Corporate Social Responsibility

World practice and the current problems in Azerbaijan

Ziya AliliEconomist-researcher

Center for Economic and Social DevelopmentThis project is funded by the

Konrad Adenauer Stiftung (KAS)

What is CSR?

What is CSR?

European Union and World Bank:• voluntary obligation• to support sustainable economic

development; • to integrate business activity into social and

economic aspects;• to improve common welfare of society

What is CSR-2

«Free choice of business towards improving social welfare of society by using relevant tools and corporate resources in order to manage business»

Phillip Kotler

The history of CSR

• 60-70-80 years;• Ecology;• Child labor;• Naomi J Kley, «NO Logo»

Importance of CSR

Environics International, 26 thousands respondents, 2001:• image of a company: 49%;• formation of the brand: 35%;• financial situation: 10%;Cone Roper the survey of consumer tastes, 1993:• 78 % -ready to buy the product of the company that

attempts any kind of social activity; • 66 %- will refuse their favorite “brands” in favour of

other companies implementing CSR policies;

Types of CSR (Kotler)Internal External

• Security of employment;• Stability of wages;• To support socially valuable wage;• Additional medical and social insurance

of employees;• To improve human resources by training

programs, to organize preparation courses;

• To help employee in critical moment;

• Sponsorship and corporate charity• Participation in the protection of

environment• Mutual connection with local

community and local government• Preparation for participation in the

elimination of emergency situations• Responsibility on consumers of

goods and services (qualitative production)

CSR: World practice

• America: Selfhood, charitable programs;• Germany: ignorance of CSR by society, rating:

DHL, BASF;• Austria: ecology;• Russia: The Collegium of Commerce, Social

Charter, honor code of bankers;• Ukraine: newly established legal framework;• Kazakhstan: encouraged actions.

CSR IN AZERBAIJAN

CSR in Azerbaijan

• Haji Zeynalabdin Taghiyev• Murtuza Muxtarov• Agamusa Naghiyev• ****• TNC and local companies

CSR in Azerbaijan...SOCAR

• Repair of rural schools (Balakan region)• Neftchi Health and Sport Center• Assistance to internally displaced persons (IDPs)

CSM in Azerbaijan...TNC

• Oil companies: ecology• BP: Project Management School• World Bank, EBRD, İFC• Joint projects;

CSM in Azerbaijan...Mobile operators

• Bakcell: – Sport for Women, 3200 women, 8 regions– Entertainment of children: 20 districts

• Nar Mobile:– Art festival, 7 districts, 17 artists, 40 works;– Organization of mountain climbing competition; – «Disability does not matter».

• Azercell– Holiday gifts;

CSR in Azerbaijan : Current problems

• The weakness of the legal framework;

• Low awareness of entrepreneurs;

• Lack of experts;

• Lack of accountability;

• Lack of relevant literature.

CSR in Azerbaijan: Survey, 2008• 100 companies, 38 answers;• 74.1% do not publish report;• 25.9% publish report.Barriers to CSR:• institutional barriers-8 respondents, • social barriers-7;• economical barriers-5 respondents; • Political barriers-2 resp.

CSR in Azerbaijan: Survey, 2008

• Encouraged actions:– 74.3% tax exemption;– 20% tax water down;– 5.7% other incentives (?)

CSR in Azerbaijan: State

• Ministry of Economic Development and the International Finance Corporation:– Azerbaijan Corporate Management Project;

• Google cache link: http://webcache.googleusercontent.com/search?q=cache:oajvjctHDJUJ:www.economy.gov.az/index.php/en/economy/coperate-governance/19-economy/korporativ-idar%25C9%2599etm%25C9%2599/100-korporativ-idar%25C9%2599etm%25C9%2599-m%25C9%2599c%25C9%2599ll%25C9%2599si

+&cd=1&hl=az&ct=clnk&gl=az • Ministry of Economic Development : The Code of

Corporate Ethics;• Parliament: The Law on CSR (?);• NGO Forum: The Charter on CSR (?);

CSR in Azerbaijan: Solution of problems

• Corporate Social Responsibility Azerbaijan, www.csraz.com– Organization of trainings and seminars on CSR– Researches on CSR;– Consulting services on CSR;– Preparation and organization of CSR projects;– Spreading information about CSR.

• Legislative projects

CSR in Azerbaijan: The result and Suggestions

• Encouraged actions should be planned and fulfilled; • Tax incentives should be applied;• Trainings should be conducted;• Public and private sector should join international

calls; • Code of social responsibility should be motivated,

the development of corporate governance standards. Companies should be encouraged to increase the social accountability;

The result and suggestions…cont’d

• Government and local regulatory bodies should report annual priorities in the field of CSR;

• While implementing CSR policy in Azerbaijan foreign transnational corporations should give more priority to cooperation with local civil society institutions;

• Literature should be published in Azerbaijan language and CSR as a subject should be tutored economic faculties in order to overcome the weakness of CSR culture;

Questions?Ziya Alili

Economist-researcher;Center for Economic and Social Development;

AliliZiya@CESD.AzImage credits, in order of appearance in slides:• Business Ethics.com;• Wall street journal;• Charitystar.com• Wikipedia (2)• ERC.com• Veryicon.com

This project is funded by the Konrad Adenauer Stiftung (KAS)