BR Analysis. Romanian CSR market goes sustainable

With companies becoming more aware of the benefits of their involvement in the community in which they operate, the local CSR market has made a significant step toward maturity. Many firms are now focusing on embedding the sustainability concept in their business strategy.

By Anda Sebesi

Many companies operating on the Romanian market have already identified their relevant stakeholders, and an increasing effort to answer their expectations can be observed. While a few years ago, firms often considered CSR to be only about charity and sponsorship, currently the CSR market in Romania offers many other ways for companies to get involved in community life. “The main trend on the local CSR market is the difference that companies have started to make between ‘responsibility’ and ‘philanthropy’. As a result, we have witnessed a significant drop in the number of companies that justify their responsibility through some charity activities or sponsorships,” says Dragos Tuta, founder and managing partner at The CSR Agency. He adds that this is an important step because for many years responsibility and charity were similar things in Romania, and so the CSR concept lost credibility.

As Tuta says, corporate responsibility has become a work style for firms’ entire management teams, and not just a practice of the communication department. “Now Romania has companies that have on their board a sustainability coordinator who can oppose any business decision,” says Tuta. In addition, more and more companies are investing in the development of their internal knowledge and skills, by training a specific team comprised of representatives of key departments to become specialists in sustainability.

“CSR activities have diversified and now also include, for instance, volunteering and direct involvement in helping to address various problems in the community, or offering pro bono professional services to active NGOs or local authorities working in the community,” says Gheorghita Diaconu, director, advisory services, at KPMG in Romania.

To conclude, many Romanian companies’ approach 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.

Sustainability is the key

So how do businesses embed sustainability in their business strategy? According to a recent study conducted by CSR Media and Valoria, The Dynamic and Perspectives of the CSR Sector in Romania in 2016 and 2017, although fewer companies say that they are involved in CSR projects because these activities bring them both awareness and visibility, equally, fewer say that their corporate social responsibility is part of their sustainability strategy.

But despite this, an increasing number are investing in building stakeholder trust and simultaneously improving their business performance. “For instance, social and environmental criteria are included by an increasing number of companies in the procedures and policies for the selection of suppliers and clients,” says Diaconu of KPMG.

According to the same research conducted by CSR Media and Valoria, 54 percent of firms say that they have a policy on the sustainability of their supply chain that is already implemented. The same research says that for 33 percent of respondents, the sustainability of their supply chain allows them to be cost effective. “Investment decisions are also taken based, among other factors, on sustainability criteria. Environmental impact mitigation, as well as energy and climate change matters represent a criterion for many companies in Romania when developing their business strategy,” says the KPMG representative. “Companies are increasingly aware that sustainability is no longer just a fashionable thing to do; it has to be relevant and really make a difference. Sustainability issues must be embedded in the company’s overall strategy and hence should be relevance-determined based on the field of activity, impact assessment and stakeholder expectations, which are all essential factors to consider to achieve successful strategic design.”

Any company has four major responsibilities: economic, legal, ethical and charitable. While the economic and legal responsibilities are compulsory, the third one is an expectation of the stakeholders, while charity is a request coming from the community. “Romania leaped over the ethical responsibility of a business and we chose the easy way where we assumed some philanthropic responsibilities. This costs us a lot but we don’t understand these costs yet: more expensive financing, bigger operational risks, turnover of personnel and a lack of trust from customers and business partners,” says Tuta of The CSR Agency. He adds that firms that have already understood this loss of synchronism started to make changes that have already shown results. “There are companies that implemented an internal audit process of their sustainability indicators and made public their audit report. The development of the so called ‘culture of sustainability in business’ is rising in Romania but the country is at least five years behind its EU peers. But we hope to quickly narrow this gap,” adds Tuta.

Last year, he decided to launch the Embassy of Sustainability, a platform dedicated exclusively to the promotion of sustainability in the Romanian economic and social environment. It aims to spread the culture of sustainability in Romania by promoting this concept at the political, economic and social level. “We intend to encourage, inspire and motivate companies to develop investments in sustainability in Romania and to offer many more responsible products and services – including the idea to encourage the demand from final consumers for sustainability,” says Tuta. According to him, in the first stage of the initiative, the main objective is to create a community and encourage collaboration. The Embassy includes seven dedicated areas: multimedia gallery, the first library with specialized books in the world, conference room, training room, interview studio, a dedicated area for informal events and a garden.

Last but not least, Diaconu says that in response to the growing awareness of the importance of CSR and sustainable development issues (human rights, workforce diversity, climate change and environmental protection) 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.

Ursus Breweries

Projects in 2017: The “9 months with 0 alcohol” campaign continued last year and aimed to inform consumers of the risks of drinking alcohol during pregnancy. The company continued its partnership with Step by Step and the Federation of NGOs for Kids to develop parental skills within Romanian families with the aim of preventing alcohol consumption among children.

Vodafone Romania

Projects in 2017: The renovation and modernization of an intensive care unit (ICU) for newborns within the Constanta County Hospital (ongoing project). The company continued its Connecting for Good program – which uses technology to tackle some of the problems facing disadvantaged communities – and the Investments in Rural areas one – through which it supports educational projects for children from rural communities. It also invested in renovating and equipping all the blood transfusion centers in Romania and in the largest volunteering initiative of Vodafone Romania Foundation, called Letters to Santa Claus. The Vodafone Romania Foundation invested over RON 7.6 million in CSR projects in 2017.

Lidl Romania

Projects in 2017: It launched the Lidl Community Grants platform, which aims to support projects with a long-term impact in the fields of education and the environment, implemented by NGOs. In 2017, it donated EUR 770,000 to 18 projects. The platform is now on its second round of financing, currently funding 20 NGOs. It invested over EUR 2 million in supporting 45 NGOs and over 60,000 beneficiaries in 2017. The company ran fundraising campaigns for the Fundatia Noi Orizonturi, Greenpeace Romania, Fundatia Leaders and Cercetasii Romaniei. With the help of its clients and employees, it raised RON 580,000. Lidl Romania matched this amount, so almost RON 1.2 million went to fund the NGOs’ missions. In addition, the retailer concluded a number of long-term partnerships, with organizations such as World Vision, SMURD, Save the Children, Padurea Copiilor and Banca de Alimente, which it will continue to support in 2018. Last but not least, Verde la Educatie pentru Circulatie is its road safety education campaign for kids, which it has been organizing since 2013 in partnership with the Romanian Police force.

Kaufland Romania

Projects in 2017: Gradinescu, through which Kaufland Romania launched the first network of urban community gardens by transforming its stores’ roofs and parking lots into small gardens with vegetables, fruits, herbs and flowers that can be used by the community; its involvement in the Big Build initiative to provide a decent home for disadvantaged families along with a contribution of RON 100 per month for 20 years, a sum that covered part of their housing loans; along with Hospice Casa Sperantei it raised money for the hospice social-medical center in Adunatii Copaceni by selling t-shirts and it donated EUR 100,000 to the Atlantic4 team who crossed the Atlantic Ocean in order to raise money for the center. Last but not least, Kaufland Romania donated 8 tonnes of food last Christmas and together with GTC Motorsport and Reality Check Association gave presents worth RON 40,000 to seniors and children from isolated mountain villages in Buzau county. The company invests about EUR 6 million annually in community projects.

Orange Romania

Projects in 2017: Digital Parenting (an awareness campaign for parents), #parintilascoala (a project continued from previous years) – workshops where participants learned the basics of data management and the use of a tablet and smartphone; Digitaliada – a project that aims to promote digital education and improve academic performance by using technology and other digital teaching materials (second edition); SuperCoders (fifth edition) and CodeKids (a program that supports coding activities in Romania, both in urban and rural areas) and Tech a Break events platform.

Coca-Cola HBC Romania

Projects in 2017: The After Us project involves a series of workshops in the Land of Dornas, with local craftsmen, who learned how to use social media to promote their products.

The company also redesigned the eco-touristic circuit at Bigar Waterfall, one of the most spectacular waterfalls in the world.

In parallel, it launched the educational project Youth Empowered, through which the company intends to contribute to the integration of an increasing number of young people in the labor market. The project addresses young people in vulnerable groups and its results will have effects not only for the youngsters, but also for the entire economy, which is facing a deficit of adequately qualified professionals.

Together with Tasuleasa Social, the company launched and organized the Responsible Mountain Hiking School in 2015, a program through which it promotes responsible tourism and the means to safely enjoy hiking while also promoting the natural potential of the Calimani Mountains, the Land of Dornas and their surroundings. The project is ongoing and will take place this year too. Every year, the Coca-Cola System in Romania allots between EUR 700,000 and EUR 1 million to CSR projects.

How does the local CSR market look?

Robert Uzuna, Vice-president of corporate affairs at Ursus Breweries:

“The Romanian CSR market is in line with European and global trends considering its profile and the projects developed here. This is possible through the participation of large players, although their number is relatively limited, for the moment. The positive evolution that we all want will depend first on the anchorage of as many players as possible in the CSR field and second on the substance of the projects undertaken.”

Angela Galeta, Director of the Vodafone Romania Foundation:

“The focus is more and more on the sustainability of the projects financed and on their potential to be implemented in an increasing number of communities. Elsewhere, transparency in CSR activity has gained increasing importance both for the partners included in the programs and the communities which benefit from them, and in general for all parties involved.”

Cristina Hanganu, Communication and CSR director at Lidl Romania:

“Companies are also starting to come out of their areas of direct impact and use their influence to support global solutions for fundamental issues such as climate change, education and human rights.”

Veronica Dogaru, Corporate Communication Manager at Orange Romania:

“The CSR sector is a very specific one and it develops depending on the types of companies, their business vision and the communities where they operate. For sure the sector has increased considerably in recent years. First, the investments made in social programs have increased and companies have understood the need for a CSR strategy to bring them a social impact in the communities where they operate. So it has become easier to identify what company invests in a specific field, because there is a coherence and consistency in its involvement.”

Facts about the local CSR market

55 percent of companies say that they are involved in CSR because it is part of their public relations strategy;
The share of companies that say they have a CSR strategy increased to 86 percent in 2017 from 76 percent in 2016;
42 percent of companies say that their CSR budget has deductible allocations as their main financial resource;
The number of CSR budgets which have increased by 20 to 30 percent is bigger in 2017 than in 2016;
29 percent of companies say that their budget was between EUR 50,000 and 100,000 in 2017;
34 percent of companies develop CSR projects with an average value of maximum EUR 5,000, while 9 percent say that the average value of their projects is over EUR 100,000;
59 percent of companies develop CSR projects nationwide while 34 percent have local CSR projects;
Companies which develop national CSR projects were ranked first in 2017, followed by those with local ones and those with community-based projects;
72 percent of companies supported the community through financial donations and
58 percent have made in-kind donations.

Source: The Dynamic and Perspectives of the CSR sector in Romania in 2016 and 2017 study, conducted by CSR Media and Valoria.

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