CSR in Romania – between illusion and reality With particular focus on Small and Medium Sized Enterprises Discussant: Dina Ursua LIDEEA Development Actions

Corporate Social Responsibility (CSR) definition Source: UNDP Romania Study “(Corporate) Social Responsibility in Romania. Situation Analysis and Current Practices Review. With Particular Focus on Small and Medium Sized Enterprises”, November 2011; “Corporate Social Responsibility is the continuing commitment by business to contribute to economic development while improving the quality of life of the workforce and their families as well as of the community and society at large.” (World Business Council for Sustainable Development); “Being socially responsible means not only fulfilling legal expectations, but also going beyond compliance and investing ‘more’ into human capital, the environment and the relations with stakeholders.” (European Union, Green paper - Promoting a European framework for CSR).

SR in Romania – with focus on SME’s The term “Social Responsibility” (SR) is used in relation to SMEs, as defined in the ISO international standard; Social responsibility is the responsibility of an organization for the impacts of its decisions and activities on society and the environment, through transparent and ethical behavior that:  contributes to sustainable development, including health and the welfare of society;  takes into account the expectations of stakeholders;  is in compliance with applicable law and consistent with international norms of behavior  is integrated throughout the organization and practiced in its relationships. (ISO 26000: 2010)

CSR in Romania – with focus on SME’s In Romania the concept of CSR originates in the 1990s when many NGOs (particularly with humanitarian business objectives) were founded with the assistance of international public or private institutions; This was followed during the 2000s, as preparation for EU integration; The private sector’s implementation of responsible practices began to be stronger after EU integration and was mainly led by the engagement of multinational companies who transferred their organizational culture and practices from headquarters at a local level and, later on, also fueled by the opportunity to access EU funds; The understanding and application of CSR by each organization in Romania is influenced by many factors such as size, international exposure (i.e. supply chain or customers), regional position in the country, time horizon since initial contact with the concept etc.

CSR in Romania – with focus on SME’s Responsible corporate behavior was first evaluated in Romania based on commercial and corporate image and reputation considerations, rather than a stakeholders’ interest and sustainability approach; In Romania, the field of CSR/SR is still at its early stages of development; The CSR/SR instruments most frequently considered are: corporate codes of conduct, social investments, audit and social and ecological reporting; Areas most frequently covered by CSR/SR initiatives in Romania are children welfare, education, art, religion, environment and sport. CSR/SR initiatives do not stop only at community investment, but address supply chain responsibility, customer services and satisfaction, employee welfare as well.

CSR in Romania – with focus on SME’s Research conducted in 2006 on 205 Romanian companies, large organizations and SMEs Sample description of research participants:

Motivation for CSR/SR implementation in Romania

Forms and Types of CSR/SR One of the existing approaches to classify SR initiatives refers to the motivation/objectives followed by launching respective activities:  Compliance: managing business operations to create benefits for society in conformance with legal standards  Best practices: managing business operations to create additional benefits to society due to the motivation of the owner or the expectations of society  Innovation: developing new products or services that offer benefits to society as a specific part of the customer value proposition  Voluntary support: voluntary contributions of money, time, products or services that are either (a) acts of good citizenship that do not address elements of the competitive context, or (b) contextual investments that strengthen the future competitiveness of the company

Forms and Types of CSR/SR Another type of classification is based on the “target group” of SR activities, i.e. the beneficiaries of the initiative. It is argued that by nature SMEs are closer to and more dependent on their customers, employees, neighbors and other key stakeholders than larger, more impersonal enterprises, and so need to be more responsive to those stakeholders.

Challenges regarding CSR in Romania Although significant progress has been made since EU accession in integrating responsible practices within core company operations, there are significant challenges that need to be addressed by all key actors, such as:  raising awareness on the meaning of CSR/SR and the holistic approach entailed by the implementation of responsible practices;  raising awareness on the need and benefits of strategically incorporating responsible practices within business objectives and operations to ensure sustainable success;  increasing the transparency, monitoring and evaluation of the impact of CSR/SR initiatives on all stakeholders involved/impacted;

Social Responsibility for LIDEEA For LIDEEA, social responsibility means „concern for the customers, partners, collaborators and our employees, and concern for the community and environment in the development of a profitable and sustainable business, at the national and international level, while contributing to increased quality of life of employees and on a positive impact on society." LIDEEA is one of the 8 CSR Resources Centers in Romania.

Social Responsibility for LIDEEA The keywords in the package of services designed and offered by LIDEEEA in order to satisfy the needs of customers are: Development – Change – Performance, found in LIDEEA’s matrix of benefits.

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