Why Do Small and Medium Businesses Need CSR?

On April 29, a sectoral discussion "Corporate Social Responsibility (CSR) for Small and Medium Businesses". Experts from Belarus and Ukraine, as well as representatives of the private sector, international and Belarusian state institutions, discussed application of CSR principles in small and medium enterprises to develop commercial companies and ensure their economic growth. The discussion in Minsk was organized by the ODB (Brussels) in partnership with the Association of European Business (Minsk).

As Olga Stuzhinskaya, director of ODB (Brussels) noted in the course of the discussion, today Belarus has a certain vacuum of experts that the Office for a Democratic Belarus attempts to fill by attracting experts from the EU and the Eastern Partnership countries. In particular, in the implementation of new CSR standards for Belarusian companies.

According to Deputy Chairman of the Association of European Business Marina Borovko, this discussion is not the first event to inform representatives of business on CSR application: the Association and the ODB (Brussels) held a seminar on organization of "green offices"  and ecological approach in entrepreneurship last September within the framework of the European Intercultural Festival.

When presenting the Ukrainian experience, Marina Saprykina, developer and co-author of the project of the National CSR Strategy Concept in Ukraine, explained that the problem of "strategization" is a typical one for both countries (Belarus and Ukraine). Ukraine has only adopted a Presidential Decree on development of the National CSR Strategy, but, according to her, in the context of the current package of governmental reforms it can include CSR issues as well. In particular, it is expected that it will oblige Ukrainian state companies to adhere to CSR principles and establish social responsibility of municipalities. At the same time, in the opinion of Marina Saprykina, it is state-owned companies in Ukraine that must set an example to private businesses.

CSR is more than just business

According to Marina Saprykina, the issues of CSR for small and medium businesses are currently important  because only in Europe, 70-80% of companies belong to that sector: small and medium businesses provide the majority of jobs. That is why during crises, says the Ukrainian expert, applying CSR principles to employees cannot only preserve jobs but retain valuable employees. CSR strategy in business includes a number of elements and ultimately involves company development strategy.

Marina Saprykina, Executive Director of the Center for CSR Development (Ukraine): "Certain CSR projects can be implemented with "zero" budget. For instance, concerning staff relations: workplace exercises. In this case the aspect is employee health care. Speaking about HR on staff relation policies, it is the area that is absolutely intertwined with CSR, and that is why we say that CSR is a part of business strategy."

Speaking about the issue of "employee turnover", the Ukrainian expert made a note of one Ukrainian companies where an employee started a lunchtime yoga class for colleagues. As a result of several similar initiatives, in 8 years not a single employee of the company quit their job.

Gender equality matters are also important in CSR, thinks Iryna Alkhouka, member of the National Council on Gender Policy at the Council of Ministers of the Republic of Belarus. It is not just about ensuring that men and women have equal access to top management positions to improve the quality of company management but also about the rights of male employees to raise children and take paternity leave. It is good CSR practice to provide "post-leave" training to qualified employees, additional childcare payments, and hire employees with children as potential leaders and responsible workers.

Doing "green" CSR projects in an economic crisis, businesses can make a product more competitive, thinks Darya Chumakova, Deputy Head of the Center for Environmental Solutions: "I think that many have already felt that the demand for environmentally friendly goods and services is high. The customers now ask: why is this product better than others? – in this case the fact that they are environmentally friendly or that the company invests in environmental protection can help them make a decision to purchase certain goods or services".

Konstantin Kolomiets, entrepreneur: "You can find many enterprises and entrepreneurs, and employees who have a responsible attitude towards environment. However, in the absence of money it’s about clean-up initiatives or volunteering projects. Business must demonstrate their responsibility to the state, to the public, to the disadvantaged, etc. I would not call it corporate social responsibility but just social responsibility of small business."

Speaking about the new "class" of socially responsible investors and businesses having access to international financial resources, participant of the 3rd International United Nations Forum on Business and Human Rights, Chairman of Belarusian Helsinki Committee Oleg Gulak noted that when respect for worker’s rights is ensured in employer-employee relations, it can even help reduce interest rate when borrowing money in Western banks:

"Speaking about labour relations, our social security is at a sufficiently high level. The basic problem is that the CSR spirit is about respecting human rights. In this regard this does not end with legislation. Secondly, we don’t have important aspects that any CSR approach should have – equality, combatting discrimination and social dialogue via trade unions. These two points are almost undeveloped in our business."

Talking about people with disabilities in the Belarusian labour market and stereotypes about "unusual" employees, Head of RADP Evgeniy Shevko noted that "quotas" of employment bureaus are a major obstacle for professional fulfillment. According to him, most people with disabilities there are offered positions requiring unskilled labour. At the same time, the choice of profession is considerably limited by their individual rehabilitation programme: when disabled people apply for "hot" vacancies, they can simply not have enough time to get a corresponding medical record permitting them to do that in accordance with their individual rehabilitation programme. (According to the UN Office in Belarus, there are now 530 thousand disabled persons in the country).

Issues of CSR compliance in Belarus are already discussed at government level, noted Inessa Matsulevich, Head of the Small and Medium Business Sector at the Economy Research Institute of the Ministry of Economy:

"CSR is a new issues for our economy and for the private sector, it is very relevant – this can be felt at all levels of government and administration, so presumably, it will be promoted actively enough. The Ministry of Economy, with the support of the World Bank, is developing a medium-term strategy for small and medium business development. Development strategies of the republic on the whole are being developed: in particular, the National Strategy of Sustainable Social and Economic Development of the Republic of Belarus up to 2030 – where these issues are already included, but in a concise form, because it is a general policy document. It is early to speak about the development of CSR strategy as such but the governmental benefits for business are already discussed: these can include tax preferences, everything is at the stage of development, research and analysis."

In order to achieve success, companies must cooperate with the government and local communities, says Antonina Seryakova, brand manager of Zubr Capital management company. In her opinion, CSR projects can make cooperation with all market actors more effective and help promote goods and services.

ODB