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The New Age of Corporate Social Responsibility

May 29, 20:03 UTC+3
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In recent years, the international business community has made great progress in corporate social responsibility (CSR) through innovation and implementation of global sustainable development goals (SDGs). Russian companies are just getting their feet wet when it comes to CSR, first of all, as it relates to domestic projects. Yet, they gradually become more open and involved in addressing global challenges.

Many international companies have established a solid CSR track record and have been implementing relevant innovative global solutions.

  • CSR programmes are integrated into ongoing operations to support implementation and improve financial results at the same time. Just one example: Unilever's Shakti project in India, aimed at recruiting women in remote rural areas as independent salespeople for the company, over a ten-year period generated more than USD 100 million in income.
  • Large corporate players join their forces to address responsibility issues and global challenges. For instance, in 2016, Bill Gates, along with several investors, created the Breakthrough Energy Ventures Fund, whose goal is to develop green energy and combat the global climate change.
  • CSR projects rely on and promote cutting-edge technologies, like: mobile solutions, EHealth, new digital platforms, data aggregation, Big Data analytics, smart city, and so on. 
  • International companies have started linking their corporate social responsibility programmes to the global 2030 goals for sustainable development (SDG 2030) adopted by the UN in September 2015.

Russian companies follow the global corporate social responsibility trends.

  • According to the Donors Forum, between 2014 and 2016, corporate contributions to charitable causes in Russia were up 84%, with the combined budget of Russian charities up 39% (from RUB 6.77 billion to RUB 9.38 billion). 
  • The Russian Union of Industrialists and Entrepreneurs noted that in 2016 as many as 164 major Russian companies, in addition to their statutory financial disclosures, had published reports on social responsibility initiatives. Yet Russia is lagging behind the global leaders: by early 2016 over 80% of S&P500 companies were publishing CSR reports on a regular basis. 

Unlike their peers elsewhere, Russian corporate donors are focussed on communities in their areas of operation.

  • According to the Donors Forum, corporate sponsorship priorities in Russia include the development of educational facilities, along with social safety nets for the underprivileged population and local communities. Over a half of corporate donors also provide sponsorship for environmental and cultural programmes, healthcare and sports.
  • CSR programmes implemented by many companies outside of Russia address such global challenges as energy supply, climate change, natural resources and environmental protection, agriculture, nutrition, food supply, and human rights, to name a few. Russian corporates are gradually joining global initiatives, for example, relief work.

Government authorities, and Russia is no exception, have become proactive in defining the standards and frameworks governing corporate social responsibility.

  • In 2014, the EU issued a directive instructing all member countries to implement rules on minimum statutory CSR disclosure requirements.
  • In 2016, Russia launched its own initiative for developing non-financial public disclosure requirements.

Incentives to promote corporate social responsibility are of great importance:

  • In most mature economies charity is rewarded with corporate income tax reductions. In the US, charitable donations are tax-deductible.
  • Tax incentives for corporate social responsibility are not yet in place in Russia, however.
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