plan has already been set out and I hope that we will soon have the awards ceremony up and running.
Establishing the practice of awarding companies with a green label will be a good incentive as well.
Q. What other activities is Global Compact implementing aimed at popularizing CSR?
A. The low state of awareness about the concept itself is clear. So at first we focused on this direction and held several meetings and seminars aimed at raising knowledge in society and businesses. We have published manuals describing the main principles of CSR and how to implement good CSR practice.
We understand that this isn’t enough and therefore plan to run better awareness-raising campaigns. There was a period when we were more active but we didn’t see feedback from our activities. Therefore Global Compact lost its momentum slightly but we are now restarting our active work. We will reform in a more standing union. Global Compact will maintain the principles of CSR and we will then form a more active organization which will implement these values. We may invite a foreign or international organization in for this purpose. The new project will be tailored to the Georgian reality. We have to find finances for the new project. Global Compact should be transparent in these processes to gain trust from society.
Q. What have the concrete results been of Global Compact’s activities?
A. Our results have not been significantly large. Progress is noticeable but it is a very slow process. The Global Compact as well as businesses should be patient and loyal to the process. CSR is a long-term business model and short-term planning simply can’t bring about adequate results. Otherwise it will just turn into a PR campaign.
Q. Reporting is one of the main principles of socially responsible business, though very few companies in Georgia make public their financial information. In your view, what might encourage companies to start making pubic reports?
A. Transparency and making reports are very important for CSR. This doesn’t just concern financial reports. Companies should make public any kind of progress they have made. Establishing a ranking system will be one of the best incentives for the popularization of reports. Having the best report will also be one of the nomination categories of our award. As a result interest in doing annual analyses will definitely grow. At the moment, even members of Global Compact have problems in issuing reports.
Looking at the global practice, reporting has become very popular in large and small businesses. The number of companies who report their progress publicly has increased about ten times during the last several years. More companies now understand that this practice brings benefits to them.
Q. Do you think that the CSR message is only being heard and acted upon by large companies? Why should small and medium businesses implement CSR activities?
A. CSR is more important for large businesses. They have a bigger impact on society and therefore have more developed management systems. They work on the impact they are having as large companies are more sensitive to society’s opinion. Still, I encourage small businesses to take advantage of all the benefits of CSR. Reporting might not be very important in this case, but protecting the environment and having a healthy attitude towards one’s staff is equally important for both large and small companies. Any business needs the growth and goodwill of its customers, and CSR is the best way to achieve this.
Global Compact is open for small businesses as well. They may have a better practice of CSR than large ones. Small companies are somehow discriminated against in this regard because of their having less of an impact on society. But this is not the right attitude to have. Any company regardless of its size will have the possibility to take part in our awards scheme.
Q. What would you advise to Georgian businesses in terms of CSR?
A. I advise everyone to run their business ethically. This can have a wide understanding and include all the principles of CSR. Complex planning is essential for the successful operating of a business. Companies should not think about planning small projects only, but must maintain a global strategy. Otherwise it will just turn into a form of PR.
There are basic principles of CSR and these are necessary for all entrepreneurs. After establishing them, companies can start more innovative ideas and projects. Development itself brings about innovations. Nowadays we want companies to understand the basic concept of CSR.