BR Analysis | Companies Embracing Sustainability For A Better Future

Mihai-Alexandru Cristea 02/08/2022 | 12:55

While the level of CSR investments made by companies operating in Romania are proportional to the size of the economy, our country has been evolving in terms of the diversity of projects, their impact, and the creativity of the campaigns, and it is actually delivering good practices to the region in terms of company-led sustainability initiatives. Business Review sat down with several companies that have been highly involved in long-term sustainability programmes in Romania to highlight the main trends on the local market.

By Anda Sebesi

 

The CSR scene in Romania has been growing more mature in recent years, as companies are seeking long-term strategies and not just targeted actions. Directions and trends are still being dictated by large companies, which have clear strategies and objectives set at the global and regional level and adapted to local needs.

“The gap with other European countries will narrow as we are going to see increased involvement from authorities and local companies in the future,” says Mustafa Tiftikcioğlu, CEO at Garanti BBVA. He notes that there is still confusion between CSR and sustainability in Romania, as initiatives under the CSR umbrella are also tools for reputation building. “Sustainability goes beyond CSR and creates both requirements and opportunities for a sustainable future,” he says.

Mustafa Tiftikcioğlu, Garanti BBVA

So far, many companies in Romania have understood the value of a robust CSR strategy, which must be aligned and integrated with their operations, values, and mission. This translates into tangible action programmes in education, environment, and sports—just to name few. “In recent years, there has been growing interest in integrating responsible practices along the entire value chain, up to customer relations and employee well-being. In addition, depending on the company’s community, specific causes such as children’s education and services for disadvantaged groups are addressed more frequently,” Tiftikcioğlu adds.

Mihaela Nita, Public Affairs Manager at Coca-Cola Romania, points out that some years ago, most companies would focus on complying with regulations and investing in initiatives that brought a positive contribution to society. “CSR was somehow referred to as sustainability too, which meant that if legislation did not impose it, operational sustainability investments were seen as mere nice-to-haves. For few years now, we’ve been seeing significant changes,” she says. Specifically talking about the Coca-Cola System, Nita adds that sustainability is addressed by all departments and that it is among the company’s main priorities. CSR remains to be addressed by dedicated teams, with the main focus on making a positive change in communities, in order to leave a better world for the generations to come.

“We take all aspects of the business into account, from products and production to human development, use of resources, waste generation, and responsible marketing,” Nita notes.

Mihaela Niță, Coca-Cola Romania

Alexandra Barroso, Legal and Corporate Affairs Director at Bergenbier SA, says that while until recently, the focus on social responsibilities was mainly seen as a link between business operations and local communities, recent years have shown us how important it is to invest in—and commit to—environmental, social, and sustainability issues.

“Now, people are the ones who expect companies to get involved in the community and actively contribute to its development, and companies pay much more attention to current needs,” she says. And in their CSR approach, companies now tend to start from the idea that success is closely linked to the sustainability of the communities in which they operate.

Alexandra Barroso, Bergenbier SA

“There has been a changeover, from isolated sponsorships and donation projects to complex initiatives that dedicate significant resources to making a positive impact in the community. Organisations have realised that they had both the responsibility and the ability to drive such changes, like never before. Romania is actually delivering good practices to the region from this point of view,” says Ioana Gorganeanu, Head of Marketing and Communication at Mastercard Romania, Croatia, Israel, and the Balkans.

Ioana Gorganeanu, Mastercard

She adds that Romania is also advancing in covering the diversity of sustainability areas—and this is not a random choice of words. “We are happy to see greater openness and action in supporting minorities, women, the LGBTQIA+ community, and more.” Gorganeanu believes that education is the backbone of an evolved society, while financial education particularly nurtures stability and autonomy for individuals and the national economy. “Infrastructure and innovation also rank among critical needs for sustainable local development. As for protecting the environment, it is no less than crucial, if we want a healthy space to live in and a better future,” Gorganeanu adds.

While the level of CSR investments made by companies operating in Romania are proportional to the size of the economy, our country has been evolving in terms of the diversity of projects, their impact, and the creativity of the campaigns.

“We’re now seeing major platforms really driving the change locally: in mindsets, behaviours, and result multiplication. We’re also seeing change in Romanians’ attitude towards recycling, with more and more people becoming aware of their impact and the importance of every gesture in the bigger picture,” says Ileana Dumitru, Legal and External Affairs Director of the Central South Europe Area at BAT.

Ileana Dumitru, BAT

She adds that through BAT’s campaigns so far, over 2 tonnes of cigarette stubs have been prevented from reaching the streets and used in energy recovery in cement factories, and 11,000 of previous versions of glo devices went to recycling. “Still, more effort is necessary in terms of awareness, education, and driving systemic change through small, repetitive individual actions,” she says. Dumitru adds that harm reduction, sustainability, and environmental protection are crucial, while social contribution and irreproachable business ethics and commercial conduct, are also major areas on which companies should focus, now and in the future.

In turn, Alice Nichita, Corporate Affairs & Sustainability Director at Coca-Cola HBC Romania, thinks that our market is keeping up with the global context, as multinational companies are guided by a global strategy and working to make a positive local impact under the global framework. “Moreover, businesses that were developed in Romania, especially in recent years, are looking closely at how they could contribute to tackling social and environmental challenges—and we’re seeing this across all kinds of businesses, from small shops to large music festivals,” Nechita notes. Referring to the Coca-Cola System in Romania, she says that one of the company’s important targets is the 100 percent collection and recycling goal.

“By 2030, we aim to help collect and recycle the equivalent of 100 percent of the packaging we put on the market. Our most recent commitment is reducing emissions across our entire value chain to net zero by 2040.”

Alice Nichita, Coca-Cola HBC Romania

 

ESG: the new wave in sustainability

We often hear about companies in Romania that have created their standalone ESG departments. This is the result of the transition to a sustainable society, which involves systemic changes in organisations and an adequately prepared human resource. Therefore, setting up dedicated departments and training people to support ESG trends over the coming decades is crucial. In addition, the UN Sustainable Development Goals, as defined in 2015, have become a common framework for action for governments, companies, and NGOs. “Creating ESG departments is a major step forward and a proof of the companies’ serious approach towards ESG. For real action and change to take place, the right mindset should always be accompanied by adequate resources—in terms of both financial investments as well as human resources, tools and instruments, technology, and know-how,” Dumitru argues.

“Years ago, ESG used to be a ‘nice-to-have’ department on a company organisational chart; today, it is a must. By integrating ESG practices into its operations, a company can improve long-term performance and manage risk effectively, which ultimately contributes to increasing investor and customer confidence in the company’s future prospects,” says Perry V. Zizzi, Managing Partner at Dentons Romania.

Perry V. Zizzi, Dentons Romania

He adds that climate change, the fallout from the covid-19 pandemic, and now the war in Ukraine have highlighted how unprepared the global economy is for catastrophic change. “Both investors and businesses have catapulted ESG from a marginal issue to one that requires urgent action, and ESG has moved to the forefront of concerns for companies looking to be more conscious of their impact and influence on the environment, on social causes, and corporate governance structure and policies.”

Barosso of Bergenbier thinks that the implementation of ESG will certainly bring a change of vision regarding the role of a company and its impact on the environment and the community in which it operates. “There is also a need for reporting, and companies are going to have to allocate resources,” she says. For example, Oxygen was the first integrated communication agency in Romania to become carbon neutral and it is committed to moving to the next level, where environment and sustainability are priorities. Setting up a sustainability department within the agency, through which Oxygen provides the corporate sector with strategic consultancy and communication on sustainability, has been a major step in this direction. This move is part of Oxygen’s commitment to fight against climate change and support companies in taking steps towards creating a business environment that is more focused on sustainable development.

“We feel that it’s no longer enough to talk about sustainability. We operate in an industry that has the power to change society. But for this to happen, we need to act and contribute to systemic changes both for ourselves and for our clients and partners,” says Irina Manole, Head of Sustainability and CSR at Oxygen, who will coordinate the agency’s new sustainability department.

Both the agency and its 70 employees in Bucharest and Cluj-Napoca have become carbon neutral. The process had two stages: the calculation of the agency’s 2021 carbon footprint and its neutralisation thorugh the acquisition of equivalent carbon credits from the voluntary carbon market.

 

What are companies doing?

In 2020, BAT embarked on a mission to build A Better Tomorrow, which implies a consistent transformation journey, with ESG (Environmental, Social, and Governance) principles as key pillars of the process. “From the global to the local level, our approach is very clear: reducing the health impact of our business is our main focus area, and so is placing a greater emphasis on the importance of addressing climate change and environmental management. At the same time, we remain committed to delivering a positive social impact and ensuring robust corporate governance across the Group,” says Dumitru of BAT. She adds that last year, more than 18.3 million adult consumers worldwide chose BAT’s non-combustible products (4.8 million more than in the previous year), which is a major step forward in supporting tobacco harm reduction policies, a transition towards reduced risk alternatives (based on the weight of evidence and assuming a complete switch from cigarette smoking; these products are not risk-free and are addictive). Also, the highlights of  BAT`s environmental progress include a 42.7 percent reduction in Scope 1 and 2 CO2 emissions in 2021 versus the 2017 baseline and 64.4 percent of renewable electricity sourced for its operations sites.

As for the Coca-Cola System in Romania, Nita says that its sustainability approach remains consistent: the company remains connected to its strategic priorities: A World Without Waste, leadership for water, actions to reduce emissions and fight against climate change, reducing the sugar content of its beverages while providing options across its portfolio, supporting its people and communities. “However, if we were to speak about changes, we believe that the way we communicate about sustainability has changed in the last few years. Our brands have integrated messages and calls to action to the general audience. Also, corporate communication is mainly about sustainability, and we are trying to make our messages as simple as possible for our audiences and get them engaged with our initiatives,” Nita concludes.

Barosso of Bergenbier says that in recent years, the company has adopted a clear focus on sustainability. “Through our actions aimed at protecting the resources we use, we contribute to the preservation of a sustainable environment. In recent years, we have continuously streamlined the consumption of utilities and we have managed to increase the share of recovered waste by focusing on cutting carbon emissions.” In addition, the company has implemented a water management system in its factory which allows used water to be treated and to re-enter a new circuit, thus improving the efficiency of water consumption. Last but not least, Bergenbier has promoted responsible alcohol consumption through campaigns that have generated a positive impact in its communities, and it has also implemented “Cool down and reforest!,” one of the largest reforestation projects, which was initiated 5 years ago.

 

Is the future looking bright?

“We hope to see closer collaboration between the private sector, authorities, and NGOs and a greater openness among companies for non-financial reporting. We also want to see relevance and impact in sustainability initiatives, as companies should correctly identify social and environmental issues that are specific to their business sector, and act based on the 2030 Sustainable Development Goals Agenda,” Tiftikcioğlu states, adding that the future is full of legislative and operational challenges that we all need to address.

“The pressure of climate change is growing, so authorities will be putting even more pressure on companies to integrate ESG factors into their business agendas,” says the CEO of Garanti BBVA.

Along the same lines, Dumitru of BAT says that advancing on the sustainability path requires a multi-stakeholder approach, and it’s crucial to have a concerted effort from corporate actors, public stakeholders who are responsible for a balanced and efficient regulatory framework, the media, civil society, and individuals. “Investors can do it best by backing companies that can make a difference, those that are committed to transforming the industry and operating to the highest standards. Our stretching targets in harm reduction and ESG are a marker of our commitment,” says Dumitru. Barroso of Bergenbier thinks that the local CSR market will grow in the near future as the circular economy becomes a must-have for companies.

In terms of the development of the local CSR market, Zizzi says that we are currently witnessing significant changes on each and every level, from the political, social, and economic points of view. In this global context, Romania will be forced to initiate strong reforms to comply with EU requirements. “Companies are acting on CSR initiatives and ESG projects as well as on implementing sustainable development goals (SDG), and all of these must be part of the economic recovery,” he says.

CSR is a type of business self-regulation, in the name of social accountability and making a positive impact on society, including—but not limited to—being environmentally friendly and eco-conscious, promoting equality, diversity, and inclusion in the workplace, giving back to the community and ensuring business decisions are ethical. “Redefining CSR in order to fully incorporate ESG objectives and gradual SDG implementation is the natural step forward for companies that want to differentiate themselves on the market, to contribute efficiently to the circular economy, and to have a strong long-term business strategy that goes beyond profitability, growth rate, and brand recognition. In fact, building a circular economy is a corporate social responsibility,” Zizzi of Dentons concludes.

 

BAT

The “Choose Responsibly for a Clean City” campaign, 4th edition in 2021 – Environmental awareness campaigns, mostly focused on responsible waste management and the relevance of small individual gestures for the environment and our cities

Selective collection and recycling of the previous versions of glo – in the first year of the campaign, over 11,000 devices have been collected for recycling

Setting up 5 solar trees in central areas of Bucharest in 2021 – a source of green energy for charging electronic devices and also serving as an eco-sustainable urban furniture solution and a free Wi-Fi spot

The “Choose Responsibly a Clean Commercial Behaviour” campaign to inform and educate retailers and consumers about the legal provisions, as well as the reasons why under 18s should not have access to nicotine products

The Stop Contraband platform (www.stopcontrabanda.ro) – the first real – time integrator of illegal cigarette seizures by Romanian authorities and one of the main sources of information for media and consumers; BAT’s platform driving awareness campaigns about the severe effects of illicit trade on economic and community development, as well as consumers’ safety

Supporting annual programmes that facilitate access to national culture, history, and public spaces, by investing about EUR 1 million each year (Electric Castle, SummerWell, Romanian Creative Week, Strada de C’Arte).

 

Mastercard Romania

Hot Meals (2021). A national project, developed together with Edenred and Sodexo, that reached over 300,000 elderly and vulnerable people. It led to more than 2,000 POS devices being installed in rural areas, adding to the country’s financial inclusion and education levels. Due to these outcomes, it is considered to be a best practice by the European Commission.

A Better Future platform. Started in 2019, when Mastercard became the technology partner of the Give Life Association. Since then the company has contributed through exposure, funding, technology, as well as international academic and healthcare know-how.

Since 2015, Mastercard has been the main partner of APPE, the Association that initiated “Financial Education in Schools”. The initiative provided textbooks and all the required infrastructure for students in schools from all over Romania to have access to the optional class within the annual academic curricula.

Making a major contribution to digitalization and meeting smart city standards in the country. In terms of public transportation, the company’s technologies allow cardholders to pay for tickets digitally when travelling on busses, trams, subway or trains.

In 2021, Mastercard launched Carbon Calculator, an instrument embedded in its global network that allows banks to adopt and personalise solutions for clients who want to stay informed about their spendings’ impact on the environment.

 

The Coca-Cola System in Romania

rPET portfolio: In 2020, the Coca-Cola System started bottling the Dorna natural mineral waters in rPET¬—100 percent recycled PET. In a year of consumers choosing Dorna, 5,000 tonnes of new plastic are no longer produced, the equivalent of the weight of 400 trucks or 70 planes. Since 2021, 20 percent of the Coca-Cola System’s beverage portfolio has been bottled in rPET.

Keel Clip: (April 2021) Implemented in the System’s Timisoara plant, the new technology received an investment of EUR 2 million and through it, the amount of plastic in foils is reduced by approximately 200 tonnes per year. It also reduces the amount of energy used during production by 15 percent.

Garla Mare-Vrata ecological restoration. For over 8 years, WWF-CEE and The Coca-Cola Foundation have been engaged in the Living Danube Partnership, whose vision is to restore wetlands and floodplains along the Danube and its tributaries. The programme is carried out in 6 countries, including Romania, where over 400 hectares of floodplain located between the Garla Mare and Vrata localities (Mehedinti county) were recently returned to nature, following reconstruction works that reconnected the ponds on the Danube bank with the river.

Today for a Tomorrow Without Waste. Launched in 2019 by the CSR Nest Association and funded by the Coca-Cola Foundation, Today for Tomorrow is a platform that aims to encourage the circular economy, with a focus on recycling. Currently, the platform’s initiatives are aimed at bringing together all relevant actors who need to collaborate in order to implement the selective waste collection system in Romania, enabling individuals and legal entities to create partnerships with local authorities and waste collectors. So far, the platform has supported schools, hospitality operators, and citizens in implementing separate collection systems. The platform has also issued a guide on selective waste collection.

Sustainable Futures. A project developed by Social Innovation Solutions, supported by The Coca-Cola Foundation and co-organised alongside Global Shapers Bucharest Hub. The project aims to raise understanding and awareness of the importance of sustainable business-making and the circular economy as key drivers of future progress in Romania, while also providing concrete solutions for implementation.

After us, it’s on us to collect: partnerships with customers for selective collection. “Eco-Bon” – a pilot project developed in Brasov, in 3 Penny stores, resulted in 14,000 PET bottles collected; in the four months over which the “Pet-Collect” campaign was rolled out, more than 1,500 Romanians brought a total of 86,325 PET plastic packaging in the collection spaces placed in Auchan stores throughout the country; “Pay with a PET,” the partnership with Carrefour, was also very successful, with over 15,000 participants and 291,000 PET bottles collected.

I’m Working Again (Lucrez din Nou). Launched in December 2020 by the Social Incubator Association, in partnership with Coca-Cola HBC Romania, the Working Again (Lucrez din nou) programme is the first online professional retraining platform that aims to help those who have lost their jobs in the difficult context created by the covid-19 pandemic. The platform offers a diverse range of tools, such as vocational counseling, career tests, video trainings, and resources for those who want to improve their resume—all free of charge. By 2021, over 560 people had found new jobs, over 7,300 platform users were registered with an account on the platform (enjoying the open resources), 200 users were receiving counseling and training, and the platform had 151,000 unique visitors.

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Mihai-Alexandru Cristea | 02/08/2022 | 10:15

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