BR ANALYSIS. CSR matures despite lack of clarity around charity

Newsroom 18/06/2019 | 07:00

With the local CSR scene remaining on a steady trend, companies are now focusing on refining their CSR projects, aiming to tackle topics that have a long-term impact on the environment or communities where they operate. More and more firms are finally starting to make a difference between charitable endeavors and responsibility. Business Review highlights some of the main trends on the local CSR market and sat down with specialists to find out where it is now and what’s next.

By Anda Sebesi

According to the study “The Dynamic and Perspectives of the CSR field in Romania” conducted last year by Valoria and CSRmedia, the local CSR market slowed down in 2018 compared with 2017, while the number of companies which involved their employees in CSR activities posted a significant drop.

The same study found that 49 of the firms included in the survey said that they had a local CSR strategy implemented compared with 55 percent in 2017, while 30 percent of the respondents (compared with 35 percent in 2017) said that their CSR budget stagnated last year. In addition, 21 percent said that their CSR budget was between EUR 50,000 and EUR 100,000 in 2018. Last but not least, 36 percent of the respondents run projects with an average value of EUR 10,000-50,000 while just 3 percent said that the average value of their projects exceeded EUR 100,000.

But beyond the figures, how has the local CSR scene developed in recent years? “Over the last few years, I think we have seen significant development in the way CSR is understood and promoted in Romania, especially by larger companies. The key point to understand is that CSR is not just the simple act of making donations to good causes. While this is, of course, important, CSR is also about the whole value system of a company and how it plays a responsible and positive role in the community,” says Ramona Jurubita, country managing partner at KPMG in Romania.

She adds that a company with an effective CSR policy acts ethically in the way it does its business, and the way it chooses its clients and suppliers. “A company which genuinely applies the principles of CSR will be engaged in a business which contributes to the overall wellbeing of the community and will not be concerned solely with profit,” says Jurubita.

For example, as Coca-Cola HBC Romania’s sustainability report for 2016-2017 shows, the company focuses on implementing sustainable practices in all its processes and operations, both in relation to its consumers, employees, clients and suppliers and environmental protection and supporting local communities. “Our commitment is to encourage our partners and support communities where we operate to use as sustainable practices as possible and pay increasing attention to their impact. Through our actions, we aim to contribute to the creation of a real sustainability ecosystem in Romania that includes the entire value chain generated by Coca-Cola HBC Romania. We need to understand that the discussion around this topic is not just about the environment but about the effects of all of our actions,” said Irina Ionescu, public affairs and communication manager at Coca-Cola HBC Romania, earlier this year, on the release of the 2016-2017 company’s sustainability report.

Kaufland Romania is another example in this regard. The company embeds sustainability in its business strategy and makes decisions considering its impact on the environment, communities where it operates and its supply chain, clients and employees.

A turning point

Since 2017, it has been compulsory for Romanian public interest entities with at least 500 employees to issue an annual non-financial (sustainability / CSR) report, as well as the traditional financial report. The sustainability report must focus on issues like the company’s environmental policy, the protection of employees and community support. In addition, as of this year, non-financial reporting will be compulsory for all firms operating in Romania with more than 500 employees. “I think this is a very welcome development,” says Jurubita. “Many companies now have quite a well-developed CSR strategy and it is particularly welcome that many now combine some of their charitable donations with financially supporting NGOs in a coordinated way. This reduces the danger of companies ‘competing’ to be seen to be supporting good causes. However, in some of the smaller companies, CSR activities are still often rather ad hoc. I expect this will change over the next few years.”

As pundits say, overall, the approach of many Romanian companies to CSR has progressed from an incoherent and project-based manner of acting to one of strategic management, with clear directions of involvement, established on the basis of stakeholders’ legitimate demands and each company’s socio-economic impact on society.

What’s next?

“With global challenges like climate change, environmental protection, human rights, and workforce diversity increasingly in focus, I expect more and more attention will be given to CSR both in Romania and in other countries,” says the KPMG representative. While a few decades ago, CSR merely meant giving money to a few good causes, now it is about the whole ethos behind the way a company operates. It will become an essential element of doing business for companies to have a well-developed CSR strategy. “Moreover, in response to growing awareness of the importance of CSR and sustainable development issues, the related performance attributes are increasingly being used by companies to differentiate their brand, products and/or services to both consumers and competitors, enhancing their reputation. So companies will be more active in CSR and will develop reliable and diversified CSR strategies,” concludes Jurubita.

UN sustainable development goals

Last but not least, on January 1st 2016, the 17 Sustainable Development Goals (SDGs) of the 2030 Agenda for Sustainable Development — adopted by world leaders in September 2015 at an UN Summit — officially came into force.  Over the next fifteen years, with these new Goals that universally apply to all, countries will mobilize efforts to end all forms of poverty, fight inequalities and tackle climate change, while ensuring that no one is left behind.

The SDGs aim to go further to end all forms of poverty. The new Goals are unique in that they call for action by all countries, poor, rich and middle-income to promote prosperity while protecting the planet. They recognize that ending poverty must go hand-in-hand with strategies that build economic growth and addresses a range of social needs including education, health, social protection, and job opportunities, while tackling climate change and environmental protection.

Note: The companies and CSR projects/programs included in this article represent only a selection. The article is not a comprehensive report on the Romanian CSR market.

Trend 1: Equal opportunities and gender equality

Many companies active on the local market address equal opportunities and gender equality issues.

Ikea Romania in partnership with Fundatia Comunitara Bucuresti launched the Ikea Fund for Gender Equality in December last year, with a total value of about RON 630,000. The fund was launched with the aim of offering three years’ financial support to projects in Bucharest and Ilfov county that encourage the economic independence of vulnerable women and promote gender partnership. According to the most recent Equality Gender Index, Romania ranks 25th in the European Union for gender equality. The index analyses women’s and men’s situation when it comes to the labor market, financial resources, their level of education and health, the way they use their spare time and their decision-making power. “Ikea is a company built on humanistic values and we think that gender equality is important for both our employees and customers,” said Ioana Stefan, Ikea Romania’s ambassador for diversity and inclusion, earlier this year.

In the same vein, since last year, all Ikea employees who became fathers get a month’s paid paternity leave as soon as their partners return to their jobs. During this month, from which employees can benefit once, they get their entire monthly salary. “Time spent with families is important to create a work-life balance and makes our employees more satisfied. We want to support our employees in their new roles. Throughout this measure we want to encourage the equal involvement of fathers in raising their kids from infancy,” says Georgiana Stancu, HR manager at Ikea Romania.

Elsewhere, Kaufland Romania has allotted a specific budget from its #Instaredebine program, to finance five projects dedicated to the promotion of women and their rights. Last but not least, Kaspersky Lab sponsored Girls in Tech’s Amplfy, a competition for women entrepreneurs. It is one of several initiatives that the company supports to achieve its goal of helping more women to follow their passion for digital products and services. And through the project, “PwC’s Tech She Can”, Kaspersky Lab aims to increase the number of women working in technology.

Trend 2: Small grants for small NGOs

Some companies have started to address small companies, offering grants for projects. It is a step forward in the development of the local CSR market and proof that companies believe smaller NGOs have great potential to make things happen.

Kaufland Romania is one such example. In partnership with the Act For Tomorrow Association, the company launched this year Start ONG, the first and so far only financing program dedicated to small and infant NGOs. The total sum offered by Kaulfand Romania with the aim of supporting such NGOs is EUR 500,000, which will be used to finance over 100 projects this year. Education, environment, health, social and culture are the main directions of the program, while the maximum grant is EUR 10,000 each. “Social and environmental responsibility is our priority and so we take the support of civil society to the next level. Thus, we created Start ONG, which allows us to invest in the development of younger NGOs and support their ideas,” says Katharina Scheidereiter, CSR manager at Kaufland Romania.

Trend 3: Cash investments in the healthcare system

Many multinational companies focus their financial efforts on bolstering the infrastructure of the local medical system. From contributions to the building of hospitals, to building heliports and renovating blood transfusion centers nationwide, firms deliver significant investments.

The EUR 10 million investment made by OMV Petrom in the construction of the first pediatric hospital specialized in oncology and radiotherapy in Romania, an initiative of Daruieste Viata Association, is by far the largest contribution in this regard. Half of the sum will be used to buy the medical equipment needed to diagnose and treat pediatric cancer, while the remainder will be directed towards interior furnishing and sanitary appliance works. MasterCard is another company that chose to donate EUR 1 million and double the sums donated by its customers to Daruieste Viata Association, in order to contribute to the same major project developed by the NGO. “We hope that solidarity for the causes that matter for the community will become a normal act through which we build together a better future. So our commitment is to get involved in supporting the community through long-term partnerships,” says Cosmin Vladimirescu, country manager at MasterCard Romania.

Elsewhere, Mol Romania and Inima Copiilor Association joined forces to build a heliport on the roof of Marie Curie Pediatric Emergency Hospital, with an investment of EUR 425,000. Works will start this fall.

Last but not least, the modernization of the 41st blood transfusion center nationwide has been completed recently. The project was part of the program called “A chance for life”, a partnership between Vodafone Romania Foundation and React Association. The total investment made by the foundation was EUR 1 million.

Trend 4: Accent on technology and smart solutions to improve lives

Innovation is the key for the progress of any society and investing in social projects that aim to improve the lives of local communities is a major step towards economic and social development in Romania.

Earlier this year, OMV Petrom launched the second edition of its “RO Smart in Tara lui Andrei” competition, through which candidates could get financing of up to EUR 45,000 per project. The total value of the grants is EUR 500,000. Projects have to address sectors like education, health, the environment, transportation and infrastructure, with the aim of improving Romanians’ lives. “Our first edition financed RO Smart projects that proved that technology can improve the quality of life of the community. Projects that make a difference in transforming today’s communities into communities of the future using technology and digitalization are eligible for the competition,” said Mona Nicolici, manager of the sustainability department of OMV Petrom, earlier this year.

Trend 5: Community development

Companies now focus on making a contribution to the community development concept. Earlier this year, Ceetrus opened in the Drumul Taberelor retail center Cartier Hub, the first community hub in Romania, with an investment of EUR 170,000. Cartier Hub is a space provided for the community of the Drumul Taberei district as a catalyzer of urban life in the neighborhood, bringing together different social and cooperative groups with the aim of improving local quality of life. The location also hosts educational and personal development workshops for children, adults and seniors as well as civic education, arts and recycling workshops. “Through Cartier Hub we intend to offer locals from this district a space where they can express themselves in a place built as a response to their needs. It is designed to bring people together and help them to create connections with others,” says Raluca Crisan, country leader at Ceetrus Romania.

Trend 6: Technology for life and education

Tech firms focus their efforts on using technology to improve the quality of life of different disadvantaged groups and to educate.

Earlier this year, Orange Foundation launched a new edition of Digitaliada for the 2019-2020 school year, a contest that includes ten schools from rural areas that will be included in the digital education program. So far Digitaliada has reached 4,500 students from 49 schools from rural areas, who learn math and informatics using interactive digital methods. “In three years, Digitaliada has created a national community leading to the creation of an online community around the Digitaliada platform. We will continue to invest and support these communities, offering them meanings through which they can use, create and share as much as possible digital educational content,” says Dana Deac, president of the Orange Foundation.

Technology can be used to help solve social problems, too. One such example is Connecting for Good, a program developed by Vodafone Romania Foundation. It is one of the foundation’s most important programs and since its launch, six years ago, Connecting for Good has financed over 55 projects, reaching 470,000 Romanians nationwide, with a total investment of over RON 18 million so far.

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