Frontier CSR

An example of CSR in Eastern Europe. When we'd become aware of conditions in which disabled chidren were enduring in state care and began raising awaress we had justification in doing so as a business resident in Ukraine since the constitution of the country demands this where harm is being done to the vulnerable.

The extent to which other resident business proclaiming CSR credentials fobbed off our requests for collaboration was something astonishing. Enough to convince me that CSR is mostly about branding and hubris.

In 2008 Sir Richard Branson gave a Davos pitch at the Ukrainian lunch calling on business to focus more on social problems. He even used words from our papers to describe the limits of capitalism when wealth accumulates in the hands of too few people.

http://jm.ly/IePHzC

As he spoke the eptiome of everything we'd been applying business to solve hit the headlines in Ukraine when the only native so far who'd dared, spoke out publicly of a boy he'd been unable to save from malnutrition.

http://jm.ly/8CsRNF

This was a direct consequence of a country stripped of all resources by the uber-wealthy

IKEA is a good example for CSR in Russia. IKEA recently firied two employees in St. Petersburg for bribery has unleashed intense reaction in the business community. Sadly, the real perpetrators in the problem are again left unpunished.
In Tomsk, Medvedev recently mentioned CSR as aspect of new innovative companies, when speaking with university students there. From consumer perspective, the issue is still very new.

We've worked in Eastern Europe as a social enterprise since 1999 when our founder sourced the Tomsk Regional Initiative. We've been in Serbia breifly with most time being spent since in Ukraine with projects for the Crimean Tatars and the work in progress a microeconomic 'Marshall Plan' strategy.

The Tomsk initiative launched aroun 10,000 new businesses and set the model for the Russian Microfinance Center. It was replicated in several other cities.

Like the recent case of Bill Browder, resisting bribery earned my colleague the distinction of becoming an Enemy of the State.

Project details can be found on our website http://jm.ly/opHjKf and this interview may also be interesting in the context.

http://jm.ly/A6gQuV

Jeff

CSR is evolving in CEE, the Caucasus and in Russia. The pace of acceptance is fueled due to the inate 'social conciousness' that is part of the busines landscape inherited from the past. Consider that during the Soviet period, state enterprises in Eastern bloc and CCCP were responsible for most of the social care of their employees. Employees could access to medical care, holiday homes, food from farms falling within the network. From the late 1980s when the first COOPs appeared, to the early 1990s when the first small enterprises emerged, well-being of employees was a key factor in business models. Examine the oprations of the newly companies in region and you will find the similar aspects. CSR issues related to purely enviromental, philanthropic activities, volunteerism emerge in national firms as they mimic the activities of multinationals in the space. However, legal and tax incentives are not tuned to encourage to potential. In Russia, Medvedev has used the 'CSR' term frequently in the past months. However, the for the average consumer across a region where competition is still nascent in most areas the CSR-friendliness of a company has little sway. Khordorkovsky's firm Yukos was a CSR poster-child by Western standards until his arrest and demise of company, but only a few Russians consider he was doing 'all the right things'. Other players, such as Vladimir Potanin, are developing indigenous Russian CSR models. The question as posed is puzzling for the region. There was virtually no legal private business until fairly recently. 'Trust' is a relative term still reserved for a close network of friends and family.

I have worked on CSR projects for multinationals in Latin America and Asia. In developing countries, working for a multinational company is an honor. The best and brightest go to work for GM, DuPont, and other industrials. And whilst most individuals value the pay, perks and recognition of working for these companies, they also have to feel like the company is doing the right thing.

On the other side (the corporate office side), the CST effort is often a risk control measure. Many of the corporate EHS people I worked with were there to make sure that the factories never ended up "on the front page of the New York Times" due to environmental issues.

These companies remember vividly the sums of money they had to spend as a result of Superfund and they don't want to have to pay those sums in other countries in the future. They also remember the hits that Union Carbide had with respect to Bhopal and that Nike got with respect to their Vietnam contract manufacturers.

In sum, I think CSR helps them keep the best talent happy and is a control measure so that social or environmental issues don't cost them millions in the future.

Surprisingly, I think that the answer is a lot more personal. CSR campaigns will have to provide value to the individual in their community because that is how people base their perceptions with business: direct interaction. I might hear Shell is a good company, but if they go into my community to clean up an old unused gas station I will know Shell is a good company. On the flip side, if I receive poor service from an attendant at Border's Bookstore, I will never buy from there again (it's been almost a year since I purchase even a coffee at a Border's). If you're looking to have a sustainable business and increase profit margins you have to compete for your customer's and providing them with value beyond the dollar/good interaction is an investment for a lifetime.