More popular than you'd think

CHARITY and philanthropy are often publicised by companies as their main socially responsible activities. But donations are only a part of corporate social responsibility (CSR). Conversely, companies are sometimes engaged in a whole range of activities which, in fact, amount to CSR - but just don't label them as such.

CHARITY and philanthropy are often publicised by companies as their main socially responsible activities. But donations are only a part of corporate social responsibility (CSR). Conversely, companies are sometimes engaged in a whole range of activities which, in fact, amount to CSR - but just don't label them as such.

Large companies with foreign backing are often the main drivers in implementing the principles of CSR and raising awareness in the field. Awards for responsible businesses are even becoming a point of prestige for companies, and a way for them to differentiate themselves from the competition.

NGOs regard this as a positive development, since it encourages the idea of CSR to spread to the small and medium-sized business sector as well.

Companies sometimes cite money as the main reason for not adopting CSR. However, it is possible to implement CSR even with limited resources; the most important thing is to have a clear strategy, say NGOs and companies already active in CSR.

"We strongly recommend that companies focus on creating a formal CSR strategy that defines goals and methods for implementation, and evaluation or measurement," reads the Baseline Study on Corporate Social Responsibility Practices in Slovakia published by the UNDP in 2007. "Such a strategy is crucial to improving CSR activities; it enables companies to incorporate CSR into their core business, which is a keystone CSR success."

The topic of CSR is becoming fashionable in business circles, said Eduard Marček from Panet, an NGO, adding that businesses are often driven by the example of their competitors.

The awards which companies attract for their commitment to CSR are also a motivating factor. Two awards - the Via Bona prize granted by the Pontis Foundation, another NGO, and an award by the Ministry of Labour, Social Affairs and Family entitled "Family-Friendly Employer" - are the most well-known.

"Companies pride themselves on getting the awards in full view of competitors, but more importantly of customers," said Marček.

While major companies with foreign backing are quite familiar with CSR, awareness among the local business community is relatively low, the UNDP said in its study.

The UNDP emphasised that this does not mean Slovak companies do not act responsibly; in fact, there is a tradition of corporate social stewardship. Many firms financially support various charity and community projects; they communicate with the public and have strong employee protection policies.
"Some companies are not aware of the term but in fact practise CSR," reads the UNDP study. "Other companies recognise the term and even claim to practise CSR, but in reality they are engaged in philanthropy or charity, or they have simply assigned their 2 percent tax dividend to an NGO."
The reason why CSR strategies are undeveloped in most cases is that companies do not recognise the concept of CSR, according to the UNDP. Companies also do not identify the need for a CSR strategy in the first place.

Small companies and indebted state-owned firms often blame their inability to do more on a lack of funds. They are also under the impression that CSR is easy to implement "if you have money", according to the UNDP.

"[While] CSR brings increased costs for companies, from a long-term point of view many of those costs pay off or even result in additional returns," Marček told The Slovak Spectator.

Company strategy

Major CSR initiatives driven by business appeared in Slovakia mainly after 2004, when the Business Leaders Forum (BLF) in Slovakia was founded by 11 major companies at the initiative of the Pontis Foundation. The BLF still plays a leading role in promoting CSR, according to Corporate Social Responsibility in the Carpathian Region, a study published in 2007 by Panet and The Carpathian Foundation Slovakia.

Companies in their CSR strategy might focus on one field but it is very useful to build relationships and cooperation in various areas such as employees, the environment, suppliers and customers, said Marček of Panet.

"This approach - including various areas within the realm of corporate social responsibility is probably more balanced and secures long-term benefit," he added.

Large companies, as the biggest promoters and followers of the CSR approach in Slovakia, mainly stress a sustainable development as being among their goals. They see the evaluation process of their CSR activities as crucial for getting feedback and for setting future policy for CSR. The largest opportunity for increasing awareness is among small and medium-sized enterprises, since almost all large companies are already involved in CSR, the companies say.

The strategy of Slovak Telekom (ST) has evolved from the CSR principles of its parent company, Deutsche Telekom. In 2007, as in the last four years, ST targeted mainly corporate philanthropy, support for digital literacy, support of unique sports and cultural activities, corporate volunteering with the aim of support activities in selected communities, and support of selected environmental projects.

"CSR is part of the philosophy and strategy mainly of large corporations," said Ján Kondáš, director for corporate communications at Slovak Telekom. "There is still large potential in the small and medium-sized enterprise segment to get involved in CSR. Each firm, even smaller ones, can contribute to the community in which it operates, for example, through the voluntary help of its employees to improve quality of life in its region."

A company should have a long-term and clearly defined strategy in the area of corporate social responsibility, according to Kondáš. However, it should also be able to also respond to unexpected and short-term challenges, he added.

Slovak Telekom has published an independent annual report on CSR each year since 2004. Publishing a report is the most natural way to evaluate the effectiveness and success of its CSR activities, according to Kondáš.

The CSR strategy of mobile operator Orange rests on several pillars. They include respecting the needs of and responsibility towards employees, communities, customers, suppliers, and the environment. The other pillars are philanthropy and charity, and reporting and independent evaluation, said Richard Fides, spokesman for Orange.

"We use a long-term, flexible, and qualitative approach in all our programmes," Fides told The Slovak Spectator.

According to Fides, his company has defined evaluation indicators for each part of its business, including CSR. These indicators are based on experience and enable it to measure its effectiveness as precisely and realistically as possible. "Following these indicators gives us a complex view of our company, as well as a view of critical areas in which our company can improve," he said.
Each company should approach its business in line with ethical rules recognising how its business affects not only customers but its whole network of suppliers, employees and the environment, said Andrej Gargulák, spokesman for T-Mobile, another mobile operator.

"The corporate responsibility of our companies stands on three main pillars, which are corporate responsible activities in social, environmental and economic areas," he said. "Our goal is to introduce in all business activities actions which take into consideration social, ethical, and environmental aspects of business contributing to the development of society and sustainability.
T-Mobile, according to Gargulák, does not use any of the internationally approved methods of evaluating CSR projects. Instead it relies solely on the results of customer satisfaction surveys.
For Slovnaft, an oil refinery, the environment, research, ethics and transparency, support of children and youth, culture, and national and regional values are the crucial areas of its CSR activities.

"Some activities are connected to the business we operate in, but a large portion of our projects is outside that area," said Anton Molnár, Slovnaft's spokesman.

Slovnaft regards corporate responsibility as a way of managing its business activities so as to integrate economic, social, and environmental aspects. These should be in line with principles of sustainability and have a positive impact not only on the company's performance but the whole environment comprising employees, partners, the city and the whole region, said Molnár.

The evaluation of CSR activities provides important feedback on whether their goals were successfully achieved, said Molnár. If they were not reached, the evaluation shows why the activity was not successful, what could have been done better, and what the company learned.

"And this is the point of evaluating CSR activities - to continue learning, with the aim of doing things better," he said.

The top management of Slovnaft also takes part in quarterly evaluation of philanthropic projects.
Východoslovenská Energetika (VSE), a regional energy distribution company, focuses in its CSR on youth, the future and education. This focus has come from its parent company, RWE. However, the selection of priorities also reflects the needs of the region in which VSE operates, said Andrea Danihelová, VSE's spokeswoman. VSE intends to make a long-term commitment to CSR, she added.

In evaluating CSR activities, VSE uses standard methods for assessing community investments based on the so-called London Benchmark Group.

However, intense communication with those it supports is also inevitable, she said, adding that it is not the volume of assistance provided but whether the goals were fulfilled which proves the success of a project.

"Through evaluation a company can see if it applies its CSR policy in a correct way over a longer period of time. Without feedback it is impossible to talk about a responsible approach or about building a long-term relationship," Danihelová told The Slovak Spectator.

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