Government promotion and regulation of Corporate Social Responsibility in Russia
Zhou Y. N., Киман Д. Ю. Government promotion and regulation of Corporate Social Responsibility in Russia // Молодой ученый. 2014. №6. С. 369-371.
Speaking about government regulation of corporate social responsibility (CSR), we should pay attention to the fact that there are two opposite views on the need for state regulation of corporate social responsibility. The first view is based on the fact that corporate social responsibility-a purely voluntary activity and government intervention and pressure in its implementation can only lead to a negative effect, and failure to conduct a comprehensive course of corporate social policy. The second point of view comes from the fact that in some areas of the corporate social responsibility centralized regulation is quite effective (for example, in the field of consumers protection), as well there are precedents, indicating a need for intervention of state control (for example, the case of General Electric (GE), the corporation was accused of polluting the Hudson river. GE insisted on sharing responsibility, while the cleaning operation of the river was standing still).
In Russia, corporate social responsibility is not established as a mandatory behavior strategy at the federal legislative level, but there are a number of documents relating to the application of corporate social responsibility by companies. But these documents are mostly for suggestive and referential purposes. Individual areas of corporate social responsibility are governed by various branches of law, but there are no documents at the federal level, covering all areas of the corporate social responsibility of companies in the Russian Federation.
At the global level there are five forms of positive government influence on the development of CSR: communicator, sponsor, partner, regulator and an example.
Regulation of corporate social responsibility does not mean requirements of the relevant investment. Although, for example, in India, 2 % of its net profits from the next fiscal year are already required to spend on CSR programs.
To some extent, through the adoption of the national strategy, the government can offered to prescribe minimum standards for corporate social responsibility, such as environmental and safety standards. Strategy should also identify unacceptable business behavior. The strategy should pay attention to the laws related to CSR, which can help promote social responsibility among companies.
Encourage through tax incentives, for example, through the use of eco-certification of products or manufacture modernization
State may initiate a dialogue, for example, to initiate a broad discussion of various issues that are important for the development of the country and its competitiveness. Additionally, it can support public-private partnerships for the development of sectoral guidelines for CSR.
State can and should undertake obligations on implementation of international principles and treaties. For example, support and implement at the local level UN guidelines on business and human rights.
Educational programs aimed at increasing the awareness of companies and stakeholders of the importance of CSR are extremely important. Individual courses are necessary for small and medium enterprises (SMEs). Moreover, we can talk about grants for SMEs on CSR development — this is the way German government went.
Particular attention should be paid to the criteria of social responsibility for companies whose shares are quoted on the stock exchange.
Since the state today is the largest employer, it should start with itself.
One of the ways of interfering in corporate social responsibility by the government is promoting of CSR.
Encouraging of business community and civil society for socially responsible behavior, the state uses a variety of tools and mechanisms to promote, from soft forms of regulation and motivation to certain legal requirements. They are:
- Informing the society about the role of CSR and the best examples of socially responsible businesses. For this purpose, special information centers, web sites are created, they publish brochures, hold conferences, seminars and roundtables. Government appeals to media to inform the public about the best national and international practices in the field of CSR.
- Promotion and support of additional voluntary business initiatives in the field of CSR. Popular tools are awarding special state awards for the contribution of business to development of CSR, the financial support of social initiatives, the introduction of a mechanism of social and environmental labels, confirming the commitment of producer in CSR.
- Educational, research and methodological support. For these purposes, seminars and trainings on CSR for civil servants, representatives of business, members of the public /professional associations and unions are conducting in many countries to support scientific researches. There was incorporated «Corporate Social Responsibility» section in the curricula of various departments of universities and colleges. The implementation of evaluation systems and reporting on CSR is supported through the development of teaching materials and consultations.
- Organization of dialogue and partnership between the state, business community, professional and public associations and other stakeholders in the implementation of CSR to consolidate resources and achieve more significant results.
- Development of international cooperation on CSR initiatives through international organizations initiatives support, including adherence to the UN initiative «Global Compact», participation in international events.
- Promoting the implementation of system of international governance standards, financial reporting; product certification and promotion of enterprises according to international standards; promotion of the system of international social and environmental labeling to ensure equal rights of trade in different countries.
- Using of tax and investment instruments is the most effective way to motivate socially responsible business conduct. Social costs of businesses, charity donations, earmarked contributions to non-profit organizations, foundations. The state participates in the financing of social projects through business subsidies, preferential loans and tax incentives. The most important non-tax preference for socially responsible business is considering CSR when selecting companies for the execution of public contracts.
The most significant results were achieved by countries that use a systematic approach in the development of CSR, including:
- implementation of CSR principles into the work of government agencies in the performance of basic functions, thus the government’s pattern shows the importance of these processes for the country;
- flexible regulation of CSR based on the recommendation and maintaining the principle of voluntariness;
- moral and material incentives for business for implementation of CSR principles into business practices;
With regard to tax preferences, in Russia this kind of motivation of social responsibility of business is underdeveloped. Expenses deducting income taxes include training costs, but only in educational institutions with the proper state license. Costs associated with charity activity, are considered to be other costs and expenses are paid out of net profits, which, naturally, is not conducive for development of CSR in this sphere.
Another way of government interference in CSR of business is Legal regulation of CSR.
Most notable Russian documents describing and regulating social behavior of enterprises are:
- Social Charter of Russian Business, developed by the Russian Union of Industrialists and Entrepreneurs (RUIE);
Social Charter — is a set of fundamental principles of socially responsible business practices (the issue of economic and financial sustainability, human rights, product quality, customer relations, participation in local community development and environmental protection), which are applicable in the daily activities of any organization, regardless activity profile and ownership. Currently, the Social Charter of Russian Business is the document recognized by the UN as fully complied with United Nations Global Compact: the company acceded to Social Charter are automatically registered as joined The Global Compact.
- Codex of Business Ethics developed by Russian Federation Chamber of Commerce (RF CC) «12 principles of doing business in Russia»;
- Memorandum on the principles of corporate social responsibility, approved by the Russian Managers Association;
In 2011, the Russian Organization for Quality (ROQ), immediately after the release of the ISO 26000 international standard presented ICCSR- 08260008000 or CSR. The provisions of this standard fully comply with the requirements of ISO 26000:2010, regarding right to work, social safeguards, labor protection, manufacturing of production and services of good quality, environmental protection and resource conservation, participation in social activities and local community initiatives support, social management.
- «Basic Performance Indicators. Recommendations for using in corporate sustainability reporting» designed by RUIE to assist companies in the working on non-financial reports (social, sustainable development, environmental). Their use enables companies to provide information about their activities on «triple bottom line» — economic, social and environmental performance — in accordance with the principles of sustainability reporting.
At the same time basic data on corporate social responsibility is presented in a general and consistent form, is disclosed in the non-financial report that includes, along with the economic results, non-financial indicators describing the efficiency impact from placing of intangible assets of companies.
One of the areas of legal regulation of corporate social responsibility was its consolidation in regional laws aimed at the development of small and medium-sized businesses. Typically, it refers to the mechanism of social partnership in the region and charity policy. Among the most important local laws are the following:
- Law of the Vladimir region number 90 –OЗ from October 07th 2010 «On the development of small and medium-sized businesses in the Vladimir region» in the list of the main forms of authorities and business cooperation labeled «interaction in the development of mechanisms to encourage small and medium enterprises engaging in charities, patronage and support of community initiatives ";
- Sakhalin region Law number 9-ЗО from February 2nd 2009 «On support and development of small and medium enterprises in the Sakhalin region» pays attention to the need to aware the population about the participation of small and medium enterprises in the implementation of social projects, as well as their participation in charity activities;
- Draft Law of the Republic of Sakha (Yakutia) «On the social responsibility of business». Its main purpose is legal regulation of relations between government, business and the population in the social, economic and environmental spheres.
As for regional level, in some Russian regions they have their own projects in the field of corporate social responsibility, its assessment and management by government and local administration, public organizations.
Among them are «Methods of estimating of voluntary corporate social responsibility of organizations in Saratov region». Resolution of the Government of Saratov region from March 7th 2008 № 88-П «On the voluntary corporate social responsibility of organizations in Saratov Region» adopted the method and the procedure for determining the annual rating of voluntary corporate social responsibility of organizations.
Government of Irkutsk region, Irkutsk regional division of employers «Manufacturers and Entrepreneurs Partnership» and the Irkutsk regional association of trade union organizations conduct regional competition «For high social efficiency and development of social partnership» based on a jointly developed condition. The purpose of the contest — to draw attention to social issues and to extend the positive experience of winners and prize-winners in this field, to encourage these organizations.
Union of Employers of the Rostov region — regional RUIE office developed and adopted the «Codex of socially responsible businesses in Rostov region». The main business mission is formulated in the Codex — to achieve sustainable development of independent and responsible companies, which meets long-term economic interests of business, promotes safety and well-being of residents of Rostov region, preserves the environment and protects human rights.
Special attention should be paid at «Corporate social responsibility standard of the Voronezh region», its main goal is to create a system vision of corporate social responsibility and activate socially responsible behavior of enterprises in Voronezh region.
The format of such regional instruments is different: in the Saratov and Irkutsk regions they put emphasis on quantitative indicators that express social responsibility, Rostov — on the main provisions of the declaration describing the content of socially responsible behavior of companies, in Voronezh standard the technique proposed in Krichev standard is considered as well as researches of colleagues from Saratov.
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