Corporate Social Responsibility – A Necessity

Capital, A Business Daily

Corporate Social Responsibility – A Necessity

An important concept, which has long been practiced in developed market economies and which is beginning to gradually take root in developing countries, is called Corporate Social Responsibility. In the reality of Armenia today, it seems like early days to speak of such concepts and especially to organise discussions around them. This has a grain of truth in it, for various subjective and objective reasons. However, sooner or later one has to “set the ball rolling” and this is something that cannot be expected to start on its own. An attempt to get this started was made yesterday through a conference entitled Corporate Social Responsibility: A New Role for Businesses, organised by the British Council, UNDP, Eurasia Partnership Foundation and the American Chamber of Commerce in Armenia.

The conference was run by two experts flown in from the United Kingdom – Birgit Errath from the International Business Leaders Forum and Mallen Baker from Business Respect. They tried to reveal the problems which create obstacles or could create obstacles for the development of CSR in Armenia. It turned out that many issues stand before the development of CSR today, from the shortcomings of the legal field, the current level of corruption, the existence of monopolies up to the lack of the necessary established institutions.

The British experts tried to prove that all the issues above used to hold true for a number of developing countries, but that CSR was quite successfully introduced and practiced in many of them. “Concerns that an environment unfavourable for competition could be an obstacle to CSR practices are unfounded, because many companies at the same ‘starting point’ in Latin America, India and even Africa have proven that CSR can be successfully practiced and can even give them a competitive edge in a small period of time,” noted Mallen Baker.

Essentially, corporate social investments are long-term investments and those companies which have long-term perspectives and plans in the market definitely need to focus their attention on this issue. “CSR is especially important for those companies which are more dependent on consumers, especially in our times when a simple slip-up – through the ‘reach’ of the Internet – can have disastrous effects for a company,” said Mrs. Errath. “One should note that a company like Coca-Cola accounts for 90% of its market share through its brand, which is possible only through a strong CSR programme,” she emphasised.

We asked the experts who should take the initiative in introducing CSR – companies, their unions or the government, supported by NGOs. Baker replied, “The initiators should be the companies themselves, the government should simply ensure that the necessary conditions are in place. Companies should realise the advantages with which a CSR practice would provide them. We heard opinions here that besides the high level of unemployment, Armenia also has an issue with a lack of high level expertise. This is an issue for the companies to tackle, first of all. Companies should be the ones to create the demand and should also be ready to make investments in this area.”

One should note that the companies present at the event were active in providing input to the discussion, while also demonstrating a clear lack of information. KPMG came forward with an initiative, expressing readiness to provide financial support to stakeholders who develop specific project ideas and proposals in this field.

Gevorg Sahakyan

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