Comparing state of CSR in Baltic states and Finland Audronė Alijošiutė LAVA, Chair of the Board Nordic CSR Summit 2015, Vilnius

"WHEN THE WIND BLOWS THERE ARE THOSE THAT BUILD WALLS AND THEN THERE ARE THOSE THAT BUILD WINDMILLS” Responsible Business Summit 2013

About LAVA – Lithuanian responsible business association Nordic CSR Summit 2015, Vilnius. A. Alijosiute

It`s a great mix of 20 large and small, local and foreign, public and private businesses and non profit organizations in both production and service industry. Partner:

LAVA Legal status gained in August, 2013 Member of State Progress Council Focal point of UN Global compact Cooperation with Swedish and Finnish CSR networks

LAVA - member of CSR Europe CSR Europe's network of 42 national partner organizations, reaches out to more than 10,000 companies in Europe. Conecting companies and networks and mainstreaming CSR

CSR trends in Baltics Nordic CSR Summit 2015, Vilnius. A. Alijosiute

PREHISTORY Nordic CSR Summit 2015, Vilnius. A. Alijosiute 2014.10.23 Rygoje LAVA ir Latvijos įmonių socialinės atsakomybės platforma „CSR Latvia“ bei Estijos atsakingo verslo forumas pasirašė bendradarbiavimo susitarimą, kuriuo siekiama bendradarbiauti stiprinant atsakingo verslo reikšmės pripažinimą Baltijos šalyse Nordic CSR Summit 2015, Vilnius. A. Alijosiute

“Comparing state of CSR in Baltic states and Finland“ Financed by the Nordic Council of Ministers’ Grant Programme for Nordic-Baltic Non-Governmental Organization's (NGO) Cooperation 2014 Estonia with financial contribution of LAVA, CSR Estonia and CSR Latvia Nordic CSR Summit 2015, Vilnius. A. Alijosiute

Background The aim of the survey is to find out understanding and views towards social responsibility and sustainability of business leaders Based on Finland CSR network experience: 2013, 2014 The research framework was built on the global social responsibility standard, ISO 26000 Data was collected by electronic TNS-Gallup questioners between July-September 2015 In Baltics nearly 200 companies participated compares current state of Corporate Social Responsibility (CSR) among businesses in Estonia, Latvia, Lithuania and Finland. Nordic CSR Summit 2015, Vilnius. A. Alijosiute

Respondents 1/3 - large companies Majority limited liability companies Mostly (50%) operating in Lithuania and Latvia and more international in Estonia More than half of the respondents were middle sector managers. Manufacturing industry: 30 – 40% Nordic CSR Summit 2015, Vilnius. A. Alijosiute

ENGAGEMENT: CSR is an important issue, but…. For more than half – it is important CSR – as a brand building activity and an instrument to improve work satisfaction. 1/3 of respondents see CSR as a starting point for their business in Lithuania, while in Latvia and Estonia more than half of respondents indicated importance of it. Risk management is becoming more important FIN- 71 % In Baltics - 54% Nordic CSR Summit 2015, Vilnius. A. Alijosiute

ENGAGEMENT: Who is driving CSR ? In Finland the least important driver… Trade Unions. It is No1 in Baltics Top management isn’t important ( No1 in Finland) Also in Baltics are important: Business organizations Legislation NGO Top managen Nordic CSR Summit 2015, Vilnius. A. Alijosiute

Responsible business practices Dominating themes Labor practice Environmental issues Human Right Legitimate procedures In Finland Environemnt , fair labour practicdes and labour Strong majority - labour practice The Environmental issues ( 72%) Human Right (62%) Legitimate procedures (76%) Nordic CSR Summit 2015, Vilnius. A. Alijosiute

Responsible business practices: management practices are used Finland Baltics Setting qualitative and/or quantitative targets for CR Applying a code of conduct A member of the executive group is in charge of CR Applying a code of conduct LT and EST : Setting qualitative and/or quantitative targets for CR (less than half); Publishing a CR report or integrated Nordic CSR Summit 2015, Vilnius. A. Alijosiute

Responsible business practices: which guidelines are used Domination of ISO 14000 and OHSAS 18001 In Lithuania aprox. ½ of the companies are applying UN Global Compact principles. One fifth of companies follow none of the CSR international operational principles. Nordic CSR Summit 2015, Vilnius. A. Alijosiute

Impacts monitored Achievements of CSR targets are monitored mainly through employee and customer satisfaction and company image Less than 1/5 of the companies follows the costs and as many see increase in sales due to CSR activities Nearly ½ of the companies believe that their CSR practices make a social impacts Less than half are valuing indexes, competition and ranking lists Similar in finland Nordic CSR Summit 2015, Vilnius. A. Alijosiute

Impacts: benefits from CSR Majority of the companies indicated better image of the sustainability of the company as the biggest benefit of CSR practices 20-30% consider CSR as a facilitating factor for innovations and development of new products in the company Nordic CSR Summit 2015, Vilnius. A. Alijosiute

Challenges: managerial aspects Measuring the impacts is seen as biggest challenge Costs also dominate among Baltic respondents 1/3 acknowledges the importance of integration of CSR strategy No 2 in Finland Finland dominat is integration - in est no 3, no 4 in lv , lt Nordic CSR Summit 2015, Vilnius. A. Alijosiute

Challenges: themes LT : CSR communication and brand building 37% Stakeholder relations, environmental impacts – 28% LV: Fair competition – 31%;Supply chain - 29% EST: Work satisfaction – 60 %,stakeholder relations - 45% Supply chain management! Communications and brand building! Nordic CSR Summit 2015, Vilnius. A. Alijosiute

Future trends Importance of CR during the next 5 years will increase , accordingly investments in CSR will be bigger EU directive 2013/34/EU on non financial disclosers is not known for more than 40 % of respondents Nordic CSR Summit 2015, Vilnius. A. Alijosiute

Conclusions CSR is important but is seen as a brand building activity and assists in improvement of work satisfaction. Labor issues seen as the most important responsibility theme Need for better management of CSR, reporting Need for better management of CSR: Top mangement needs to take lead, Number of companies adopting international CR principles and guidelines, challenge how to measure

Conclusions There is an evidence that more than 1/3 of companies has some strategy on CSR. Less than 1/3 third says that the responsibility aspects are embedded in the incentive and compensation systems of the management. not enough information about new frameworks that has been developed Nearly half actually practice multi-way dialogue with NGO CSR, believed will remain or be even more important! Need for better management of CSR: Top mangement needs to take lead, Number of companies adopting international CR principles and guidelines, challenge how to measure

Conclusions CSR is important but is seen as a brand building activity and assists in improvement of work satisfaction. Labor issues seen as the most important responsibility theme Need for better management of CSR, reporting Need for better management of CSR: Top mangement needs to take lead, Number of companies adopting international CR principles and guidelines, challenge how to measure

Conclusions There is an evidence that more than 1/3 of companies has some strategy on CSR. Less than 1/3 third says that the responsibility aspects are embedded in the incentive and compensation systems of the management. not enough information about new frameworks that has been developed Nearly half actually practice multi-way dialogue with NGO CSR, believed will remain or be even more important! Need for better management of CSR: Top mangement needs to take lead, Number of companies adopting international CR principles and guidelines, challenge how to measure

Conclusions CSR is important but is seen as a brand building activity and assists in improvement of work satisfaction. Labor issues seen as the most important responsibility theme Need for better management of CSR, reporting Need for better management of CSR: Top mangement needs to take lead, Number of companies adopting international CR principles and guidelines, challenge how to measure Nordic CSR Summit 2015, Vilnius. A. Alijosiute

Conclusions There is an evidence that companies has some strategy on CSR The responsibility aspects are embedded in the incentive and compensation systems of the management Not enough information about new methods on CSR measurement Nearly half actually practice multi-way dialogue with NGO CSR, believed will remain or be even more important! Need for better management of CSR: Top mangement needs to take lead, Number of companies adopting international CR principles and guidelines, challenge how to measure Nordic CSR Summit 2015, Vilnius. A. Alijosiute

Conclusions CSR is important but is seen as a brand building activity and assists in improvement of work satisfaction. Labor issues seen as the most important responsibility theme Need for better management of CSR CSR, believed will remain or be even more important! Need for better management of CSR: Top mangement needs to take lead, Number of companies adopting international CR principles and guidelines, challenge how to measure Nordic CSR Summit 2015, Vilnius. A. Alijosiute

Thank you! Questions? Audrone Alijosiute LAVA, Chair of the Board www.asociacijalava.lt taryba@asociacijalava.lt Nordic CSR Summit 2015, Vilnius. A. Alijosiute

The background of respondents 81% 80% 38% 24% The survey of companies’ corporate social responsibility, objectives, impacts, challenges and future prospects was conducted in Lithuania within a project “Comparing state of CSR in Baltics and Finland“ , financed by the Nordic Council of Ministers’ Grant Programme for Nordic-Baltic Non-Governmental Organisations’ (NGO) Cooperation 2014 Estonia. This survey is the research initiated by CSR national associations in Baltic states. It compares current state of Corporate Social Responsibility (CSR) among businesses in Estonia, Latvia, Lithuania and Finland. Finland has completed this type of the in survey 2013, 2014 already. The aim of the survey is to find out understanding and views towards social responsibility and sustainability of business leaders The research framework was built on the global social responsibility standard, ISO 26000. TNS Gallup conducted the research, and the data was collected by electronic questioner between July - September 2015 . Data selection was made by random sample of 1,000 largest and medium size companies in Lithuania. Majority of companies that participated in the survey were private limited companies, one fifth of them were industrial companies and 8 % of public limited liability companies and more than half of them are operating in Lithuania while one third indicated that operation area is Lithuania and other foreign countries. More than half of the respondents were middle sector managers. 51 companies participated in the survey.

The background of respondents The survey of companies’ corporate social responsibility, objectives, impacts, challenges and future prospects was conducted in Lithuania within a project “Comparing state of CSR in Baltics and Finland“ , financed by the Nordic Council of Ministers’ Grant Programme for Nordic-Baltic Non-Governmental Organisations’ (NGO) Cooperation 2014 Estonia. This survey is the research initiated by CSR national associations in Baltic states. It compares current state of Corporate Social Responsibility (CSR) among businesses in Estonia, Latvia, Lithuania and Finland. Finland has completed this type of the in survey 2013, 2014 already. The aim of the survey is to find out understanding and views towards social responsibility and sustainability of business leaders The research framework was built on the global social responsibility standard, ISO 26000. TNS Gallup conducted the research, and the data was collected by electronic questioner between July - September 2015 . Data selection was made by random sample of 1,000 largest and medium size companies in Lithuania. Majority of companies that participated in the survey were private limited companies, one fifth of them were industrial companies and 8 % of public limited liability companies and more than half of them are operating in Lithuania while one third indicated that operation area is Lithuania and other foreign countries. More than half of the respondents were middle sector managers. 51 companies participated in the survey.

The background of companies and respondents

ENGAGEMENT 68 % of companies consider CSR to be very important for their company at the moment.

ENGAGEMENT 72 % indicated that it is important as brand building activity and an instrument to improve work satisfaction. Only 30 % of respondents see CSR as a starting point for their business.   When developing CSR activities 32 % consider it as saving cost activity and 19 % see it as an increasing profits activity. 40 % indicated that CSR helps in creating innovations. Client satisfaction and reduction of environmental impacts are important for more than half of the respondents (58% an 57 %)

RESPONSIBLE BUSINESS PRACTICES Top drivers of CSR are trade unions, NGOs and cooperation partners. Top management was indicated as one of the least important driver.  

RESPONSIBLE BUSINESS PRACTICES Less than half of companies have set qualitative or quantitative goals for their CSR work. the executive groups and 17 % of the executive boards there is at least one person with some CSR related The top management’s knowledge and commitment to sustainability is not dominating. In 25 % of The majority of the companies apply a code of conduct and only one fourth of respondents have a CSR strategy. More than one third of companies publish corporate sustainability reports while the same percentage integrates it into other public reports of the company. know-how. Only 25 % of the companies have hired a CSR professional to plan and manage the CSR activities.

RESPONSIBLE BUSINESS PRACTICES Labour practice is dominating theme with 96 % of companies stating it is the most important issue for them. The Environmental issues (72%) and Human Right (62%) listed also as one of the main themes. Nearly two thirds of the companies ( 60%) indicated that consumer issues as well as legitimate operating practices that include, among others, anti-corruption work, responsible purchasing practices, and the payment of taxes are important.

RESPONSIBLE BUSINESS PRACTICES Accordingly to the dominating theme for most of companies most relevant measures are related to the personel issues: development of occupational health and safety and work-related stress (81%)and supporting personnel’s recreational activities(75%). Environmental measures such as waste management (72% ) and saving and efficient use of recourses (64%) are also among most popular measures among survey respondents. Nearly half (51 %) stated that community involvement is an important activity.

RESPONSIBLE BUSINESS PRACTICES While half of the respondents indicated community involvement as an important measure, prevailing cooperation form is simple – monetary donations (66%). More than half (57%) states that cooperation takes the form of multi-way dialogue (for example joint projects and political influencing, utilising the consulting, research and training support of non-profit companies). Only one fifth (19%) works with non-governmental sector strategicaly.

RESPONSIBLE BUSINESS PRACTICES Majority of the companies (47 %) are applying UN Global Compact principles . Unfortunately nearly one third (30%) of the respondents indicated that they follow non of the CSR international operational principles. There is interest in OHSAS 18001 (19%), UN Guiding Principles on Business and Human Rights (17%) and GRI –based sustainability reporting (15%) while others do not indicate interest in ensuring the responsibility of their practicies.

IMPACTS Achievement of CSR targets are monitored mainly through employee and customer satisfaction and company image. Nearly one fifth of the companies follows the costs (17%) and as many see increase in sales (21%) due to CSR activities. Furthermore nearly half (49%) of the companies believe that their CSR practices make a social impacts. Surprisingly only one third are valuing indexes, competition and ranking lists.

IMPACTS Majority of the companies (89%) indicated the biggest benefit of CSR practices - better image of the sustainability of the company. More that half already see CSR as an instrument for saving the recourses. While not the same number indicated that they measure financial impacts. One third consider CSR as a facilitator of innovations and development of new products in the company.

Challenges Measuring of impacts, CSR cimmunication and commitment of emploees are seen ass the biggest managerial challenges related to CSR.

Challenges CSR communication and brand building is the largest challenge for 37 % of the companies, while one third stated that a big challenge is labour and personel issue as well as management of environmental impacts. Communication with interest groups is seen as a challenging issues also.

Challenges Customers and State institutions were indicated as the most challenging stakeholder groups while communicating CSR values. Supply chain was important only to one fifth of the respondents.

FUTURE TRENDS Majority of respondents (71%) indicated that CSR importance will increase for their business during the next 5 years , every fifth stated that the importance of CSR will remain at the same level. Accordingly by the majority answers the investments are supposed to be increasing (66%) or remain the same (28%).

FUTURE TRENDS Quite a big number (43%) of the companies are not aware about EU legislative instruments on CSR, thought 17% stated that they will report on their social and environmental impacts in 2017 .