Issuu on Google+


BBK 65.050.2

Zinchenko A.G., Saprykina M.A. Corporate social responsibility 2005-2010: status and development prospective. – K.: “Farbovaniy lyst”, 2010 – 56 p.

An analytic report of Centre for CSR Development is based on results of survey among 600 top-managers in Ukraine conducted in April-June, 2010 within the framework of the National CSR Development Agenda Project. The survey was partly supported by Global Compact Network Ukraine, Royal Norwegian Embassy in Ukraine, and companies: Kyivstar, Microsoft Ukraine and DTEK. The report analyzes changes in perception of corporate social responsibility, intensity and priorities of its implementation, responsible corporate practices, obstacles and prospective of CSR development in Ukraine. In addition, report demonstrates CSR performance of the company depending on its size, forms of ownership, sector and region company operates in – these characteristics give the overall picture of corporate social responsibility development in Ukraine during 2005-2010, major current and future trends. Survey results can be useful for different stakeholders (such as public authorities, business companies, research institutions and universities, public and non-governmental organizations) to promote CSR in Ukrainian society.

BBK 65.050.2 © Zinchenko A.G., Saprykina M.A. © Centre for CSR Development, 2010

This publication is prepared by Centre for CSR Development within the project “Ukraine National Initiatives to Enhance Reforms (UNITER)” which is financed by the United States Agency for International Development (USAID) and is implemented by Pact Inc. Preparation of the publication is possible with the sincere support of the American people that was given by the United States Agency for International Development (USAID). Content of the publication is an exclusive responsibility of Centre for CSR Development and does not necessarily represent the views of USAID, Pact or U.S. Government. Reproduction and exploitation of any part of this publication in any format, including graphic, electronic, copying or exploitation in any other way without the reference to the original source is prohibited.


ANALYTICAL REPORT BASED ON THE RESULTS OF THE REVIEW

CORPORATE SOCIAL RESPONSIBILITY 2005-2010: STATUS AND DEVELOPMENT PERSPECTIVE

1


INTRODUCTION Ukraine’s transition to a stable economic development, its integration into the European and global communities, require new practices of cooperation between the state and business, as well as business and society, which would make it possible to enhance the mutual responsibility of all those participating in social life and to produce a new environment for the future stable development of the state and society, taking into account the widest possible interests. Today, the «corporate social responsibility» (CSR) concept is widely implemented in the economically most developed countries of the world. It is perceived as “a concept under which companies integrate social and environmental matters into their commercial activities and their cooperation with the interested parties on a voluntary basis”. Thus, CSR is a voluntary activity of private and public companies aimed at following the high standards of operational and manufacturing activities, social standards and quality of work with personnel, minimizing harmful impact on the environment, etc in order to level the existing economic and social disparities, create trustful relations between business, society and the state. At present, social corporate responsibility of businesses is a common rule followed by most large, medium-sized and small companies around the world. CSR in Ukraine is at the formative stage. The most active entities in this area include, first and foremost, the representative offices of foreign companies, which introduce new global practices, principles, and standards to Ukrainian society, as well as the largest Ukrainian companies. With the purpose of analyzing CSR in Ukraine over the period of 2005-2010 and determining the development perspective of the concept in the future, the Centre of CSR Development initiated a representative review «Corporate Social Responsibility: Status and Development Perspective», which will make it possible to determine the present CSR condition and development perspective, problems and methods of resolving them. The Centre of CSR Development hopes that the results of the review will lay foundations for preparing the National CSR Strategy in Ukraine and used to promote the CSR concept in Ukrainian society by various stakeholders: public authorities, business companies, research institutions and universities, nongovernmental and international organizations. Sincerely yours, Maryna Saprykina, Centre of CSR Development

2


ABOUT THE REVIEW The two year long project “Development of the National Corporate Social Responsibility (CSR) Agenda” under the auspices of the “Let Us Unite for Reforms” Program (UNITER), PACT. Inc., stipulates creation of a favorable environment in Ukraine for social responsibility development. For this purpose, it is necessary to understand today’s environment in Ukraine, as well as the encouraging and constraining factors which have had an impact on CSR development between 2005 to 2010. The project’s objectives include raising awareness of CSR at the national and regional levels; developing organizations in CSR implementation; and developing the national corporate social responsibility development strategy for the period 2011-2015. Seventeen main activities are planned under the project: one of the key activities is a representative survey of CSR awareness. In this review, we used an analytical report of the 2005 survey, which was ordered by the UN System Coordinator Office in Ukraine, covering the latest trends in the social responsibility of businesses and application of the results as a basis for promoting the social responsibility concept in the Ukrainian business environment. This analytical report was also based on other surveys conducted by the Centre of CSR Development, for example, those dedicated to the CSR development among small and medium-sized businesses. At the same time, it is distinguished by a higher insight into social responsibility based on the new ISO 26000 international social responsibility management standard. Furthermore, the relevant current events taking place in Ukraine have been reflected in the responses, namely: development of the National CSR Strategy, the national social responsibility standard, etc. This report presents an analysis of the social responsibility understanding, intensity, social responsibility implementation priorities and corporate practices, incentives, obstacles, and the CSR development perspective in Ukraine. The report also analyzes the specific features depending on the size of businesses, ownership forms, sectors of the economy and the region. All of this shapes a general image of social responsibility development in Ukraine over the period from 2005 to 2010, its trends and its future.

Acknowledgments: The report is based on the results of a survey of 600 companies in Ukraine conducted by the Ukrainian Marketing Group, which surveyed the social responsibility development in 20051. This report has been prepared by the “Corporate Social Responsibility Development” Centre (Maryna Saprykina and Alla Zinchenko). It has been edited by Maryna Saprykina. The authors are grateful to all the staff of the Centre of CSR Development and the Global Compact Office in Ukraine for providing the 2005 questionnaire sample. Financial support was provided by the “Let Us Unite for Reforms” Program (UNITER), PACT, Inc., Kyivstar, Microsoft Ukraine, and DTEK, to which we are sincerely grateful.

1

Survey “Social Responsibility among Ukrainian Businesses: Survey Results”, Kyiv, 2005, 52 p., KIT publishing house.

3


UN Global Compact since its foundation in 2000 has become the world’s largest initiative in the area of corporate sustainability. With over 7 700 corporate participants from more than 130 countries, Global Compact successfully continues to further stimulate companies and organizations all over the world to embrace, support and enact 10 universal principles in the areas of human rights, environment, labour relations and anti-corruption. In order to root Global Compact values and principles within different national contexts, the initiative operates through Local Networks. Global Compact Network Ukraine was established with the help of the United Nations Office in Ukraine in 2006. Since then the Network assists Ukrainian businesses and other social actors in the challenge to apply the Global Compact principles and has established the biggest policy platform for corporate social responsibility in the country. Global Compact Network Ukraine facilitates the ongoing journey of Ukrainian businesses in developing unique solutions to the social and environmental issues. Ukrainian Global Compact Network provides its members with a number of engagement opportunities such as learning and capacity building events; COP guidance; informational and communication support; opportunity to influence public policy in the area of CSR and further develop innovative and creative solutions in social and environmental challenges. The important part of the journey towards sustainable future is research which has always been a priority for Global Compact Network Ukraine. Partnership in the survey at hand reflected this strategic goal and provided an opportunity to benchmark the developments in the CSR landscape of the country since 2005, when the first CSR survey commissioned by the United Nations in Ukraine was conducted. The results of the survey presented in this report will provide an insight into the current state of CSR awareness and engagement in Ukraine, which Global Compact Network Ukraine has been and will further promote and enhance in line with the core philosophy of the initiative “thinking globally and acting locally�. Global Compact Network Ukraine

4


Kyivstar Successful and long-term business is possible in a stable and harmonious society only. Kyivstar has realized this obvious axiom since the very beginning of our activities. For this reason, a responsible and careful attitude to the principles of doing our business and the needs of society has become a rule of our activities and is now a system and balanced work in the area of corporate social responsibility of Kyivstar and promotion of socially responsible approach to doing business in Ukraine. The results of the Corporate Social Responsibility 2005-2010: Status and Development Perspective survey have attested to positive achievements in realizing CSR by Ukrainian businesses. This can be evidenced by the fact that large companies have become increasingly aware of CSR. We hope that the next 5 years will be more efficient in promoting the concepts and practices of socially responsible business in Ukraine.

Microsoft Ukraine has been working on programs of corporate social responsibility since 2003 - from the very beginning of its operation in Ukraine. We work to overcome computer illiteracy, provide high-quality technical education in the country, promote the development of innovation; we were the first who has addressed the problem of children’s safety online. Over the years many companies working on the Ukrainian market realized the need to conduct business responsibly and to undertake the voluntary commitment to develop a society in which we all operate. This survey was intended to show how different companies from all areas of business in Ukraine have changed the attitude to CSR; what they’ve already done in this area and what they’re still going to do. Microsoft Ukraine has supported the survey because we see the value of CSR which is so engrained into our own corporate culture. We believe it’s a fundamental pillar of business, and we welcome the trend of increased CSR development among companies in Ukraine.

Zhanna Revnova, Corporate Relation Department Director

Courtney Zukoski, Director of Academic and CSR Programs, Microsoft Ukraine

DTEK aspires to be a leader in both business and relations with society. We are confident that corporate social responsibility is an integral component of the Company’s sustainable development. We are also aware how important the dialogue between business, society, and the government is. This dialogue will help us all better realize the world we would like to live in and the world our children and grandchildren will live in. We believe that the “Corporate Social Responsibility 2005-2010: Status and Development Perspective” analytical report is an important basis for promoting a positive dialogue and cooperation between business, the government, and society for the future stable development. Victoria Grib, CSR manager, DTEK

5


6


CONTENT METHODOLOGY

9

1. UNDERSTANDING SOCIAL RESPONSIBILITY

13

1.1. SOCIAL RESPONSIBILITY AWARENESS LEVEL 1.2. UNDERSTANDING THE TERM “SOCIAL RESPONSIBILITY” 1.3. ROLE OF BUSINESS IN RESOLVING SOCIAL AND ENVIRONMENTAL PROBLEMS OF SOCIETY 1.4. CORPORATE SOCIAL RESPONSIBILITY ROLE IN BUSINESS PRACTICES Conclusions 1

13 14 16 17 19

2. INTENSITY AND PRIORITIES OF SOCIAL RESPONSIBILITY IMPLEMENTATION

20

2.1. IMPLEMENTATION OF SOCIALLY RESPONSIBLE EVENTS 2.2. SOCIAL RESPONSIBILITY MEASURES 2.3. REGULARITY OF SOCIALLY RESPONSIBLE PRACTICES 2.4. FACTORS ENCOURAGING COMPANIES TO IMPLEMENT SOCIALLY RESPONSIBLE PRACTICES 2.5. OBSTACLES FOR SOCIAL RESPONSIBILITY IMPLEMENTATION Conclusions 2

20 21 22 23 25 27

3. SOCIAL RESPONSIBILITY PRACTICES

28

3.1. ORGANIZATIONAL MANAGEMENT 3.1.1. Company Openness 3.1.2. Company’s Mission, Values, and Codes of Conduct 3.1.3. Social Responsibility Strategy and Financing 3.1.4. Anti-Corruption Measures 3.2. HUMAN RIGHTS AND LABOUR PRACTICES 3.2.1. Contribution to Associations of Companies’ Personnel 3.2.3. Program of Balance between Family and Work 3.3. RESPONSIBILITY TO THE COMMUNITY 3.4. ENVIRONMENTAL RESPONSIBILITY 3.5. CONSUMER TREATMENT 3.6. TAKING INTO ACCOUNT THE COMPANIES’ STAKEHOLDER INTEREST. DIALOGUE WITH STAKEHOLDERS 3.7. SOCIAL RESPONSIBILITY IMPLEMENTATION EFFICIENCY Conclusions 3

28 28 29 29 30 31 32 34 35 37 39

4. SOCIAL RESPONSIBILITY IMPLEMENTATION PERSPECTIVES

47

Conclusions 4

51

5. CONCLUSIONS

52

LIST OF TABLES AND DIAGRAMS

56

41 43 45

7


8


METHODOLOGY This Report has been prepared according to the results of the survey of 600 companies in Ukraine (senior management or managers of the relevant departments) by using the individual interview method. Almost half of the surveyed respondents (49.5%) were company managers. Respondents possessed at least 70% of information (survey requirements) about each of the following areas: the company’s relations with the community, the environmental aspects of the company’s activities, and the company’s performance in the corporate social responsibility (CSR) area, which permitted us to derive more unbiased data about each of the questions. The survey’s key objective included revealing changes in the corporate social responsibility development trends at the present stage of the country’s development. The survey’s goals included finding out how CSR is perceived and implemented by the companies operating in Ukraine, how managers assess the incentives and the largest obstacles in implementing CSR programs, and identifying CSR development perspectives in Ukraine. The Ukrainian Marketing Group, an international research company, was selected to conduct the survey based on tender results; it carried out the survey of the social responsibility development in 2005 . The analysts of the “Corporate Social Responsibility Development” Centre have analyzed the survey results. Company representatives were polled in April and May 2010, using the 2005 survey methods, which makes it possible to compare the main trends of the social responsibility development. Selection criteria The selection design (structure and conformity to the sectoral distribution, the size of the companies and the region) has been developed on the basis of the 2005 survey parameters. The survey has been conducted according to the quota selection, whose formation was based on the following criteria: 1. Sectoral (industry) distribution: 10 sectors of the economy: 10 sectors of the economy • agriculture (namely agriculture, fish farms, farms, forestry companies, grain depots, etc); • consumption goods manufacture (food products, textile products, home electronics and devices, car making, furniture, household chemicals manufacturing, and production of other goods); • industrial manufacture of industrial purpose products (iron-and-steel industry, mineral extraction, chemical industry, coal and other products, not belonging to consumer goods); • construction: any activities related to the construction or reconstruction of buildings (except office and apartment decoration, manufacturing and sale of building materials); • financial services, banking activities (banks, credit societies, insurers, pawn offices, money transfer, and other services); • trade, commerce (wholesale and retail trade, goods sale, car sale, other equipment and goods sale, ticket sale); • transport (transport companies, car fleets, taxi, railway, transport forwarding companies, transport service provision); • communication (telephone, mobile, mail, Internet, special communication, etc); • household public utility services (repair, dry-cleaning, workshops, other profitable companies providing services to the population, except local building-utilities administrator offices); • other services (media, consulting, legal, marketing, travel services, paid education, paid medical services, etc, except commerce).

2

Survey .

9


2. Cities or regions when surveying the agricultural sector companies. The survey has been conducted in the six most economically developed regions of Ukraine (Kyiv, Kharkiv, Lviv, Dnipropetrovsk, Donetsk, and Odesa), which were selected to participate in the 2005 survey. 3. Company size: three groups including small, medium-sized, and large companies. Based on the size, the groups were identified in the course of conducting the 2005 survey according to the headcount criteria. Thus, small companies have been defined as companies employing less than 50 employees, medium-sized companies employ 50 to 250 employees, and large companies employ over 250 people. The report has also distinguished two categories of large companies: those employing 251 to 500 people and those with a headcount of more than 500 employees, in order to make a deeper analysis of variation in the groups based on the size. Classification of companies by the sectors of the economy and regions reflects classification of companies according to the data of the State Statistics Committee for 20043. Within each sector of the economy, the entire number of companies has been classified into three equal groups based on the size: large, medium-sized, and small companies. According to the ownership type, the quota was established in 2005: 92% are private companies and 8% are public companies. The selection parameters are shown in Table 1. Table 1. Selection Parameters Sectors of the economy

%

Agriculture

8,2

Consumption goods manufacture

12,3

Industrial manufacture of industrial purpose products

8,8

Construction

8,5

Financial and banking services

8,5

Commerce

17,3

Transport

7,7

Communication

7,7

Household and public utility services Other services (media, consulting, tourism, catering, hotel business, legal services, etc)

12,0 9,0

Region Kyiv

21,5

Lviv

14,5

Dnipropetrovsk

13,3

Donetsk

19,7

Odesa

15,0

Kharkiv

16,0

Company size Under 50 employees

37,0

From 50 to 250 employees

33,3

From 251 to 500 employees

20,0

Over 500 employees

9,7

Survey questionnaire The questionnaire included groups of questions, answers to which permitted us to study changes that have happened for the last five years: • in the degree of social responsibility awareness; • understanding of the social responsibility essence; 3

10

Survey “Social Responsibility among Ukrainian Businesses: Survey Results”, Kyiv, 2005, 52 p., KIT publishing house.


• implementation of CSR policies and practices in relations with personnel; community; in organizational management; in relations with consumers; and the environmental responsibility of companies. The questionnaire also included questions about the limits, incentives and perspectives of social responsibility development in Ukraine. In the course of the survey, the 2005 questionnaire has been modified and amended, taking into account the present level of the social responsibility perception. Thus, for example, the question “Has your company provided any charity assistance for the last three years?” has been replaced with: “Has your company made any social investments for the last five years?” Equally, the question “Did your company develop a plan (or a strategy) of social events in 2005?” is now: “Does your company have a social responsibility strategy?” The 2010 questionnaire also included the following additional questions: • What forms of personnel associations exist in your company? • Do women and men have equal working conditions in your company? • What practices for work and family balance are implemented in your company? • Has your company prepared social (non-financial) reports for the last five years? • Does your company take into account the interests of the following parties when developing and implementing the social responsibility policy: government authorities, business organizations, trade unions and other associations of employees, consumers, non-governmental organizations, research organizations and education institutions? Selection error and shortcomings The shortcomings of this survey have been inherited from the 2005 survey and are related to the selection design. Selection has been based on the 2005 survey parameters; for this reason, it covers only the six most industrial cities/regions of Ukraine. In what regards social responsibility programs/events are being implemented in other parts of the country we can only make assumptions. Besides, the quota selection is not representative of the general group (six regions). In 2010, we surveyed representatives from 600 companies in the country. The representative data have been derived after weighing. The selection error for the representative data derived after weighing indicators is not higher than 4%. The selection error is not determined for the quota selection as it is not a random selection. It should be also emphasized that, unlike the more favourable environment of 2005, the 2010 survey has been conducted in the aftermath of the 2008 – 2009 financial and economic crisis in Ukraine, which has had a great impact on the social responsibility policy and implementation practices, in particular for small and medium-sized businesses. Data analysis The data analysis has been based on the weighed data (questions included for the first time in the 2010 questionnaire as compared to 2005 have been weighed according to the 2009 statistical data). For this reason, the average data in terms of the specific parameters do not coincide with the data presented in the general selection. The questionnaire also included questions with answers supporting more than one proposed variants; so the total percentage amount exceeds 100% for most data shown in the report and the tables (see the Annex). It should be noted that the proposed report must be seen as the first summary of changes happening in the main trends of the corporate social responsibility as compared to 2005 (quality changes), and not the quantity image of the social responsibility development in the country.

11


12


1. UNDERSTANDING SOCIAL RESPONSIBILITY 1.1. SOCIAL RESPONSIBILITY AWARENESS LEVEL As compared to 2005, in general the social responsibility awareness level has not changed in the country for the last five years. According to researchers, the factors which have had an impact on these indicators include: Most respondents (in 2005: 78.1%, in the 2008 – 2009 financial and economic crisis in 2010: 76.3%) heard about the concept Ukraine; the commercialization of relationships of social responsibility of businesses between media companies concerning the CSR against 21.9%, to which this concept was unknown in 2005, and 23.7% in 2010 press-release placement between 2005 and 2010; respectively. individual understanding of “social responsibility” by the respondents. However, during the last five years important changes have happened on social responsibility awareness depending on the size of companies, the location of companies, and the field of their activities. While in 2005 researchers revealed no dependence of the social responsibility awareness level on the size of companies (small companies: 78.1%, medium-sized companies: 78.5%, and large companies: 79.2%), in 2010 there can be seen a direct dependence: the larger a company is, the higher awareness level it has (see Table 1.1.). Table 1.1. Social Responsibility Awareness of Companies in Terms of the Company Size,

% (N=600) Under 50 employees

From 50 to 250 employees

From 251 to 500 employees

Over 500 employees

Total

Heard of the concept of socia responsibility of businesses

75

86,9

91,8

98,1

76,3

Never heard of the concept of social responsibility of businesses

25

13,1

8,2

1,9

23,7

Regional aspect There has remained a large gap of the level of awareness between the regions for the last few years (see Table 1.2.). As compared to 2005, the awareness level has changed depending on the location of a company: thus, while in 2005 it was the lowest in Lviv and Lviv regions, it has become one of the highest in 2010. Odesa and Odesa regions are characterized by a high level of awareness as well. Table 1.2. Social Responsibility Awareness Depending on the Region, % (N=600) Region

Heard of the concept of social responsibility of businesses 2005

2010

Kyiv and Kyiv Region

90,7

71,3

Lviv and Lviv Region

62,9

94,7

Dnipropetrovsk and Dnipropetrovsk Region

77,1

72,7

Donetsk and Donetsk Region

61,5

75,8

Odesa and Odesa Region

72,6

95,5

Kharkiv and Kharkiv Region

73,6

66,1

13


Line of business of companies The highest social responsibility awareness level is typical of companies involved in construction, communication, companies belonging to the media category, companies providing consulting, legal, catering, and hotel services. The least aware companies operate in the field of industrial and consumer goods manufacturing and commerce. Ownership type Just as in 2005, a company’s ownership type has no impact on the actual level of the social responsibility awareness of companies. State-owned and joint-stock companies are slightly ahead of private companies.

1.2. UNDERSTANDING THE TERM “SOCIAL RESPONSIBILITY” The social responsibility of a company is normally seen as providing charity assistance to the community; development of the company’s personnel; fair business practices; compliance with and protection of human rights. Implementation of the reporting principles and practices, transparency and ethical conduct, implementation of environmental projects and participation in regional development projects are least associated with social responsibility. Figure 1.1. Classification of Respondents’ Answers to the Question “What does the social responsibility of businesses mean?”, %, N =600.

Principles of the ethical and responsible attitude to consumers used in the company's policy

42,3

Implementation of environmental projects

30,7

Participation in the regional development programs

30,5

Implementation of the reporting principles and practices, transparency, and ethical conduct

24,5 0

40 35 30 25

10

20

30

40

50

The social responsibility awareness level has not practically changed in comparison with 2005: - the number of companies, for which social responsibility means charity assistance provided to the community and development of their personnel, has remained quite high for the last five Businesses must years; secure profits - in 2005 and in 2010, one third of companies associate implementation of environmental for their owners projects and participation in regional development projects with social responsibility; and pay taxes only - the lowest number of companies both in 2005 and 2010 associate social responsibility with the company’s transparency. Businesses must

take an active role in resolving social Regional aspect and environmental 15In 2010, as compared to 2005, there are important regional differences between problems of society the understanding and community life of social responsibility. More than half of companies located in Donetsk referred all the proposed 10 20

5

14

0

Absolutely

Rather agree

Neither agree

Rather agree

Absolutely


components of social responsibility to social responsibility (I don’t understand this sentence), which can attest to a high level of awareness and an insight into social responsibility. For example, the social responsibility component (such as implementation of reporting, transparency, and ethical conduct principles and practices) was chosen by a number of Donetsk region companies, which is 2.5 times higher than in general for the selection. At the same time, we could state that social responsibility is superficially perceived/understood by the companies located in the Odesa region, because the number of companies in the region, which equated implementation of environmental projects, implementation of the principles of ethical and responsible attitude to consumers in the company’s policy, development of the company’s personnel, and participation in the regional development programs to social responsibility, was several times lower than in general for the selection. This can be explained by the regional specifics and the economic status of the regions. Companies incorporated into large financial and industrial groups are located in the Donetsk region; their policies and practices (including social responsibility policies and practices) have a large impact on other companies operating in the region. Company size The 2005 and 2010 survey results also show differing understanding of social responsibility depending on the company size. Thus, as companies grow in size, the number of companies increases for whom social responsibility includes components such as implementation of reporting, transparency and ethical conduct principles and practices; implementation of the principles of ethical and responsible attitude to consumers in the company’s policy’; implementation of environmental projects; and participation in the regional development programs. This attests again to a gap between large companies and medium-sized and small companies4 in the way they understand and implement social responsibility. Ownership types The analysis of answers given by Ukrainian companies about the main components of social responsibility has revealed no important differences in terms of ownership types, except two components: 1. the number of state-owned companies believing that fair business practices are a component of the social responsibility concept is 1.5 times lower than the number of companies with other ownership types. 2. the number of state-owned companies, for which implementation of environmental projects is part of the company’s social responsibility, is twice lower than the number of joint-stock companies. It should be underlined that, in comparison with 2005, the number of state-owned companies, believing that implementation of environmental projects is part of social responsibility, dropped to a large extent: from 78.2% in 2005 to 27.8% in 2010. Field of activities Based on the results of the data obtained, a conclusion about the impact of the specifics of the field of activities on the social responsibility understanding can be made. Thus, the largest number of companies, for which implementation of environmental projects is part of social responsibility, operate in the sector of industrial consumption, product manufacture and finance. Fair business practices are considered to be a component of social responsibility by primarily companies involved in commerce, provision of household and public utility services, probably in large part due to the competitiveness of the markets for these products. The largest number of companies providing consulting, legal, and travel services, the media, companies involved in the catering and hotel business, as compared to companies operating in other fields, believe that care for personnel is part of social responsibility: recruitment and retention of the personnel is the most important objective for this category of businesses, because people have an impact on the success of their business.

4

“Corporate Social Responsibility among Small and Medium-Sized Businesses” expert survey conducted by the Centre of CSR Development

15


1.3. ROLE OF BUSINESS IN RESOLVING SOCIAL AND ENVIRONMENTAL PROBLEMS OF SOCIETY The attitude of companies to social responsibility has a direct impact on the social responsibility policy implementation. The survey results recorded important changes in the attitude of Ukrainian companies to an understanding that they have to take an active part in resolving social and environmental problems, and not rely on the government alone. Thus, the number of respondents who agree with the statement that “businesses should take an active part in resolving social and environmental problems of society and life of the community” (answers “absolutely agree” and “rather agree” in total) is higher (68.1%) than the number of those believing that “businesses must only secure a profit for their owners and pay taxes” (answers “absolutely agree” and “rather agree” in total) (49.1%) (Figure 1.2.). It should be emphasized that the number of respondents absolutely agreeing with the statement that businesses must take an active part As compared to 2005, the number of in resolving social and environmental problems of companies believing that businesses should society is twice higher than the number of those take an active part in resolving social and absolutely agreeing that businesses should pay environmental problems has increased taxes and secure profits for their owners (29.2% twofold (32.7% in 2005). against 14.9%). Principles of the ethical and responsible attitude to consumers used in the company's policy

42,3

Ownership type There is no significant difference in the attitude to the role of businesses in resolving social and environmental problems based on the ownership The number of state-owned and joint-stock Implementation of environmental projectstype.30,7 companies supporting an active role of businesses in resolving community social and environmental problems is somewhat higher than the respective number of private companies. In this case, it should be noted that the number of joint-stock companies absolutely agreeing with this decision exceeds twofold 30,5 Participation in the regional development programs the number of state-owned companies (45.1% against 21.2% respectively). The number of state-owned and joint-stock companies, which do not support the statement that businesses must secure profits for their ownersImplementation and pay taxes only, is reporting higher (41% and 40.5% respectively) than the number of respondents of the principles 24,5 and practices, transparency, and ethical conduct who agree with this statement (28.9% and 36.3% respectively). 0

10

20

30

40

50

Figure 1.2. Classification of Answers to the Question «To what extent do you agree with the following statement about the role of businesses in social life?» 40 Businesses must secure profits for their owners and pay taxes only

35 30 25

Businesses must take an active role in resolving social and environmental problems of society and community life

20 15 10 5 0

16

Absolutely disagree

Rather agree

Neither agree nor disagree

Rather agree

This approach has no sense at all

5,6

Absolutely agree


Company size The number of large companies believing that businesses should be active in resolving the said problems is lower than the number of small and medium-sized companies. Principles of the ethicalRegional and responsible attitude aspect to consumers used in the company's policy

42,3

Participation in the regional development programs

30,5

The numbers supporting the idea of business participation to resolve social and environmental problems within society is higher in the Donetsk Region and lower in the Lviv Region. Most companies believing that businesses should secure profits for their owners and pay taxes are located in Lviv and 30,7 Implementation of environmental projects Odesa regions. In our opinion, it is related to the economic specifics of the region, because Lviv and Odesa have more small and medium-sized companies and less large companies. Field of activities A specific group of companies (providing legal and travel services, involved in the catering and hotel business, manufacturing industrial purpose products, and agricultural companies, Implementation of the reportingcommunication principles 24,5 the media) is more inclined to believe that businesses should take an active part in resolving social and and practices, transparency, and ethical conduct environmental problems of society, unlike transport companies, which tend to support the idea that 0 10 20 30 businesses must secure profits for their owners and pay taxes.

40

40

1.4. CORPORATE SOCIAL RESPONSIBILITY ROLE IN BUSINESS PRACTICES

Businesses must secure profits for their owners The attitude of companies to implementing social responsibility policies and practices has not changed and pay taxes only 30 35

over the last five years. Slightly more and 25than half of respondents (53.3%) pointed out that the social responsibility policy Businesses must practices must be implemented by every company (53.9% in 2005), and a smaller percentage of take them an active role 20 in resolving social (41.1%) is certain that social responsibility is only for companies willing to promote it (41.7% in 2005). and environmental Only 5.6% of companies believe that companies should not promote social responsibility at all (4.4% in 15 problems of society 2005) (Figure 1.3). and community life 10

Figure 1.3. Classification of Respondents’ Answers to the Question 5 “It is believed that a business is socially responsible when it is responsible for the impact of its decisions and activities on 0 society and the environment and constributes to the sustainable development of society. Absolutely What Rather agree Neither agree Rather agree Absolutely is your attitude to this?�, % (N=600) disagree

nor disagree

agree

This approach has no sense at all

5,6

41,1

53,3

This approach must be implemented by every company

This approach is only for companies willing to promote it

17 Yes


Ownership type Compared to 2005, the number of state-owned companies supporting active approaches for a socially responsible business dropped significantly from 90.6% in 2005 to 51.1% in 2010 and, accordingly, the number of those believing that social responsibility is only for companies willing to promote it increased from 8% in 2005 to 48.9% in 2010. The reasons behind this are the financial and economic crisis, and implementation of charity projects instead of corporate social responsibility projects, which have not affected the financial performance indicators of companies and, therefore, failed to interest management. In 2010, the number of joint-stock companies believing that every company should incorporate social responsibility into its activities grew to 74.9% from 62.1% in 2005. According to experts, it can be related to the requirement of the shareholders. Company size There is no significant difference in the attitude of various size companies to implementation of social responsibility policies and practices. Marginal changes, as compared to 2005, have been seen among companies employing over 500 people. The number of such companies believing that implementation of social responsibility is a duty of every company dropped from 73.7% in 2005 to 60.4% in 2010. Field of activities Manufacturing and industrial purpose products companies as well as communication companies tend to believe more than others that implementation of social responsibility should be a duty of every company. In contrast, consumer goods and transport companies are more inclined to believe that this approach must be implemented only by the companies willing to do it. Regional aspect Most companies located in the Donetsk region believe that social responsibility practices and policies must be implemented by every company. Most companies operating in the Lviv and Odesa regions claim this approach is only for the companies willing to do it. It is an interesting fact that every fifth company in Lviv shares the idea that implementation of social responsibility makes no sense at all.

18


CONCLUSIONS: 1. 1. Important changes have happened in the social responsibility awareness level over the last five years, depending on the company size, the company location region, and the field of the company activities. The 2010 survey shows a direct dependence: the larger a company is, the higher also its awareness level. 2. Most companies believe that social responsibility includes charity assistance provided to the community, development of the company’s personnel and fair business practices. Just as in 2005, only one third of companies associate implementation of environmental projects and participation in regional development projects with social responsibility. Both in 2005 and 2010, the lowest number of companies believes that the company’s transparency is an aspect of social responsibility.

3. The number of companies believing that businesses should take an active part in resolving social and environmental problems has increased twofold in comparison with 2005. This may lead to the following conclusions: firstly, the social responsibility concept has become recognized by Ukrainian companies; secondly, the government has been engaging businesses more actively in resolving social and environmental problems of communities. 4. Half of Ukrainian companies believe that social responsibility policies and practices should be promoted by every company.

19


10

25

Businesses must take an active role in resolving social and environmental Absolutelyproblems of society agree and community life

5

20

0

15

Absolutely disagree

Rather agree

Neither agree nor disagree

Rather agree

2. INTENSITY AND PRIORITIES OF SOCIAL RESPONSIBILITY IMPLEMENTATION This approach has no

10

sense at all

5

2.1. IMPLEMENTATION OF SOCIALLY RESPONSIBLE EVENTS 5,6

0

Absolutely Rather agree Neither agree Rather agree Absolutely disagree nor disagree agree Most respondents (67.3%) hold socially responsible events (see Figure 2.1). As compared to 2005,

their number has somewhat dropped: This in 2005, 75.8% ofno companies promoted social responsibility. The approach has financial crisis may be one of the causessense of this as well as the fact that most companies take measures atresult, all 41,1 53,3 This approach must mentioned above without realizing that they are part of the social responsibility policy.by be implemented 5,6 every company

Figure 2.1. Analysis of Answers to the Question “Does your company take measures, is only which This mayapproach be referred to as socially responsible ones? Socially responsible measures for companies willing are defined as the company’s voluntary (at its own initiative only) care about social to promote 41,1it 53,3 Thisenvironmental approach mustprojects” (welfare of the personnel and community) and be implemented by every company

This approach is only for companies willing to promote it No

Yes

32,7 67,3 Yes

No

32,7

67,3 Company size In contrast to100 the trend recorded in 2005 when the company size played a crucial role in implementing social responsibility, no significant difference in implementing social responsibility can be seen in 2010 in Yes terms of the company size and ownership type. 80

Figure 2.2. Social Responsibility Implementation, by regions, % (N=600) 100

No

60 Yes

80

40

60

20

40

0

No

Kyiv Region

Lviv Region

Dnipropet‡ Donetsk rovsk Region Region

Odesa Region

20

0

Kyiv Region

Lviv Dnipropet‡ Donetsk Odesa Kharkiv Region rovsk Region Region Region Region Development of the company's personnel, its training 80,9 Non‡use of child labour

20

Non‡use of forced labour Consumer health protection and safety

80,7 78 71,3

Kharkiv Region


No

32,7 67,3

Regional aspect From the regional aspect prospective, companies located in Odesa and Donetsk are leaders in incorporating social responsibility policies into their activities, while companies operating in Lviv lag behind (see Fig. 2.2.). 100

Field of activities Leaders in implementing social responsibility are: communication companies and companies Yes involved in hotel business, consulting companies, the media, etc. The lowest number of businesses implementing 80 social responsibility includes transport companies, agricultural companies, and companies manufacturing industrial purpose products. In our opinion, this can be explained by the dynamic nature of business of No the60 first category of companies.

40

2.2. SOCIAL RESPONSIBILITY MEASURES

20 social responsibility measures implemented by companies were in labour practices (measures Most to develop personnel, refusal to use forced and child labour, absence of discrimination, introduction of labour conditions and improvement programs) and consumer healthcare and safety measures (see Fig. 0 2.3). The least popular measures among Ukrainian companies include protection Kyiv Lviv Dnipropet‡ Donetsk Odesa Kharkiv of natural resources and Region Region rovsk Region Region Region Region cooperation with the community.

Figure 2.3. Classification of Answers to the Question “Which of the social responsibility measures does your company implement?” (N=404)

Development of the company's personnel, its training

80,9

Non‡use of child labour

80,7 78

Non‡use of forced labour Consumer health protection and safety

71,3

Implementation of labour condition improvement programs

66,1

Non‡discrimination in labour practices

58,8

Introduction of energy saving technologies

42,1

Application of ethical consumer treatment principles

37,4

Protection of the rights of employees to the freedom of association

36,1

Application of fair competition and ethics principles

34,8

Non‡use when cooperating with the government authorities

32,4 32

Charity assistance provided to the community Implementation of reporting principles and practices

31,4

Implementation of waste use and recycling programs

29,6

Taking measures to curb emissions into the environment

23,9

Investment of resources in the community's life

16,6

Measures to protect natural resources

14,8 0

These practices are implemented on a regular basis

20

40

60

80

Rarer Once a year

4,8 8,9

21


No

60

40

Company size The larger a company is, the more frequently it implements the following socially responsible practices: 20 protection of the right of its employees to the freedom of association and collective negotiations; reduction of emissions into the environment; measures to protect natural resources and investment of its resources 0 into the community’s life. In contrast, more small companies than large companies implement consumer Kyiv Lviv Dnipropet‡ Donetsk Odesa Kharkiv healthcare and safety practices. Region Region rovsk Region Region Region Region Ownership type There are some differences in implementing various measures depending on the company ownership type. The number of state-owned and joint-stock companies implementing measures in renewing natural resources is twice higher than the number of private companies. More state-owned companies 80,9 Development ofownership the company's personnel, its training as compared to companies with other types invest resources into infrastructure development and other social programs aimed at improving the community’s life,labour as well 80,7 as implementing reporting Non‡use of child principles and practices in their activities. At the same time, less state-owned companies than companies Non‡use of forced labour 78 with other ownership types implement principles such as practicing ethical and responsible attitudes 71,3 Consumer healthand protection and safetyto competitors. toward consumers, the principles of fair competition ethical attitudes Implementation of labour condition improvement programs

66,1

Application of fair competition and ethics principles

34,8

Non‡use when cooperating with the government authorities

32,4

Regional aspect Non‡discrimination in labour practices 58,8 Different regions are characterized by significant differences in the way companies implement socially 42,1 Introduction savingin technologies responsible practices. Thus, a higher number of ofenergy companies the Lviv, Dnipropetrovsk, and Donetsk regions, than in general Application for the selection, implement the enumerated 37,4responsibility practices. of ethical consumerall treatment principlessocial For some, their activity is even several times higher than in other regions, while companies in the Odesa Protection of the rights of employees to the freedom of association 36,1 and Kyiv regions implement social responsibility practices to a lower extent than in general.

2.3. REGULARITY OF SOCIALLY RESPONSIBLE PRACTICES 32 Charity assistance provided to the community

31,4

Implementation of reporting principles and (55%) practices Slightly more than half of the surveyed Ukrainian companies implement socially responsible practices on their own; almost every tenth does it several times 29,6 a year. The rest of Ukrainian Implementation ofcompany waste use(9%) and recycling programs companies do it now and then (see Fig. 2.4.). 23,9 Taking measures to curb emissions into the environment

16,6

Investment of resources in the community's life Figure 2.4. How often does your company implement practices which can be referred to as socially Measures to ones? protect natural resources 14,8 responsible (N=404) 0 These practices are implemented on a regular basis

Rarer Once a year

4,8 8,9

55,0

16,5

Several times a year

5,7 9,2

Every half a year

Several times every half a year

22

20

40

60

8


80

Introduction of energy saving technologies

42,1

Application of ethical consumer treatment principles

37,4

Protection of the rights of employees to the freedom of association

36,1

Application of fair competition and ethics principles

34,8

Implementation of waste use and recycling programs

29,6

Regional aspect In comparison with 2005, the number of companies 32,4 Non‡use when cooperating with the government authoritiesSocial responsibility is most intensively regularly implementing socially responsible implemented by companies located in the assistance provided to the community 32 practices hasCharity grown (in 2005, only 31.3% of Donetsk and Lviv regions, and least intensively companies did it on a regular basis).principles and practices 31,4 Implementation of reporting in Kyiv and Dnipropetrovsk regions. of activities 23,9 Taking measures to curb emissions intoField the environment There are differences in the intensity of implementation of social responsibility practices by companies Investment of resources in the community's life 16,6 from different sectors. Most agricultural companies, companies manufacturing consumer goods and 14,8 on a regular basis. At the same time, Measures to protect natural resources industrial purpose products, implement socially responsible practices 0 services 20 implement 40 socially 60 responsible 80 more than half of the companies providing banking and financial practices once a year and rarer: only 17% of companies in this sector do it on a regular basis. Companies providing household and public utility services implement social responsibility practices These practices are Rarer to quiteimplemented a low extent. Thus, the number of companies implementing social responsibility practices on a Once a year on abasis regular basis to the number 4,8 of companies in this sector implementing them several times a year. regular is equal 8,9 2.4. FACTORS ENCOURAGING COMPANIES TO IMPLEMENT SOCIALLY Several times a year 16,5 RESPONSIBLE PRACTICES 55,0 The main factors encouraging companies 5,7 to implement socially responsible practices primarily include inner convictions: moral reasons and inner incentives. Every half a yearHowever, factors such as company’s sales 9,2 growth, emulation of the actions of competitors, and demand of the local government agencies are quite important as well (see Fig. 2.5.). Several times every half a year Figure 2.5. Respondents’ Answers to the Question “What factors encourage your company to implement socially responsible practices (tick as appropriate)?” For moral reasons

61,3

Because it is our principle, inner incentive

52,1

This contributes to the sales growth

37,9

Our competitor does so

19,2

Because it is demanded by the local government agencies

18,9

Because it is covered by the media and improves our image

8,8

For religious reasons

8,4

Because it is necessary to compensate for the damage caused

5,6

It is demanded by the trade union

3,7

It is required by the foreign partner

0,8

We comply with the laws of Ukraine

0,1 0

10

Because we cannot afford it

61,4

Because we have never thought about social responsibility

15,9

20

30

40

50

60

23


As compared to 2005, factors for companies have not changed. Thus, in 2005 moral reasons were the key factor for 71.8% of companies, inner incentive for 57.4%, the company’s sales growth for 22.8%, and demand of the local government agencies for 21%. It is interesting that the number of companies, for which emulation of the competitors’ actions became one of the factors of social responsibility implementation, had nearly doubled (from 9.9% in 2005 to 19% in 2010). Field of activities Classification of answers by the field of activities has revealed quite significant differences in factors encouraging companies from various sectors to implement social responsibility practices: • moral reasons are typical of most companies in the fields of transport, finance, construction, and commerce. This factor has the lowest value for companies providing accommodation, catering, travel, consulting, and legal services, the media and communication companies. • inner incentive is typical of most companies manufacturing industrial products, construction companies, transport companies, companies providing household and public utility services, and companies providing accommodation, catering, travel, consulting, legal services and the media. The lowest number of companies, for which social responsibility is an inner incentive and a principle of operation, is concentrated in the field of financial and banking services and in the sector of consumer goods manufacturing. • religious reasons are one of the factors of corporate social responsibility implementation for every fourth commercial company and every tenth transport company. Over one third of construction companies and every fifth company manufacturing industrial products emphasized that social responsibility implementation is caused by the need to compensate for the damage caused to the environment or by the company’s products. This factor plays a role in the cases of agricultural companies and transport companies as well. The group of important factors encouraging companies to implement social responsibility includes those that contribute to an increase in the competitive advantages of companies: contribution to the sales growth. Thus, more than half of companies providing accommodation, catering, travel, consulting, and legal services, the media, and one third of agricultural companies, companies manufacturing consumer and industrial goods, commercial companies pointed out that this factor has an impact on social responsibility program/practice implementation. Competition factor is important for companies manufacturing consumer goods, agricultural and transport companies. One of the factors encouraging every fifth agricultural company to implement social responsibility practices is the media coverage of their social responsibility practices, which improves the company’s image in general. Demand from interested parties (stakeholders) plays an important role in implementing social responsibility: ie requirements of the parent company, foreign partners, demands of the trade unions and local government authorities. Requirements of the parent company are important in implementing social responsibility for one third of communication companies, nearly every fourth transport company and companies providing financial services; requirements of foreign partners for every tenth transport company; demand of the trade unions for almost one third of communication companies and one fourth of companies manufacturing industrial products; demand of the local government authorities for over half of agricultural companies and one third of transport companies. Company size The company size has a certain impact on the priority of factors for social responsibility implementation. Thus, the larger a company is, the lower the weight of factors such as moral reasons and sales volume growth, but the higher the weight of factors such as demand by the trade unions, local government

24


authorities, requirements of foreign partners, coverage in the media and improvement of the company’s image, and the need to compensate for the damage caused to the environment. However, while in 2005 the competition factor was more important for large companies, in 2010 it plays a more important motivational role for small and medium-sized companies. In 2010, factors such as the sales volume growth has become more important for small companies than for large and mediumsized companies, while in 2005 it was equally important for SMEs. Ownership type The company ownership type has an impact on the factor priority. For state-owned companies, the most important factors are demands of the trade unions and local government authorities. Compensation of the damage caused by the company’s activities or products has no impact on motivation of state-owned companies at all. For private companies, the most important are factors such as the sales volume growth, competition and religion, and the least important is demand of the trade unions. For joint-stock companies, the important motivational factors include the coverage of their social responsibility practices by the media, which shapes the company’s positive image, and understanding of the need to compensate the damage caused to the environment by the company’s activities or products. Regional aspects For companies located in the Kharkiv region, the important role in implementing social responsibility is played by the demands of local government authorities; for companies in the Kyiv region important factors include religious reasons and the sales volume growth; for Donetsk companies factors such as competition and image, demands of the trade unions and of the parent company, and sales volume growth are important. Competition is the most important factor for companies operating in the Odesa region.

2.5. OBSTACLES FOR SOCIAL RESPONSIBILITY IMPLEMENTATION Almost one third (32.7%) of surveyed Ukrainian companies declared that they implement no social responsibility practices. For most of them (61.4%), social responsibility programs/practices are not relevant due to lack of financial resources (see Fig. 2.6.). Lack of resources is the main factor why social responsibility practices are not implemented by: • small companies; • companies located in the Lviv region; • companies providing financial services, manufacturing industrial products, providing household and public utility services, and communication companies; • the majority of state-owned companies (90.2%). 16% of respondents stated that they implement no social responsibility practices and have never considered implementing social responsibility programs/practices. Every tenth company (11%), which implements no social responsibility practices, believes this is a duty of the government, not businesses. The following companies have never considered implementing social responsibility programs/ practices: • every fourth construction company and every fifth company in the commerce and transport sectors; • 43.3% of companies located in Odesa and Odesa region, and almost every fourth company located in Kyiv and Kyiv region (24.7%); • primarily joint-stock companies (21.7%).

25


For religious reasons

8,4

Because it is necessary to compensate for the damage caused

5,6

It is demanded by the trade union

3,7

Every fourth joint-stock company (25.4%) and every fourth company providing accommodation, It is required by the foreign partner 0,8 catering, travel, consulting, and legal services, the media (27.7%), half of large companies employing over We comply with the laws ofinUkraine 500 people (56%), and 42% of companies located Dnipropetrovsk0,1 and Dnipropetrovsk region believe that this is a duty of the government, not businesses. 0 10 20 30 40 50 60 Figure 2.6. Why social responsibility programs/practices are not relevant for your company at the moment? N=196. Because we cannot afford it

61,4

Because we have never thought about social responsibility

15,9

Because this is a function of the government, not businesses

11,0

Because this does not stimulate business development

3,9

Because it is not encouraged by the government (for example, there are no benefits)

3,8

Because it wastes time and money

0,1

Because we were disappointed by past attempts

0,0 0

10

20

30

40

50

60

For almost every fifth joint-stock company and most large companies located in Donetsk and Donetsk region, the main obstacle is a belief that social responsibility implementation does not stimulate business development. Lack of government encouragement is an obstacle for a marginal number of companies, primarily pay salaries and wages in and due time for large companies, We construction companies, companies 62,9 located in Dnipropetrovsk and the Dnipropetrovsk region, Kharkiv and the Kharkiv region. We offer flexible working hours 45,5 It is encouraging to find out that only a small number of Ukrainian companies (within error) showed The gender is not important for us 42,5 absolute rejection of social responsibility (selected answers “Because it is a waste of time and money” and when hiring new employees “Because this is not a We realpay activity, but just a and marketing trick or money laundering”) or were disappointed official salaries wages only 42,3 by the past attempts to implement social responsibility. We regularly increase salaries and wages and pay bonuses

39,9

We have a non‡discrimination policy

37,6

We hold professional/career training

33,4

We pay for overtime work

32,4

We comply with the laws

26,4

We offer additional financial, etc incentives

19,9

We have a program of balance between work and family

19,6

We offer health insurance

11,4

We offer an opportunity to visit entertainment houses

10,2

We have a crediting system, etc.

6,9

We cover travel expenses

0,0 0

26

10

By discussing decisions with the personnel

63,7

Employees express their opinions personally, it is not systematic

30,9

From rumours

15,9

20

30

40

50

60


CONCLUSIONS: 1. The intensity of socially responsible practice implementation for the last five years has grown from 31.3% of companies which did it regularly in 2005 to 55% in 2010. 2. While in 2005 socially responsible practices were implemented primarily by large companies, in 2010 there is no significant difference in implementing social responsibility and intensity of social responsibility practice depending on the company size. 3. The main factors encouraging companies to implement socially responsible practices include, first and foremost, moral reasons and inner incentives. However, factors, such as the company’s sales growth, emulation of actions of competitors, and demands of the local government authorities, are quite important. As compared to 2005, the factor priority for companies has not changed, but the number of companies for which the competition factor became quite important has doubled.

4. As in 2005, the social responsibility policy of Ukrainian companies is focused primarily on the company’s personnel and consumers. Most social responsibility practices can be referred to as labour practices: measures to develop the company’s personnel, refusal to use forced and child labour, non-discrimination, implementation of labour condition improvement programs, and consumer healthcare and safety measures. Measures relating to the protection of natural resources and cooperation with the community are the least important for Ukrainian companies. 5. Nearly one third of Ukrainian companies pointed out that they implement no social responsibility. For most of them, social responsibility programs/practices are not relevant due to lack of resources, and every tenth company, which stated that it implements no social responsibility practices, believes that this is a function of the government, and not businesses. Only a marginal number of Ukrainian companies (within error) showed absolute rejection of social responsibility.

27


3. SOCIAL RESPONSIBILITY PRACTICES 3.1. ORGANIZATIONAL MANAGEMENT Organizational management is one of the key aspects of social responsibility. Organizational management is based on the principles and practices of transparency, reporting, compliance with regulations, ethical conduct, and taking into account the interests of stakeholders. Transparency in organizational management is considered to be timely and unbiased informing about the organization’s decisions and actions. 3.1.1.Company Openness The 2010 survey has demonstrated that Ukrainian companies are closed to the public: for more than half of companies (59.8%), detailed information about the company’s operations is designed for in-house use only. The largest number of companies, which do not disclose information about their performance, are private companies and joint-stock companies manufacturing consumer products, as well as public utility companies. In terms of regional classification, the highest number of companies «closed» to the public is located in the Kyiv and Kharkiv regions. 13% of companies have been unable to give a clear answer about their existing sources of informing the public about the company’s activities. The most popular methods of disclosing information to the public by Ukrainian companies include web pages (15%), the company’s printed publications, press-releases (13%), professional publications and the media (11.6%). The least popular methods include participation in TV programs (3.5%), press conferences and meetings with the community (3.4%). The largest number of companies using various methods to disclose information are located in the Donetsk region; in terms of industry classification, these are communication companies and companies manufacturing industrial products. The number of large companies using various methods of providing information about their activities is higher than the number of small and medium-sized companies (Table 34), because normally they have more resources. The situation with information openness for the public has not really changed since 2005: the prime ways of information disclosure include the in-house channels (the company’s publications, web pages); and the number of companies, for which the information about their activities is designed for the in-house use only, has even slightly grown (40.6% in 2005). Preparation of non-financial reports is one of the instruments of openness and accountability of organizations in terms of social responsibility. As compared to 2005, the situation with such reporting has not changed to a large extent. According to the survey results, almost every fifth company in Ukraine prepares a non-financial report as an independent document or as part of the company’s general report (see Table 3.1.1.). In 2005, 25.9% of companies prepared social reports. When analyzing this answer, researchers would like to point out how respondents define non-financial or social reports. It could be assumed that a non-financial report for respondents is not only a separate report and part of the company’s general report, but also generalization of the companies’ social and environmental reports. According to the respondents’ answers, leaders in social reporting include large companies and stateowned companies. In terms of industry classification, leaders in social reporting are construction companies, communication companies, and companies providing legal, consulting, catering, accommodation, travel services, and the media. In terms of regional classification, the highest number of companies preparing social reports is concentrated in the Kyiv and Dnipropetrovsk regions.

28


Table 3.1.1. Classification of Respondents’ Answers to the Question “Has your company prepared a social (non-financial) report for the last 5 years?” (N=600) The company prepares and publishes a separate report The social report became part of the company’s regular report

Yes

No

7,6

92,4

11,8

88,2

3.1.2. Company’s Mission, Values, and Codes of Conduct The number of companies having an approved mission, codes of conduct, etc, is quite low. As compared to 2005, the number of such companies has dropped nearly twofold. In 2010, only 28.4% of Ukrainian companies have approved values and codes of conduct, 42% of respondents are planning to do it (in 2005: 49.7% and 32.9% respectively). The number of companies having values and approved codes of conduct is higher than among the companies implementing social responsibility policies (38.6%) in comparison with companies not implementing them (7.2%). The approved values and codes of conduct are normally developed by large companies, stateowned companies, communication companies, and companies located in the Donetsk region. In terms of industry classification, the lowest number of companies with declared codes of conduct are those that manufacture consumer goods. 3.1.3. Social Responsibility Strategy and Financing 29.6% companies have a social responsibility strategy. This indicator is somewhat higher (38.5%) among companies, which declared implementation of social responsibility policies. Social responsibility strategies have been developed primarily by large companies, state-owned companies, communication companies, transport companies, and companies operating in the Donetsk region (Table 46-49). The number of companies having a social responsibility strategy practically remains the same: in 2005, one third of companies (36.9%) had strategic plans for social responsibility practices, in 2002, the number was 25.7%. In 2010, almost every fifth company (17.0%) has a special budget or a budget item for implementing social responsibility programs/practices (Table 3.1.2.). Table 3.1.2. Classification of Answers to the Question “Has your company had a special budget (or a budget item) for implementing social responsibility programs/practices for the last 5 years?” Yes

No

Difficult to answer

2005

14,3

69,5

16,2

2006

15,0

69,6

15,5

2007

13,4

71,3

15,3

2008

14,8

70,3

14,9

2009

16,4

71,8

11,8

2010

17,0

69,7

13,3

The number of Ukrainian companies having a budget for implementing social responsibility programs/ practices has hardly changed for the last 5 years, and slightly grew over the period between 2008 and early 2010 (see Table 3.1.3.).

29


Table 3.1.3. Classification of Answers to the Question “How has the budget (budget item) designed for implementing social responsibility programs/practices changed for the last 5 years?” Increased

Has not changed

Decreased

Difficult to answer

2005

4,2

47,1

1,1

47,6

2006

5,5

46,0

0,8

47,7

2007

6,4

43,7

3,2

46,7

2008

5,5

41,0

9,2

44,3

2009

5,4

39,3

12,8

42,9

2010

3,5

40,6

12,8

43,2

In 2010, mostly agricultural, industrial, transport, and communication companies have special budgets for implementing social responsibility programs/practices. Almost half of companies located in the Odesa region have special budgets in 2010. In 2010, a reduction in the special budget for implementing social responsibility programs/practices has been recorded mainly in companies providing legal, consulting, accommodation, catering, travel services, the media and agricultural companies. Just as in 2005, social responsibility practices and programs have been developed directly by the company’s manager in most Ukrainian companies (82.2%) (75.5% in 2005). In every tenth company (10.4%), they have been developed by managers of the business area and deputy directors. No special departments or special positions of employees have been introduced. The role of a company director as developer of social responsibility programs increases as the company’s size decreases, which is caused, on the one hand, by a small number of employees and the administrative staff, accordingly. In large companies, social responsibility programs are developed by the public relations department, the human resources department and deputy directors. Managers are the main developers of social responsibility programs in state-owned and private companies to a larger extent than in joint-stock companies. Joint-stock companies are characterized by an increasing role of deputy directors and public relations departments developing social responsibility programs. Special departments or new appropriate positions are, according to the survey results, introduced in a small number of communication companies and companies manufacturing industrial products, medium-sized and large companies, and companies located in the Donetsk region. 3.1.4. Anti-Corruption Measures Almost half of Ukrainian companies (46%) acknowledge that sometimes (total answers “sometimes”, “very rarely”) they have to offer unofficial payments to various government officials to “settle a business problem”. A large number of Ukrainian companies (39%) believe that they have to do it often, and only 15% of them stated that they never do it. The survey showed that companies, which answered that they promote no social responsibility (56.7%), have been faced with the practice of offering unofficial payments to government officials to a larger extent than companies which declared social responsibility implementation (30.2%). According to the survey, large companies have normally never been faced with bribes (unofficial payments to government officials). The number of such companies is nearly twofold higher than the respective number of small companies.

30


The industry classification shows that almost one third of the financial sector companies have never offered unofficial payments to government officials; however, more than half of transport companies, companies manufacturing consumer goods and agricultural companies have often practiced it. Almost half of Ukrainian companies (49%) have no clear stand on the issue of corporate anticorruption policies. Nearly every third (32%) company is not ready to give away part of its profits for the efficient fight of corruption. Every fourth company (19%) is ready to give away part of its profits to efficiently fight corruption. The highest number of companies, which are ready to give away 3-5% of their profits to efficiently fight corruption, are in the construction sector and in the Donetsk region. No significant differences can be seen here in terms of the company size and the ownership type. The majority of Ukrainian companies are not ready for the social responsibility certification procedure. The number of companies ready to be certified in case of development of the national social responsibility standard is twofold lower than the number of companies unready to be certified (15.7% against 41.5% respectively). 42.9% of Ukrainian companies have no conviction on this issue.

3.2. HUMAN RIGHTS AND LABOUR PRACTICES According to the survey results, every fourth company (26.4%) has no special practices for its own employees, but strictly follows the labour laws. Three-quarters of the surveyed Ukrainian companies implement various socially responsible practices for their personnel (Figure 3.2.1.): • 63% of respondents never retain salaries and wages, • 45.5% of companies provide flexible working hours to their employees, • 42.5% of companies pay official salaries and wages only; • 40% of respondents regularly increase salaries and wages, • 42.5% of companies follow the non-discrimination principles (directly or indirectly), • 32.4% of companies pay for overtime work, • nearly every fifth surveyed Ukrainian company (19.6%) has its own program of balance between family and work, • 19.9% of companies offer additional financial, material, and other incentives to their personnel for achieving the set goals. The commonly used labour practices in Ukrainian companies include health insurance of the personnel (11% of respondents said they use it in their relations with the personnel), offering employees an opportunity to attend entertainment or sports events (10%), own crediting systems and financial support offered to pay for accommodation, education, and other high expenses incurred by the company’s personnel (6.9%). Only one third of companies (33.4%) hold professional training for their personnel. As compared to 2005, the priority of socially responsible practices in respect to personnel has remained the same: measures to pay for work, regulation of the working hours, and non-discrimination in employment. Company size There are differences in practices applied in respect to employees by different companies. Large ones use the following forms of support more often than other companies: health insurance and health improvement financing; an opportunity to visit entertainment and sports houses (gyms, swimming pools, clubs, cinemas, etc); additional financial, material, and other incentives for achieving the set goals. Undoubtedly, this is related to the greater financial resources that large companies possess.

31


0

10

20

30

40

50

60

50

60

Figure 3.2.1. Companies’ Socially Responsible Practices (N=600) We pay salaries and wages in due time

62,9

We offer flexible working hours

45,5

The gender is not important for us when hiring new employees

42,5

We pay official salaries and wages only

42,3

We regularly increase salaries and wages and pay bonuses

39,9

We have a non‡discrimination policy

37,6

We hold professional/career training

33,4

We pay for overtime work

32,4

We comply with the laws

26,4

We offer additional financial, etc incentives

19,9

We have a program of balance between work and family

19,6

We offer health insurance

11,4

We offer an opportunity to visit entertainment houses

10,2

We have a crediting system, etc.

6,9

We cover travel expenses

0,0 0

10

20

30

40

Ownership type In implementing socially responsible practices in respect to their personnel, state-owned companies offer their employee’s health insurance, partially or fully financed, more often than companies with discussing decisions with the personnel 63,7 other ownership By types, and twice as many state-owned companies pay official salaries and wages to their Employees express their opinions personally, employees. Researchers believe this can be explained by the size of30,9 companies and activities of trade unions. it is not systematic From rumours

15,9

3.2.1. Contribution to Associations of Companies’ Personnel

Decisions are made in a centralized way 6,7 and are not discussed From the company’s management, 5,1 Socialthe responsibility in respect to employees also means contributing to associations of the companies’ hierarchy from the lowest to the highest degree

personnel and engaging them in the process of discussing and 4,5 making important decisions related to From the trade union the company’s development. Ukrainian companies do not pay great attention to this aspect of social 2,6 Regular anonymous polls of employees responsibility. According to the survey’s results, more than two-thirds of the surveyed companies in Internal mail, Intranet where employees 2,3 only (10.7%) has a trade union and Ukraine have no associations of can employees. Every tenth company express their opinion almost every fifth company (17.3%) has a labour council. From 0,6the regional perspective, companies Difficult to answer located in the Dnipropetrovsk and Donetsk regions have the largest number of trade unions, which is 0 10 20 30 40 50 60 related to the economic specifics of these regions. Labour councils as forms of employee associations operate in every fifth company located in the Kharkiv, Donetsk, Kyiv and Dnipropetrovsk regions. In terms of economic sectors, the largest number of companies having no employee associations are companies providing legal, consulting, catering, accommodation, travel services, the media, commercial companies, and companies manufacturing consumer goods. The largest number of companies having practices are implemented 21,4 trade unions andNo labour councils are concentrated in the transport and communication sectors. One Supporting employees in caring third of this sector’s companies have trade unions,18,5 and every fifth company has labour councils. A high for sick family members level of employee associations is typical of companies manufacturing industrial products and providing Flexible working hours 59,1 financial services. Shortened working day/week

32

Distant work Supporting employees in caring for their children

12,4 3,8 27,7


We pay official salaries and wages only

42,3

We regularly increase salaries and wages and pay bonuses

39,9

We have a non‡discrimination policy

37,6

33,4 We hold professional/career training Taking into account the employees’ opinion Most respondents (63.7%) lookWe forpay employees opinions important company decisions through 32,4 for overtime work on discussions with their personnel; almost one third of the surveyed companies (30.9%) has a ‘practice’ We comply with the laws 26,4 when their employees express their opinions, but this practice is not systematic (Fig. 3.2.2.). Rumours are 19,9 opinion regarding the decisions made additional financial,about etc incentives a common methodWe ofoffer obtaining information the employees’ by theWe company: 15.9% ofofcompanies find out employees’ opinion 19,6 through rumours. have a program balance between work and family The procedure of discussing decisions with personnel is typical of small and medium-sized companies. We offer health insurance 11,4 Large companies use other methods of obtaining information about the employees’ opinion: the company’s 10,2 companies, information is normally trade unions, in-house press, intranet, state-owned We offer an opportunity to visit management. entertainment In houses gathered through trade unions, the in-house press, and the intranet. Employees express their opinions We have a crediting system, etc. 6,9 personally twice more often in joint-stock and private companies than in state-owned companies. Trade 0,0 We cover expenses unions and management are also methods oftravel gathering information typical of joint-stock companies. 0

10

20

30

40

50

60

Figure 3.2.2. How do you know your employees’ opinion about the important decisions made by the company and the company’s activities in general? (N=600)

By discussing decisions with the personnel

63,7

Employees express their opinions personally, it is not systematic

30,9

From rumours

15,9

Decisions are made in a centralized way and are not discussed From the company’s management, the hierarchy from the lowest to the highest degree

6,7 5,1

From the trade union

4,5

Regular anonymous polls of employees Internal mail, Intranet where employees can express their opinion

2,6

Difficult to answer

0,6

2,3

0

10

20

30

40

50

60

Regional aspects Companies in the Donetsk region use more often than companies in other regions the following methods of information gathering about the employees’ opinion: trade unions, regular anonymous No practices are implemented 21,4 polls of the company’s employees and management. Rumours as a method of information gathering Supporting employees in caring is more typical of companies in family the Odesa and Kyiv18,5 regions. Companies located in Dnipropetrovsk, as for sick members compared to companies in other regions, more often use the centralized system of decision making Flexible working hours 59,1 under which decisions are not discussed. Employees express their opinion personally most often in Shortened working day/week 12,4 Kyiv, Kharkiv and Donetsk. Distant work

3,8

3.2.3. Program of Balance between Family and Work

Supporting employees in caring for their children

27,7

Offering to young fathers acompanies leave to carehave a7,6 Although only 20% of Ukrainian program of balance between family and work (see for their children Fig. 3.2.3.), 76% of companies implement their own practices (Fig. The most 0 10 20 3.2.3.).30 40 common 50 practice 60 of balance between family and work is offering flexible working hours (59.1%). Flexible working hours are normally offered to employees by companies providing public utility, legal, consulting, catering, accommodation, travel services and the media. In terms of regional classification, these are companies located in Lviv. It takes no part 42,1 Territory development assistance 30,5

33


From the trade union

4,5

Regular anonymous polls of employees Internal mail, Intranet where employees can express their opinion

2,6 2,3

Every fourth company (27.7%) supportsDifficult its personnel in caring for their children. They include primarily 0,6 to answer agricultural companies and financial services companies; in terms of regional classification, these are 0 10 20 30 40 50 60 companies located in Kyiv, Donetsk and Odesa. Figure 3.2.3. Classification of Answers to the Question “What practices of balance between family and work are implemented by your company? No practices are implemented

21,4

Supporting employees in caring for sick family members

18,5

Flexible working hours

59,1

Shortened working day/week

12,4

Distant work

3,8

Supporting employees in caring for their children

27,7

Offering to young fathers a leave to care for their children

7,6 0

10

20

30

40

50

60

Every fifth company (18.5%) supports its employees in caring for sick family members. They include mainly those companies manufacturing industrial products usually located in Donetsk. The least common practices of balance between family and work include shortened working days/ weeks (12.4%), leave offered to young fathers to care for their children (7.4%) and distant work practices It takes no part 42,1 (3.8%). Territory development assistance The survey results show that there have been cases 30,5 of gender discrimination in Ukraine when employing, paying andProgram promoting employees (Table 3.2.1.) 18,7 of job creation in the region It does not help yet, but plans to do it in the future 16,2

Table 3.2.1. Classification of Answers to the Question “Does your company provide equal terms for We employ the disabled in the region 8,6 men and women?� (N=600) We contribute to the environmental projects inYes the region

8,3

Financial assistance to the local authorities In hiring 87,1 in program implementation

No

Difficult to answer

8,1

7,0

5,9

In paying for workAgreement with the 91,1 Partnership Community

6,4

3,3

5,6

In the career growth We sponsor an orphan asylum (a82,9 school, etc)

5,5

3,6

13,5

We sponsor sports and cultural events

3,8

Most companies operating in the agriculture and construction sectors, as compared to the selection We support small businesses in the area 0,7 in general, provide equal terms for men and women when hiring them, which, in our opinion, is caused Thereofis these a receiving room for citizens and 0,1 communication companies, agricultural by the specific operations companies; transport companies when paying for work: agricultural companies, manufacturing industrial products, Charity assistance companies 0,0 and commercial companies in the career growth. We help our veterans

0,0

0

10

20

30

40

3.3. RESPONSIBILITY TO THE COMMUNITY Although most Ukrainian companies believe that charitable assistance to the community is an aspect of social responsibility 1.1.), only one third of companies (37.5%) make social investments Implemented (Fig. no environmnetal practices 50,1 in the community. Social investments of half of them (50%) have not changed for the last five years; Waste use, sorting, and rcycling programs 26,6 social investments of 46% of them have decreased, and social investments of 4% of them have

34

Energy saving technology implementation

25,9

Green office, paper recycling program implementation

14,0

Curbing emmissions into the environment Water, forest, land, and other natura

8,5 7,9


increased. As compared to 2005, the number of companies making social investments have dropped. According to the 2005 survey results, 60.3% of companies provided charity assistance. Obviously, this fall can be explained by the financial and economic crisis in the country and, perhaps, rethinking/ redistribution of resources for implementing the different aspects of the social responsibility policies of companies. Most often social investments are made by large companies and companies located in Donetsk, Kharkiv and Odesa. In terms of the field of activities, they include primarily construction companies, communication companies, and companies providing legal, consulting, accommodation, catering, travel services, and the media. There is no significant difference in the way social investments are made by companies with different ownership types. The surveyed companies believe (by priority) that healthcare, assistance to children and education are the most important sectors for social investments. As compared to 2005, the social investment priority areas have changed to some extent. Thus, healthcare has occupied the first position, education moved to the third position instead of assistance to the disabled, the elderly and the disadvantaged. Obviously, accumulation of non-resolved problems in the healthcare and education system resulted in a focus on these areas by the nation’s companies as well. Most of the surveyed Ukrainian companies provide no assistance to the region (the community) where the company, its branch office or representative office is located (42% provides no assistance; 16% of companies provide no assistance, but plan to do it in the future). As compared to 2005, the number of companies assisting the region (the community) where the company, its branch office or representative office is located dropped from 66.7% in 2005 to 42% in 2010. No assistance is provided to the region (the community), where the company, its branch office or representative office is located, usually by small companies, private and joint-stock companies, and companies answering that they did not implement social responsibility (79.3% against 24% of companies implementing social responsibility). 42% of Ukrainian companies said that they provide various assistance to the region where they are located. In 2010, the common practices of assistance provided to the region (the community) among companies in 2010 include: • assistance in the territory development (30.5%), • job creation programs (18.7%) • employing the disabled (8.6%), • contribution to environmental program implementation (8.3%) • financial assistance to local government authorities in resolving social problems (8.1%) (Fig. 3.3.1). As compared to 2005, the common types of assistance provided to the community has remained territory development and job creation programs. In comparison with 2005, the number of companies providing financial support in resolving the problems of the region has dropped threefold (28.0% in 2005); the number of companies contributing to environmental project implementation (18.5% in 2005), sponsoring sports and cultural events (17.1% in 2005), and employing the disabled in the region (14.6% in 2005) has fallen twofold; the number of companies sponsoring orphan asylums (schools, sports clubs, etc) (20.2% in 2005) has dropped almost fivefold. Company size There are significant differences in the way assistance is provided to the community by companies with the different size and ownership type. As in 2005, large companies take a more active role in regional development than small companies.

35


for their children 0

10

20

30

40

50

60

Figure 3.3.1. How does your company helps develop the regions (communities) where it is located or has its branch and representative offices? (N=600) It takes no part 42,1 Territory development assistance 30,5 Program of job creation in the region 18,7 It does not help yet, but plans to do it in the future 16,2 We employ the disabled in the region

8,6

We contribute to the environmental projects in the region

8,3

Financial assistance to the local authorities in program implementation

8,1

Partnership Agreement with the Community

6,4

We sponsor an orphan asylum (a school, etc)

5,5

We sponsor sports and cultural events

3,8

We support small businesses in the area

0,7

There is a receiving room for citizens

0,1

Charity assistance

0,0

We help our veterans

0,0 0

10

20

30

40

Ownership type While in 2005 most state-owned companies (64.2%) provided financial assistance to local authorities, in 2010 their number (6.3%) has dropped significantly and become much smaller than the respective Implemented no environmnetal practices 50,1 number of private and joint-stock companies. Waste use, sorting, and rcycling programs 26,6 In 2010, joint-stock companies provide financial assistance to the local authorities more often than Energyownership saving technology implementation companies with other types and have programs of job creation in the region. 25,9 However, the number of state-owned companies, involved in territory development, sponsoring Green office, paper recycling program implementation 14,0 sports and cultural events, contributing to the environmental project implementation, is higher than the Curbing emmissions into the environment number of private and joint-stock companies providing such8,5 assistance. Water, forest, land, and other natura 7,9 resources protection measures Regional aspects Difficult to answer 5,2

Practically all the companies in Donetsk provide various types of assistance to the local community; We have no impact on the environment 1,0 the least active companies providing such assistance are located in Lviv and Kyiv. We pay a tax for way polluting the environment 0,0 There are differences in the assistance is provided depending on where companies are located. Thus, financial assistance is provided to local authorities by companies companies 0 10 in Kharkiv 20 and Donetsk; 30 40 50 in Donetsk have job creation programs; companies in Donetsk and Odesa create jobs for the disabled; companies in Donetsk contribute to environmental projects; companies in Dnipropetrovsk sponsor sports and cultural events; most companies in Donetsk, Kharkiv and Dnipropetrovsk develop the territory where they are located. We maintain the company's product quality

53,0

We provide true information and advertisements to consumers 42,1 3.4. ENVIRONMENTAL RESPONSIBILITY Training of the personnel on consumer service

35,0

Environmental responsibility is one of the least popular aspects20,5 of social responsibility among Ukrainian We have a clearly developed system for handling complaints companies. According to the survey’s results, half ofto national implement no environmental Difficult answer companies 13,8 protection practices (Fig. 3.4.1.). We openly declare about our responsibility in the media 10,4

36

We have a feedback page on our website

8,8

We have a hot line (contact centre) for consumers

7,1

We hold trainings for consumers

6,6


It takes no part 42,1 Territory development assistance 30,5 Program of job creation in the region 18,7

TheyItinclude primarily small and medium-sized companies and private companies, including those does not help yet, but plans to do it in the future 16,2 that provide financial, legal, consulting, catering, hotel and travel services, the media, commercial, We employ the disabled in the region 8,6 construction and transport companies. WeFrom contribute to the environmental in thethe region the regional classification projects perspective, largest8,3 number of companies not implementing any to the localOdesa authorities environmentalFinancial practicesassistance are located in Lviv, and Kyiv. in program implementation 8,1 The number of companies implementing no social responsibility policies totals 80.4% as compared to 6,4 Partnership with the the companies declaringAgreement implementation ofCommunity social responsibility practices (35.3%). We sponsor orphan (a school, etc) 5,5implementing environmnetally responsible In comparison with an 2005, theasylum number of companies practices (52% in 2005) and the priority of implementing We sponsor sports and cultural events 3,8environmental responsibility practices have not changed; however, the number of companies implementing them has dropped to a large extent. We support small businesses in the area 0,7 The most common environmnetal responsibility practices in 2010 include promotion of energy is a receiving room for citizens 0,1 of waste sorting and recycling (for 26% of saving technologies There (for 26% of companies) and programs companies). It should be noted that the number of companies introducing energy saving technologies Charity assistance 0,0 and waste recycling programs has dropped by 1.5 times as compared to 2005 (42.8% and 40.5% in 2005 We help our veterans 0,0 respectively). 0

10

20

30

40

Figure 3.4.1. In what areas has your company implemented environmentally responsible practices? (N=600) Implemented no environmnetal practices

50,1

Waste use, sorting, and rcycling programs

26,6

Energy saving technology implementation

25,9

Green office, paper recycling program implementation

14,0

Curbing emmissions into the environment

8,5

Water, forest, land, and other natura resources protection measures Difficult to answer

7,9 5,2

We have no impact on the environment

1,0

We pay a tax for polluting the environment

0,0 0

10

20

30

40

50

The least common practices still include measures aimed at protecting water/forest/land, and other natural resources and measures aimed at curbing emissions into the environment. However, the number of companies implementing them has dropped fivefold in comparison with 2005 (in 2005, practices of We maintain the company's product quality 53,0 reduction in emissions into the environment were implemented by 35.4%; 8.5% in 2010; protection of We provide true information and advertisements to consumers 42,1 water/forest/land, and other natural resources: 25.6% and 7.9% of companies respectively). of theof personnel on continuing consumer service 35,0 environmental protection practices Reduction inTraining the number companies to implement Webe have a clearlyby developed for handling complaints 20,5 large investments in modernizing the can explained the fact system that their implementation requires to answer had existing technologies and equipment, andDifficult most companies 13,8no such resources due to the financial and economic crisis. We openly declare about our responsibility in the media 10,4 We have a feedback page on our website

8,8

size We have a hot line (contact centre) Company for consumers 7,1

Large and medium-sized companies reduce emissions into the environment, introduce energy saving We hold trainings for consumers 6,6 technologies, protect water/forest/land, and other natural resources more often than small companies. We keep a public receiving room 0,1 Green office programs are more typical of large companies employing over 500 people and small Monitoring 0,1 companies. We survey consumers

0,1 0

10

20

30

40

50

37


Форма власності The number of state-owned companies implementing energy saving technologies is higher than the number of companies with other ownership types. Joint-stock companies implement measures to reduce emissions into the environment more often than companies with other ownership types. The number of state-owned and joint-stock companies protecting water/forest/land and other natural resources is threefold higher than the number of private companies doing it. Regional aspects The regional classification showed that companies located in the Donetsk region are more active in implementing various environmentally responsible practices: they introduce energy saving technologies, implement waste recycling programs, and take measures to protect water/forest/land and other natural resources. The highest number of companies implementing green office programs is located in the Dnipropetrovsk region. Field of activities Measures to reduce emissions into the environment are primarily taken by transport companies; energy saving technologies are introduced by companies manufacturing consumer goods; waste recycling programs are implemented by companies manufacturing industrial products; measures to protect natural resources are taken by agricultural companies; green office programs are implemented by companies providing legal, consulting, catering, accommodation, travel services, and the media. Financial institutions, despite the fact that they were leaders in understanding and attributing environmental practices to CSR, are not leaders in implementing these practices. Taking into account the consequences of the industrial impact on the environment In our opinion, quite a small number of companies implementing environmental responsibility practices can be explained by the need for investments and the fact that companies do not consider the consequences of the impact of the company’s production or products on the environment. Half of the representatives of Ukrainian companies (51%) have no clear answer about the way their companies take into account the possible consequences of the impact of the manufacturer’s performance or products on the environment. The majority of companies taking account of such consequences do it by measuring energy and water consumption (38.5%) and 14% of them study public opinion. Ukrainian companies have no clear answer about their response when a product or manufacturing process has an adverse effect on the environment, if this aspect is not provided for by the environmental laws. Thus, 58% of respondents believe that in this case companies will invest funds to remove this effect, while 42% of them believe they won’t. Companies manufacturing industrial products, construction companies, and businesses located in Dnipropetrovsk and Donetsk plan to invest funds to remove (overcome) the adverse effect on the environment. No significant changes can be traced in comparison with 2005: the number of companies that will make investments to remove it practically remains the same (62.3% in 2005).

3.5. CONSUMER TREATMENT One of the key elements of social responsibility is the consumer treatment (Fig. 3.5.1.). The survey results have shown that for the last few years almost half of Ukrainian companies (from 47% in 2005 to 45% in 2010) have paid great attention to their relations with consumers (total answers “very often” and “often”).

38


Waste use, sorting, and rcycling programs

26,6

Energy saving technology implementation

25,9

Green office, paper recycling program implementation

14,0

emmissions into(25% the environment However, almostCurbing every fourth company in 2005 and 23% 8,5 in 2009) has never considered the social Water, forest, land, and other natura responsibility issue in their relations with clients. They include primarily companies not implementing 7,9 resources protection measures social responsibility in their activities (63.7% in 2005 and 60.6% in 2009). Only a marginal number of Difficult to answer 5,2 companies declaring social responsibility implementation (10% in 2005 and 6.2% in 2009) have never Weresponsibility have no impact on in thetheir environment 1,0clients. considered the social issue relations with Approximately of companies (27% in 2005 and0,0 31% in 2009) occasionally considered the Weone paythird a tax for polluting the environment issue of their relations with consumers and clients (see Table 3.5.1.). 0

10

20

30

40

50

Figure 3.5.1. What measures does your company take to enhance its responsibility to consumers? (N=600) We maintain the company's product quality

53,0

We provide true information and advertisements to consumers

42,1

Training of the personnel on consumer service

35,0

We have a clearly developed system for handling complaints

20,5

Difficult to answer

13,8

We openly declare about our responsibility in the media

10,4

We have a feedback page on our website

8,8

We have a hot line (contact centre) for consumers

7,1

We hold trainings for consumers

6,6

We keep a public receiving room

0,1

Monitoring

0,1

We survey consumers

0,1 0

10

20

30

40

50

Table 3.5.1. Classification of Answers to the Question “How often has your company considered the issue of social responsibility in respect to clients or business partners for the last 5 years?” (N=60) Very often

Often

2005 7,3 39,9 We develop and implement them on our own 2006 2007 2008 2009

9,2 40,1 Local government authorities 7,7 38,1 Business partners 7,2 38,5 The media 6,9 38,5 PR or advertising agencies

77,4 29,6 8,0 5,9

Sometimes

Never

27,5

25,3

28,2

22,5

33,6

20,7

34,6

19,7

31,4

23,2

2,2

Orphan asylum director

1,4 Social responsibility in respect to clients or business partners is often considered by companies providing legal, consulting, catering, accommodation, travel services, Non‡governmental (non‡profit) organizations 0,5 the media, construction companies, and stateowned companies. Research (specialized) institutions 0,4 As compared to 2005, the priority of measures aimed at enhancing responsibility to customers has not International 0,2 changed to a large extent (Fig. 3.5.1.).organizations Product quality improvement has remained the main practice implemented by companies. However, it 10 20 30 40 50 60 70 80 0 should be noted that the number of such companies dropped from 83.9% in 2005 to 53% in 2010. Every third company, just like in 2005 (37.3%), holds trainings for the personnel on consumer service. In 2010, slightly less than half of companies attributed provision of true information and advertisements to consumers (42%) to their responsibility to consumers. Every fifth company (20%) has a clearly developed system of complaint handling. Preferential taxation for companies implementing social responsibility

76,9

Administrative pressure reduction by the local authorities

38,5

Positive examples of implementation in the world

35,0

Proposals of the local authorities to businesses

39


Company size Large companies take various measures to improve their social responsibility to consumers; however, as the company’s size grows, the number of companies providing fair information and advertisements to consumers drops. Field of activities Personnel training dedicated to consumer services are held more often by communication companies and companies providing legal, consulting, catering, accommodation, travel services and the media; product quality is maintained by commercial companies and companies manufacturing consumer goods; fair information and advertisements are provided by industrial companies, and companies providing legal, consulting, catering, accommodation, travel and media services. Regional aspects Product quality is more cared for by companies in Dnipropetrovsk and Donetsk; training for the personnel held by companies in Dnipropetrovsk and Odesa; and fair information and advertisements are provided by companies located in Donetsk. Ownership type State-owned companies, more often than companies with other ownership types, have a clearly developed system of complaint handling, a hot line for consumers, and openly declare their responsibility to and care for consumers in the media. Private and joint-stock companies support their product quality more often than state-owned companies. The number of private companies holding training for personnel on consumer services is somewhat higher than the respective number of state-owned and joint-stock companies.

3.6. TAKING INTO ACCOUNT THE COMPANIES’ STAKEHOLDER INTEREST. DIALOGUE WITH STAKEHOLDERS Taking account of the stakeholder interest when developing and implementing social responsibility policies remains quite low in Ukraine (Table 3.6.1.). Companies often take into account the interests of consumers and government authorities and rarely of non-governmental and research organizations, as well as educational institutions. Table 3.6.1. Classification of Answers to the Question “Does your company take account of the following stakeholders’ interest when developing and implementing social responsibility policies?” (N=600) Yes

No

Government authorities

57,0

43,0

Commercial organizations/business organizations

20,4

79,6

Trade unions and other employee associations

27,9

72,1

Consumers

81,8

18,2

Non-governmental organizations

12,3

87,7

Research organizations, educational institutions

16,7

83,3

The main source of ideas for developing and implementing social responsibility programs/practices for the majority of Ukrainian businesses (71%) is the company’s management. In every fourth Ukrainian

40


company (27.5%), proposals relating to the development and implementation of social responsibility programs/practices are made by the company’s employees. The national companies receive less proposals or ideas from the local government authorities (18%), the public (13%), and business partners (5%). Occasional information is the source of ideas about social responsibility (the media) for every tenth Ukrainian company (10%). Company sizeа For small and medium-sized companies, the main sources of ideas, apart from the company’s management, include the company’s employees. The public, local government authorities, company departments, and the media are the sources of information for large companies employing over 500 persons. A marginal number of medium-sized companies named business partners as sources of ideas. Форма власності The number of state-owned and joint-stock companies, for which the main sources of information for the development and implementation of social responsibility include the public, local government authorities, the company’s employees and departments, is higher than the number of private companies. Regional aspects The industry and regional classification has shown the following differences: • non-financial organizations are the main source of ideas primarily for construction companies and companies located in Dnipropetrovsk; • the public: for agricultural companies, commercial companies, and companies located in Donetsk ; • local government authorities: for agricultural companies, companies providing household and public community services, communication companies, and companies located in Donetsk, Kharkiv and Lviv ; • company employees: for companies providing legal, consulting, catering, accommodation, travel services, the media, and businesses located in Odesa; • company departments and occasional information: for companies manufacturing industrial products and businesses located in Donetsk ; • business partners: for companies manufacturing industrial products and businesses located in Kharkiv and Kyiv . Normally, when social responsibility programs/practices are developed and implemented, businesses co-operate with the main source of ideas. Most Ukrainian companies (77%) develop and implement social responsibility programs/practices on their own. These are normally small and medium-sized businesses, private and joint-stock companies. The highest number of businesses developing social responsibility programs and practices on their own are concentrated in sectors such as manufacture of industrial products, finance, and transport in Lviv, Odesa and Kyiv. Just as in 2005, local government authorities are the main external partners of Ukrainian companies in developing social responsibility programs/practices (29.6%). 8% of Ukrainian businesses cooperate with business partners. The level of cooperation with other stakeholders: non-governmental organizations, the media, research (specialized) institutions, is quite low (Fig. 3.6.1). A higher number of large companies, as compared to small and medium-sized companies, and a larger number of state-owned companies, in comparison with private and joint-stock companies, cooperate with public authorities. The local public authorities are the main partner mostly for agricultural companies, public utility companies, and communication companies. The highest percentage of businesses cooperating with the government authorities are located in the Lviv and Kharkiv regions.

41


We openly declare about our responsibility in the media

10,4

We have a feedback page on our website

8,8

We have a hot line (contact centre) for consumers

7,1

We hold trainings for consumers

6,6

The larger a company is, the more often it co-operates with business partners, research institutions, We keep a public receiving room 0,1 PR or advertising agencies and international organizations. State-owned companies more often, as Monitoring compared to private and joint-stock companies, co-operate0,1 with research, non-governmental, and We surveycompanies consumers co-operate 0,1 international organizations, while joint-stock with business partners and the media. 0 10 20 30 40 50 Figure 3.6.1. Whom do you co-operate with when developing social responsibility programs/practices? We develop and implement them on our own

77,4

Local government authorities

29,6

Business partners

8,0

The media

5,9

PR or advertising agencies

2,2

Orphan asylum director

1,4

Non‡governmental (non‡profit) organizations

0,5

Research (specialized) institutions

0,4

International organizations

0,2 0

10

20

30

40

50

60

70

80

The industry and regional classification has also shown a various level of cooperation. Thus, construction companies, companies manufacturing industrial products co-operate with business partners more often than businesses in other sectors of the economy. Preferential taxation for companies implementing 76,9 social responsibility Agricultural companies co-operate with the media, non-governmental and research organizations pressure reduction byAthe local authorities 38,5 in Donetsk co-operate with the more Administrative often than with other companies. high percentage of businesses examples ofresponsibility implementation in the world media whenPositive developing social programs/practices, while companies located in Lviv co35,0 Proposals of the local authorities to businesses operate with business partners. 25,5 about social development programs Improvement of the consumer and community trust and loyalty level More coverage of social responsibility practices in the media

22,7

Availability of a bank of social programs or information bank

21,2

21,9

3.7. SOCIAL RESPONSIBILITY IMPLEMENTATION EFFICIENCY

Assessing the impact of social programs/practices, respondents have given the following Public recognition from the responsibility government and community 21,0 answers: Closer cooperation with non‡profit organizations 6,2 • 62% of Ukrainian companies believe that they are really useful for society, communities, The state to which I pay taxes 1,0 • 70%: improvement of the personnel’s attitude to the company; My conscience 0,5 • 53%: improvement of the company’s reputation; Preferential 0,0 answers “rather yes” and “yes”). • 48%: improvement of the company’s economiccredits indicators (total 0 (only 10 large 20 30 40 50 60 70 in Only 13% of companies experienced an easier IPO procedure companies are interested the IPO), 26% improved their relations with investors, and 30% facilitated implementation of innovations. 72.5% of companies declaring implementation of social responsibility emphasized improvement of the company’s reputation, 64% stressed improvement of economic indicators, 79.4% underlined the real utility for society, 86.7% emphasized improvement of the employees’ attitude to the company and 41.3% Lack of funds 72,4 pointed out the innovation imperative.

42

Insufficient information about the principles of and approaches to implementation Tax pressure Imperfect regulations

38,5 33,4 30,7


Company sizeа Large companies, in particular those employing over 500 people, more often than small and mediumsized companies experienced a positive impact of implementing social responsibility programs/practices on the economic indicator improvement, the company’s reputation improvement, an easier IPO procedure and improvement of relations with investors. Ownership type Joint-stock companies more often than companies with other ownership types emphasized a positive impact on indicators such as the real utility for society, improvement of the employees’ attitude to the company, improvement of relations with investors and a facilitated IPO procedure. Field of activities Companies manufacturing consumer goods, providing legal, consulting, catering, hotel services, and construction companies believe that implementation of social responsibility programs are really useful for society. Construction companies emphasize social responsibility programs that improve relations with investors, implement innovations and facilitate IPO procedures. The highest number of communication companies, companies manufacturing industrial products, construction companies, and companies providing consulting, legal, catering, hotel services, and the media emphasize improved employee attitude towards the company as a result of implementing social responsibility programs. A higher number of companies manufacturing industrial products than others point to economic indicator improvement. Reputation improvement was experienced primarily by communication companies, companies manufacturing industrial products, and those providing consulting, legal, catering, hotel services, as well as the media. Regional aspects Businesses located in Donetsk, Odesa and Dnipropetrovsk more often than companies in other regions, emphasize real utility for society as a result of implementing social responsibility programs; businesses in Odesa, Kharkiv and Donetsk underline improved employee attitude. Companies in Donetsk, more often than companies located in other regions, emphasize an impact of socially responsible activities on the economic indicator improvement, reputation improvement, improvement of relations with investors, implementation of innovations and a facilitated IPO procedure. Researchers believe that it can be explained by the fact that 84% of Ukrainian companies From 20% to 30% of Ukrainian companies do not trace the results of implementing social were unable to give a clear answer about the results of implementing social responsibility responsibility programs/practices. Only half of programs/practices. them (43%) plan to conduct monitoring and assessment. Only 14% of Ukrainian companies perform random assessment of the results of implementing social responsibility programs/practices. These are usually small companies, companies manufacturing industrial products, companies providing consulting, legal, catering, hotel services, and the media, communication companies, state-owned and joint-stock companies, located in Kharkiv and Donetsk. Over 2/3 Ukrainian companies believe that social responsibility practices have an impact on the company’s ability to recruit and retain the best employees (77%), form a positive image and improve reputation (76%), and create advantages (64%). Half of respondents believe that social responsibility

43


practices influence improvement of relations with the authorities (54%), the local community and nongovernmental organizations (51%), improve the financial indicators in the future (50%), and contribute to the company’s long-term sustainability (48%). Slightly more than one third of companies believe that social responsibility increases or leads to new sales markets, helps establish relations with key business partners (40%), enhances the company’s investment attraction (38%), helps find new partners (37%), and attract investments (37%). As compared to 2005, the rating of the key aspects of the companies’ performance impacted by social responsibility has practically not changed. Both in 2005 and 2010, most companies emphasized that implementation of social responsibility has an impact on the company’s ability to find and retain the best employees (77% in 2010 and 72.4% in 2005), form a positive image and improve reputation (76% in 2010 and 77.8% in 2005). In 2005, the third result of social responsibility implementation was improvement of cooperation with the government authorities (61.6%); in 2010, this factor moved down to the fourth position (54%), and the third position was occupied by the creation of competitive advantages (64%). Company size More large companies, than small and medium-sized companies, pointed out to an impact on such aspects as contribution to the company’s long-term sustainability, establishment of relations with the local community and non-governmental organizations, establishment of relations with the public authorities, finding new partners and innovation implementation. Field of activities An impact of social responsibility policies on an increased or new sales market was emphasized by the largest number of companies providing financial services; on the company’s financial indicator improvement by companies providing consulting, legal, catering, hotel services and the media; on the improvement of relations with business partners by agricultural products; on improvement of relations with public authorities by communication companies; on improvement of relations with the local community and non-governmental organizations by companies operating in the financial sector; on finding new partners by agricultural companies; on the innovation implementation by agricultural companies, companies manufacturing industrial products and construction companies.

44


CONCLUSIONS:

1. Labour practices are the common area of social responsibility for Ukrainian companies: three-quarters of the surveyed companies implement various socially responsible practices aimed at their own personnel. The priority of socially responsible practices for the company’s own personnel has remained the same since 2005: labour compensation practices, regulation of the working hours and non-discrimination in employment. 2. Only one third of companies make social investments in the community development; a higher percentage of businesses provide diverse assistance to the region where they operate. The common types of assistance, as compared to 2005, still include territory development and job creation programs; however, the number of companies providing financial assistance to the public authorities in resolving problems of the region has dropped threefold; the number of businesses contributing to environmental project implementation and sponsoring sports and cultural events has fallen twofold. Large companies are leaders in implementing programs of assistance to the region where they operate. 3. Environmental protection is the least popular area of social responsibility. The common practices among companies implementing environmental responsibility include energy saving technology implementation, waste sorting and recycling programs. Large companies implement various environmentally responsible practices more often than small and mediumsized companies. 4. Product quality improvement has remained the key social responsibility practice of large companies, in respect to consumers and partners. However, as the companies grew in size, the number of those providing fair information and advertisements to consumers reduces.

5. The 2010 survey results show that, similar to 2005, social responsibility failed to become part of the strategic management of most Ukrainian companies: only a marginal number of companies have a social responsibility strategy; no separate functional social responsibility departments have started to be formed; companies have no clear mechanism of controlling implementation of social responsibility programs/ practices. Only one fifth of companies has a special budget and prepares a social (non-financial) report. 6. Most Ukrainian companies believe that social responsibility programs/practices are useful for society and the region, have an impact on the employee attitude to the company, improve the company’s reputation and economic indicators. Over two-thirds of Ukrainian businesses believe that social responsibility practices affect the company’s ability to recruit and retain the best employees, form a positive image and improve its reputation, create competitive advantages. 7. The survey results have shown that Ukrainian companies understand and perceive more and more social responsibility as a tool for the companies’ competitiveness improvement. 8. The level of information openness of companies for the public continues to be low, as well as the level of co-operation of Ukrainian companies with other organizations in developing and implementing social responsibility programs/practices. For most companies, information about the company is designed for in-house use only. The number of companies using external channels of information (TV programs, publications in the media) is lower than the number of those using internal information channels (in-house press, webpage).

45


9. The level of co-operation with key groups of stakeholders is quite low. Companies usually take into account the interest of consumers and the public authorities, and in rare cases the interests of non-governmental and research organizations, as well as educational institutions. In most cases, entities develop and implement such programs on their own, normally taking account consumers and the local government authorities alone. As in 2005, the key external partners in developing and implementing social responsibility programs are the public authorities.

46

10. Most Ukrainian companies do not trace the results of implementing social responsibility programs/practices, and only half of them plan to perform monitoring and assessment.


We have a clearly developed system for handling complaints

20,5

Difficult to answer

13,8

We openly declare about our responsibility in the media

10,4

We have a feedback page on our website

8,8

We a hot RESPONSIBILITY line (contact centre) for consumers 7,1 4. have SOCIAL IMPLEMENTATION PERSPECTIVES We hold trainings for consumers

6,6

The majority of UkrainianWe companies (76.5%) believe preferential taxation for companies keep a public receiving roomthat 0,1 implementing social responsibility may stimulate the company’s social responsibility development (Fig. Monitoring 0,1 4.1.). We survey consumers 0,1 Over two thirds of companies (38.5%) believe that reduction of the administrative pressure by the 0 social10 20 30 40 50 local government authorities will stimulate implementation of responsibility. An important incentive for implementing social responsibility for every third Ukrainian company (35%) is a positive example of implementing social responsibility programs/practices in the world. For almost every fourth and fifth company in the country, the incentives for implementing programs and practices will include proposals to businesses of the local government authorities about the regional We develop and implement them on our own development programs (25%), improvement of the 77,4 consumer and community’s trust and loyalty in general (23%), more intensive coverage of social responsibility practices in the media (22%), public Local government authorities 29,6 acknowledgement by the authorities and the community (21%), availability of a bank of social programs Business partners 8,0 or a bank of information in the region (21%) (it should be noted that this factor is more important The media 5,9(25.2%) than for companies implementing it for companies not implementing social responsibility (19.3%)). PR or advertising agencies 2,2 For the last five years, the rating of the key incentives for implementing social responsibility has Orphan not changed. As compared toasylum 2005, director the number of1,4companies believing that the key incentives forNon‡governmental implementing social responsibility is preferential (non‡profit) organizations 0,5 taxation (74.1%) and proposals of the local authorities about the region’s social development programs (22%) has practically not changed. 2010 Research (specialized) institutions 0,4 has seen a reduction in the number of companies stating that the incentive to implement social responsibility for them will be reduction in the administrative pressure by the public authorities International organizations 0,2 (from 51.4% in 2005 to 38.5%). One of the key factors of implementing social responsibility for 10 20 30 40 50 60 70 80 0 companies in 2010 is presentation of the positive examples of social responsibility implementation in the world. Figure 4.1. What or who can stimulate social responsibility of your business? Preferential taxation for companies implementing social responsibility

76,9

Administrative pressure reduction by the local authorities

38,5

Positive examples of implementation in the world

35,0

Proposals of the local authorities to businesses about social development programs Improvement of the consumer and community trust and loyalty level More coverage of social responsibility practices in the media

25,5

Availability of a bank of social programs or information bank

21,2

Public recognition from the government and community

21,0

22,7 21,9

Closer cooperation with non‡profit organizations

6,2

The state to which I pay taxes

1,0

My conscience

0,5

Preferential credits 0

0,0 10 20

Lack of funds

72,4

Insufficient information about the principles of and approaches to implementation

38,5

30

40

50

60

70

47


Company sizeа Medium-sized companies, more often than small and large companies, regard preferential taxation as the key incentive; for small companies, incentives consist in the positive practices of social responsibility implementation and their global reputation, while large companies see an incentive in the acknowledgment from authorities and the community. Ownership type Joint-stock companies pay greater attention to incentives such as public acknowledgment by the authorities and the community, more coverage of social responsibility practices in the media, and availability of a bank of social programs or an information bank in the region. It should also be noted that an incentive such as the improvement of consumer and community trust and loyalty in general is less important for state-owned companies than for private and joint-stock companies Regional aspects Improvement of the consumer and community trust and loyalty in general is an incentive for almost a threefold higher number of companies located in Donetsk than for the selection in general. For most companies in Lviv and Kharkiv, the key incentive may be the administrative pressure reduction by the local authorities; for companies located in Kyiv incentives include coverage of social responsibility practices in the media, proposals of the local authorities to businesses about the region’s social development programs, and availability of a bank of social programs or an information bank in the region. Field of activities Preferential taxation is an incentive for companies manufacturing consumer goods. For this sector’s companies, important incentives also include better coverage of social responsibility practices in the media and public acknowledgment by the authorities and the community in general: these factors were chosen by twice as many companies than for the selection in general. The administrative pressure reduction is the main incentive for implementing social responsibility for transport companies. Obstacles for social responsibility implementation Lack of resources is the main obstacle for implementing social responsibility programs/practices for 27% of Ukrainian companies; the tax pressure for one third of companies (33%); imperfect regulations for 31% of companies. For 28% of Ukrainian companies, the key obstacles include lack of information (38.5%) and experience (28%) in the process of implementing social responsibility programs/practices, inexistence of governmental and non-governmental organizations for assistance (18%). Every tenth surveyed company (11%) emphasized the main obstacle consists in a lack of or weak social interest (Fig. 4.2.). As the company grows in size, the value of the following factors decreases: lack of funds, unavailable information about the principles of and approaches to social responsibility implementation, and the tax pressure. Regional aspects Depending on the region where the company is located, there can be seen the following differences: Lack of funds is the key obstacle for companies in Lviv, Kharkiv and Kyiv. For those located in Kharkiv, Odesa and Kyiv, the tax pressure is the main obstacle preventing them from implementing social responsibility.

48


My conscience

0,5

Preferential credits 0

0,0 10 20

30

40

50

60

70

Figure 4.2. Answer to the Question “What obstacles are the most serious ones for your company in implementing social responsibility programs/practices?� (N=283) Lack of funds Insufficient information about the principles of and approaches to implementation Tax pressure

72,4 38,5 33,4

Imperfect regulations

30,7

Poor experience, undeveloped mechanism of implementation

28,0

Impossibility to control the use of funds

24,4

Inexistence of governmental and non‡governmental organizations Lack of time

17,8

Inexistent or weak social demand

11,5

Difficult to answer

16,1

0,0 0 10

20

30

40

50

60

70

As compared to 2005, the main obstacle in implementing social responsibility is the same: lack of financial resources. However, a number of companies for which the financial factor is the most important, increased from 55% in 2005 to 72.4% in 2010. Companies operating in Donetsk, despite their high level and intensity of social responsibility program/ practice implementation, do lack experience, information about the principles of and approaches to implementing social responsibility, mechanisms for controlling how the allocated funds are used, and access to governmental and non-governmental organizations which would provide assistance. Lack of time became an obstacle for companies located in Dnipropetrovsk and Odesa; imperfect regulations for companies operating in Dnipropetrovsk and Kharkiv. Ownership types Marginal changes can be seen in factors such as a lack of funds, which is more important for stateowned companies, and the group of factors which could be referred to as a lack of knowledge and experience in implementing social responsibility: poor experience, undeveloped mechanisms of social responsibility implementation, inexistence of governmental and non-governmental organizations that could provide assistance, impossibility of controlling the allocated funds: all of these are more important for joint-stock companies than state-owned and private companies. Field of activities Lack of funds is a key obstacle for implementing social responsibility for transport companies. Tax pressure for commercial companies; insufficient information and poor experience in implementing social responsibility for companies manufacturing consumer goods. Imperfect regulations become the key obstacle for half of companies manufacturing industrial products. The inexistence of governmental and non-governmental organizations, which could provide assistance, was emphasized by twice as many companies of the communication and financial sectors than for the selection in general. Twice as many companies providing consulting, legal, catering, accommodation, travel and media services, than for the selection in general, believe that the main obstacle for implementing social responsibility consists in an absence of social demand.

49


Government role The number of Ukrainian companies believing that in the near future the government should engage businesses more actively in resolving social problems, is twice higher than the number of those believing that the state should resolve social issues on its own, and this needs improvement of the tax discipline and levy of more taxes (68.7% against 37.3% respectively). As compared to 2005, the number of those believing that the government should resolve social problems on its own by improving the tax discipline dropped from 50.8% in 2005 to 37.3% in 2010. Just as in 2005, there are no significant differences in selecting the different entrepreneurship strategies. From the regional classification perspective, the “fiscal” strategy is the most popular one in Lviv, and the “motivating” one is common in Kyiv. In 2010, the “motivating” strategy has also prevailed among companies in Donetsk. There are some differences in selecting the social responsibility development strategy depending on the company’s ownership type. Thus, the “fiscal” strategy was chosen by a number of state-owned companies while the «motivating» one was chosen by joint-stock companies. Analysis by the sectors of the economy has revealed that the “fiscal” strategy is the most popular among agricultural and construction companies, while the “motivating” strategy among construction and communication companies. Tow-thirds of Ukrainian companies believe that the social responsibility development will need the following measures in the years to come: • developing and adopting the National Social Responsibility Development Strategy (74%) (total answers “absolutely agree” and “rather agree”), • holding a high-profile informational and educational campaign dedicated to social responsibility (73%), • implementing a separate educational program for consumers (71%), • introducing principles of social responsibility in the activities of the public authorities and local government agencies (69.7%). Half of Ukrainian companies believe that in the foreseeable future it will be necessary to introduce a national rating of socially responsible companies (56%), activate participation of business associations in implementing social responsibility principles and practices (50.5%), and introduce CSR courses in the educational programs of high schools (53.4%). The lowest number of Ukrainian companies believes that it could be reasonable to introduce a separate CSR position in the entities (29%) (the number of those rejecting this idea is slightly less than 24.9%) and increase budgets of the organizations for CSR programs/practices (45.8%).

50


CONCLUSIONS: 1. The list of the main incentives and obstacles for implementing social responsibility has not changed for the last five years. It should be noted that there is a growing number of companies for which factors such as insufficient information, lack of positive examples of social responsibility implementation, and the lack of organizations able to provide assistance are more important; i.e. the companies’ potential readiness to implement programs/practices does exist, all that is needed is external help in obtaining information and knowledge. 2. For most Ukrainian companies, the key incentives for implementing social responsibility include preferential taxation of companies implementing social responsibility (however, lack of preferential taxation as the main obstacle in implementing social responsibility programs/practices was emphasized by only 3.4% of companies, which are not involved in implementing social responsibility), the administrative pressure reduction by the local government authorities, and presentation of the positive examples of social responsibility program/practice implementation in the world. 3. The main obstacle for implementing social responsibility programs/practices for Ukrainian companies is lack of funds, tax pressure and imperfect regulations. Other obstacles were mentioned: lack of information and experience, and the lack of governmental and non-governmental organizations able to provide assistance.

4. The number of Ukrainian companies believing that in the near future the government should engage businesses more actively in resolving social problems is twice higher than the number of those believing that the state should resolve social issues on its own, and this needs improvement of the tax discipline and levy of more taxes. As compared to 2005, the number of those believing that the government should resolve social problems on its own by improving the tax discipline dropped from 50.8% in 2005 to 37.3% in 2010. 5. Two-thirds of Ukrainian companies believe that in the near future the social responsibility development will need development and adoption of the National Social Responsibility Development Strategy, holding of a high-profile informational and educational campaign dedicated to social responsibility, introduction of the principles of social responsibility in the activities of the public authorities and local government agencies. The lowest number of Ukrainian companies believes that it could be reasonable to introduce a separate CSR position in the entities and increase budgets for CSR programs/practices.

51


5. ВИСНОВКИ

РОЗУМІННЯ СОЦІАЛЬНОЇ ВІДПОВІДАЛЬНОСТІ: 1. Протягом останніх п’яти років значні зміни відбулися на рівні поінформованості про соціальну відповідальність залежно від розміру підприємств, регіону їх розміщення та сфери діяльності. У дослідженні 2010 року простежується пряма залежність — чим більше підприємство, тим вищий рівень поінформованості. 2. Більшість підприємств до соціальної відповідальності відносять надання благодійної допомоги громаді, розвиток власного персоналу та чесне введення бізнесу. Як і у 2005 році, лише третина компаній асоціюють здійснення екологічних проектів та участь у регіональних проектах розвитку із соціальною відповідальністю. Найменша частка підприємств як у 2005 році, так і у 2010-му, віднесла до соціальної відповідальності такий її аспект, як відкритість компанії.

52

3. Підприємства здебільшого усвідомлено сприймають соціальну відповідальність. Частка компаній, які вважають, що бізнес повинен брати активну участь у вирішенні соціальних та екологічних проблем, у порівнянні з 2005 роком, зросла вдвічі. Це може свідчити про два моменти: по-перше, концепція соціальної відповідальності одержує визнання з боку українських підприємств і усвідомлення неминучості їх активної участі у вирішенні соціальних і екологічних проблем суспільства, а по-друге, що влада активніше почала залучати бізнес до вирішення соціальних та екологічних проблем громад. 4. Половина українських підприємств, вважає, що політика і практика соціальної відповідальності повинна впроваджуватися кожною компанією.


ІНТЕНСИВНІСТЬ ТА ПРІОРИТЕТИ ВПРОВАДЖЕННЯ СОЦІАЛЬНОЇ ВІДПОВІДАЛЬНОСТІ 1. Протягом останніх років інтенсивність впровадження соціально відповідальних заходів зросла з 31,3 % компаній, які робили це постійно, у 2005 році до 55 % у 2010 році. 2. Якщо у 2005 році впроваджували соціально відповідальні заходи переважно великі підприємства, то у 2010-му суттєвої різниці у впровадженні соціальної відповідальності та інтенсивності здійснення заходів із соціальної відповідальності залежно від розміру підприємства не простежується. 3. Серед основних чинників, які спонукають компанії впроваджувати соціально відповідальні заходи, на першому плані стоять моральні міркування та внутрішнє спонукання. Проте досить вагомою є частка таких факторів, як: зростання продажів компанії, копіювання дій конкурентів та запит з боку органів місцевої влади. У порівнянні з 2005 роком, пріоритетність чинників для компаній не змінилась, проте у двічі зросла частка компаній, для яких конкурентний чинник став досить вагомим.

4. Як і у 2005 році, політика соціальної відповідальності українських компаній спрямовується, передусім, на співробітників компанії та споживачів. Переважну частину заходів із соціальної відповідальності можна віднести до трудових практик: заходи із розвитку власного персоналу, відмова від використання примусової та дитячої праці, відсутність дискримінації, впровадження програм поліпшення умов праці, а також — до заходів із захисту здоров’я і безпеки споживачів. Найменш поширеними для українських підприємств є заходи щодо захисту природних ресурсів та взаємодії з громадою. 5. Майже третина українських компаній зазначила, що вона не здійснюють заходи із соціальної відповідальності. Для більшості з них програми / заходи із соціальної відповідальності не є актуальними через брак коштів, а кожна десята компанія, яка зазначила, що не здійснює заходи із соціальної відповідальності, вважає, що це функція держави, а не бізнесу. Лише незначна частина українських підприємств (в межах похибки) продемонструвала абсолютне неприйняття соціальної відповідальності.

53


ПРАКТИКИ СОЦІАЛЬНОЇ ВІДПОВІДАЛЬНОСТІ 1. Найпоширенішим напрямком соціальної відповідальності для українських підприємств є трудові практики — три чверті опитаних українських компаній здійснюють різноманітні соціально відповідальні заходи для власного персоналу. Незмінною з 2005 року залишилась пріоритетність соціально відповідальних заходів щодо власних працівників: заходи з оплати праці, регулювання робочого часу та відсутності дискримінації при прийомі на роботу. 2. Тільки третина компаній здійснює соціальні інвестиції в розвиток громади, трохи більша частка підприємств надає різноманітну допомогу регіону, де розташовані їх підприємства. Найпоширенішими видами допомоги громаді, у порівнянні з 2005 роком, так і залишилися благоустрій територій та програми створення робочих місць; однак втричі скоротилася частка підприємств, які надають фінансову допомогу владі у вирішенні проблем регіону; вдвічі — частка підприємств, які сприяють реалізації екологічних проектів та надають спонсорську допомогу спортивним та культурним заходам. Лідерами у впровадженні програм надання допомоги регіону, де знаходиться підприємство, є великі компанії. 3. Одним із найменш популярних напрямків соціальної відповідальності є захист навколишнього середовища. Серед тих підприємств, які впроваджують екологічну відповідальність, найпоширенішими є практики впровадження енергозберігаючих технологій та програми сортування та утилізації відходів. Великі за розміром компанії, частіше за малі та середні, здійснюють різноманітні заходи із екологічної відповідальності. 4. Підвищення якості продукції залишилося головним заходом соціальної відповідальності компаній, особливо великих, щодо споживачів і партнерів. Проте зі зростанням розміру підприємств зменшується частка тих, хто надає чесну інформацію та рекламу для споживачів. 5. За результатами дослідження 2010 року, як і в 2005-му, можна дійти висновку — соціальна

54

відповідальність ще не стала частиною стратегічного менеджменту більшості українських компаній: лише незначна кількість підприємств має стратегію соціальної відповідальності, не розпочався процес формування окремих функціональних підрозділів із соціальної відповідальності, компанії не мають чіткого механізму контролю впровадження програм/заходів із соціальної відповідальності. Лише п’ята частина компаній має спеціальний бюджет та готує соціальний (нефінансовий) звіт. 6. Більшість українських компаній вважає, що програми/заходи із соціальної відповідальності принесли дійсну користь для суспільства і регіону, вплинули на поліпшення ставлення працівників до компанії, покращили репутацію компанії та поліпшили її економічні показники. Понад дві третини українських підприємств вважають, що заходи із соціальної відповідальності впливають на можливості організації знайти та втримати кращих працівників, сформувати позитивний імідж і покращити репутацію, створити переваги перед конкурентами. 7. Результати дослідження засвідчили, що українські компанії все більше розуміють і сприймають соціальну відповідальність як інструмент підвищення конкурентоздатності підприємства. 8. Продовжує існувати достатньо низький рівень інформаційної відкритості для суспільства українських компаній та рівень їх співпраці з іншими організаціями у розробці і впровадженні програм / заходів із соціальної відповідальності. Для більшості компаній інформація про них лише для внутрішнього користування. Частка підприємств, які використовують зовнішні канали інформації (телепередачі, публікації в ЗМІ) менша за тих, хто використовує внутрішні канали інформації (внутрішня преса, веб-сторінка). 9. Рівень співпраці з основними групами стейкхолдерів достатньо низький. Найчастіше компанії враховують інтереси споживачів та органів державної влади, найменше — недержав-


них та науково-дослідних організацій, навчальних закладів. Здебільшого організації самостійно розробляють і впроваджують такі програми, враховуючи, переважно, тільки інтереси споживачів та органів місцевої влади. Основним зовнішнім партнером у розробці та впровадженні програм із соціальної відповідальності, як і у 2005 році, залишаються органи влади.

10. Переважна більшість українських компаній не відслідковує результатів впровадження програм / заходів із соціальної відповідальності, з них тільки майже половина планує проводити моніторинг та оцінку.

ПЕРСПЕКТИВИ ВПРОВАДЖЕННЯ СОЦІАЛЬНОЇ ВІДПОВІДАЛЬНОСТІ 1. Перелік основних стимулів та перешкод у впровадженні соціальної відповідальності протягом останніх п’яти років не змінився. Слід зауважити зростання частки підприємств, для яких більше важать такі чинники, як: недостатність інформації, позитивних прикладів впровадження соціальної відповідальності, організацій, які б змогли надати таку допомогу,— тобто, потенційна готовність підприємств до впровадження програм/заходів існує, необхідна лише зовнішня допомога в отриманні інформації і знань. 2. Для переважної більшості українських компаній основними стимулами у впровадженні соціальної відповідальності є пільгове оподаткування підприємств, які впроваджують соціальну відповідальність (однак відсутність пільгового оподаткування як основної перешкоди впровадженню програм/заходів із соціальної відповідальності окреслили лише 3,4 % компаній, які не займаються впровадженням соціальної відповідальності), зменшення адміністративного тиску місцевих органів влади та ознайомлення з позитивними прикладами впровадження програм / заходів із соціальної відповідальності в світі. 3. Головною перешкодою у здійсненні програм/заходів із соціальної відповідальності для українських компаній є брак коштів, податковий тиск та недосконалість нормативно-правової бази щодо сприяння реалізації соціальної відповідальності. Також було названо такі перешкоди, як: недостатність інформації і досвіду у процесі

впровадження програм/ заходів із соціальної відповідальності, відсутність державних та недержавних організацій, які б могли допомогти. 4. Майже вдвічі більша частка українських підприємств вважає, що в найближчій перспективі державі потрібно стимулювати залучення бізнесу для його активнішого втручання у вирішення соціальних проблем, ніж тих, хто вважає, що держава має сама вирішувати соціальні питання, для чого треба посилити податкову дисципліну та залучати більше доходів у казну. У порівнянні з 2005 роком, частка тих, хто вважає, що держава має сама вирішувати соціальні проблеми, посиливши податкову дисципліну, трохи зменшилася з 50,8 % у 2005 році до 37,3 % у 2010 році. 5. На думку двох третин українських підприємств, у найближчі роки для розвитку соціальної відповідальності потрібно розробити й ухвалити Національну стратегію розвитку соціальної відповідальності, запровадити окрему просвітницьку програму для споживачів, провести широку інформаційно-просвітницьку кампанію з питань соціальної відповідальності, впровадити принципи соціальної відповідальності в діяльність органів державної влади і місцевого самоврядування. Найменша частка українських підприємств вважає за доцільне запровадити окрему посаду з КСВ в організаціях та збільшити їх бюджети на програми / заходи з КСВ.

55


ПЕРЕЛІК МАЛЮНКІВ І ТАБЛИЦЬ

56

Номер

Назва

Сторінка

Табл. 1.

Параметри вибірки.

Табл. 1.1.

Поінформованість підприємств про соціальну відповідальність в розрізі розміру підприємств.

13

Табл. 1.2.

Поінформованість про соціальну відповідальність залежно від регіону.

13

Мал. 1.1.

Розподіл відповідей респондентів на запитання «На Ваш погляд, що означає вираз «соціальна відповідальність бізнесу?».

14

Мал.1.2.

Розподіл відповідей на запитання «Наскільки Ви згодні з наступним твердженням про роль бізнесу в житті суспільства?»

16

Мал.1.3.

Розподіл відповідей респодентів на запитання «Вважається, що бізнес є соціально відповідальним, якщо він несе відповідальність за вплив своїх рішень і діяльності на суспільство і навколишнє середовище та сприяє сталому розвитку суспільства. Яке Ваше ставлення до цього?»

17

Мал. 2.1.

Розподіл відповідей на запитання «Чи здійснює Ваша компанія заходи, які можна віднести до соціально відповідальних? Під соціально відповідальними заходами розуміється добровільна (лише за власною ініціативою) турбота підприємства про соціальні (добробут працівників та громади) та екологічні проекти.

20

Мал. 2.2.

Впровадження соціальної відповідальності, регіональний розподіл.

20

Мал. 2.3.

Розподіл відповідей на запитання «Які з наступних соціально відповідальних заходів здійснює Ваша компанія?»

21

Мал. 2.4.

Частота здійснення соціально відповідальних заходів.

22

Мал. 2.5.

Розподіл відповідей респондентів на запитання «Які чинники спонукають Вашу компанію здійснювати соціально відповідальні заходи?»

23

Мал. 2.6.

Розподіл відповідей респондентів на запитання: «Чому програми / заходи із соціальної відповідальності не є актуальними для Вашої компанії на даний момент?»

26

Табл. 3.1.1.

Розподіл відповідей на запитання «Чи робила Ваша компанія соціальний (нефінансовий) звіт протягом останніх 5 років?»

29

Табл. 3.1.2.

Розподіл відповідей на запитання «Чи мала Ваша компанія спеціальний бюджет (або статтю в бюджетах за напрямком) для проведення програм / заходів із соціальної відповідальності протягом останніх 5 років?»

29

Табл. 3.1.3.

Розподіл відповідей на запитання «Як змінився бюджет (стаття в бюджеті), який був призначений на проведення програм / заходів із соціальної відповідальності протягом останніх 5 років?»

30

Мал. 3.2.1.

Соціально відповідальні заходи компаній.

32

Мал. 3.2.2.

Розподіл відповідей на запитання «Яким чином Ви дізнаєтесь про думку Ваших працівників про важливі рішення, прийняті на підприємстві та діяльність підприємства взагалі?»

33

Мал. 3.2.3.

Розподіл відповідей на запитання «Які практики балансу між роботою і сім’єю впроваджуються у Вашій компанії?»

34

Табл. 3.2.1.

Розподіл відповідей на запитання «Чи забезпеченні рівні умови на Вашому підприємстві для жінок і чоловіків?»

34

Мал. 3.3.1.

Розподіл відповідей на запитання «Як саме Ваша компанія допомагає розвитку регіонів (громад, місцевостей), де вона знаходиться або має свої філіали, представників?»

36

Мал. 3.4.1.

Розподіл відповідей на запитання «В яких напрямках Ваша компанія здійснювала екологічно відповідальні заходи?»

37

Мал. 3.5.1.

Розподіл відповідей на запитання «Які саме заходи проводить Ваша компанія щодо підвищення своєї відповідальності перед споживачами?»

39

Табл. 3.5.1.

Розподіл відповідей на запитання «Як часто у Вашій компанії розглядались питання соціальної відповідальності щодо клієнтів або партнерів по бізнесу протягом останніх 5 років?»

40

Табл. 3.6.1.

Розподіл відповідей на запитання «Чи враховує Ваша компанія при розробці та впровадженні політики соціальної відповідальності інтереси таких зацікавлених сторін?»

41

Мал. 3.6.1.

Розподіл відповідей на запитання «З ким Ви співпрацюєте, коли розробляєте Ваші програми / заходи із соціальної відповідальності?»

42

Мал. 4.1.

Розподіл відповідей на запитання «Що або хто, на Вашу думку, може стимулювати соціальну відповідальність Вашого бізнесу?»

47

Мал. 4.2.

Розподіл відповідей на запитання «Які перешкоди є найсерйознішими при здійсненні програм / заходів із соціальної відповідальності Вашої компанією?»

49

1



Corporate social responsibility 2005-2010