Company approaches to corporate social responsibility
At the end of February 2007, the marketing and social research agency Alpha Research presented the findings of a survey on corporate social responsibility (CSR) in Bulgarian companies. CSR is interpreted in many different ways, but it is still not part of companies’ long-term business strategies. Not surprisingly, multinational and large companies are found to be most active in the area of CSR.
On 28 February 2007, the official launch of the baseline survey on Corporate social responsibility within the Bulgarian context was held in Sofia. The survey was conducted by the marketing and social research agency Alpha Research and commissioned by the United Nations Global Compact and the Bulgarian Charities Aid Foundation (Фондация ‘Помощ за благотворителността в България’, BCAF). At this occasion, over 120 participants representing members of the Bulgarian Global Compact Network, social partner organisations, non-governmental organisations (NGOs), international organisations, government and media aired their views on corporate social responsibility (CSR).
In his opening speech at the meeting, the Resident Representative of the United Nations Development Programme (UNDP), Neil Buhne, highlighted the role of the UNDP and the Global Compact Network in promoting CSR. The Director of Alpha Research, Boryana Dimitrova, presented the survey findings.
The survey is the first phase of the regional project which aimed to accelerate the implementation of CSR practices in five new EU Member States – Bulgaria, Hungary, Lithuania, Poland and Slovakia – and in three candidate countries – Croatia, the Former Yugoslav Republic of Macedonia and Turkey. It is based on direct standardised interviews with managers in 121 medium-sized and large companies.
Approaches to CSR
An important finding of the survey is that many companies do not yet make a clear distinction between giving, sponsorship and socially-responsible activities.
The most widespread forms of socially-responsible activities include the following:
- direct provision of funds, evident in 52% of companies;
- targeting health, qualification and other social needs of staff, evident in 52% of companies;
- non-financial support in the form of free products or services, evident in 27% of companies;
- investment in energy efficiency and environmental protection, evident in 25% of companies.
Approaches to CSR
The survey identified three different approaches to CSR.
- Caring for company staff and their families: This is the most widespread perception of CSR which includes two approaches – the paternalistic approach and the innovative approach; the former sees the ‘the employer as benefactor’ and the latter focuses on qualification and training, as well as social investment (insurance and loan benefits), which enhance the capacity, professional and social capital of employees.
- Social activities benefiting the local community: As a rule, these actions are not part of the long-term strategy of companies and decisions are made on a case-by-case basis. Activities include improvements in the urban environment, public relations interests with a social impact, and support for orphans, children and elderly people in institutions.
- Activities with a long-term social impact, such as social investment: Most often, this approach is taken by large foreign companies who have a corporate policy in place and are implementing coherent, long-term strategies and policies.
Nevertheless, even though there are positive trends, CSR is not yet incorporated in companies’ long-term business strategies.
Business practices associated with CSR
The survey findings reveal that the practice of CSR has gradually penetrated into the Bulgarian business environment. For example:
- some 40% of the companies surveyed stated growing interest towards socially-responsible activities in the country. Every second company plans to maintain its activities at their present level, 28% of companies plan to improve such activities, while 22% of companies do not intend to engage in similar activities at all;
- 72% of foreign companies and 79% of large companies supported financially socially-responsible activities compared to an average of 44%–50% of smaller and local companies;
- an average of 2%–15% of the companies’ total budget for advertising and promotional work is targeted at CSR activities. The volume of funds allocated rarely exceeds BGN 5,000 (about €2,556 as at July 2007) a year – this is the case for around 30% of companies. Around 10% of companies spend between BGN 5,000 and BGN 50,000 (€25,566) on such activities;
- the direct provision of funds, activities targeted at staff, non-financial assistance, and investment in environmental issues are among the most widespread CSR activities of companies.
The practice of CSR is gradually spreading among an increasing number of Bulgarian companies, which search for better ways to show their commitment to their employees, the environment and communities. Trade unions at branch and enterprise level are also becoming more active in the dialogue relating to CSR (BG0607019I). However, further efforts for better planning, implementation and evaluation of socially-engaged programmes are needed. Global Compact and other national and international organisations are actively engaged with the national stakeholders in terms of raising awareness of CSR and exchanging experiences. To this end, a National Round Table on the Implementation of Social Standards was set up in 2004 to encourage the implementation of and compliance with social standards in enterprises, initially in the textiles and clothing sector (BG0404102N) and subsequently in other economic sectors. During 2006, the round table held a conference on ‘How to integrate CSR into business’, under the auspices of the Minister of Labour and Social Policy (BG0607039I). The discussion was further developed with the international Conference on CSR for small and medium businesses and advisory institutions held in mid June 2007.
Nadezhda Daskalova, Institute for Social and Trade Union Research