The educational material about role of different institutes in creation of corporate social responsibility model of business in Russia and other countries. Modern statistics and theoretical aspects are included

1. The role of government
regulation of business in
building the concept of
Corporate Social Responsibility
By Eryomin Constantine
0/1301, World Economy
St. Petersburg State
University of Economics

2. Content
1. Corporate Social Responsibility: definition and targets
2. The role of governments in building CSR concept
3. Top-5 CSR trends in 2013
4. CSR concept in Russian Federation
o The role and understanding of CSR in Russia
o CSR spheres of activity
o Tasks and objectives of Russian companies in SCR
5. Conclusion
2

3. What is Corporate Social Responsibility?
• “CSR can be described as attempts by businesses to balance and
integrate their economic, social, and environmental responsibilities in a
way that minimizes societal harm and optimizes societal benefit while
providing wealth to business owners and shareholders”. (Kernaghan
Webb of Carleton University in Ottawa)
• “CSR is not a static concept—it is a moving, evolving target. There is no
solid definition of CSR; however, it is not a replacement for the
governmental role and responsibility in meeting challenges of
sustainable development”. (Norine Kennedy of the U.S. Council on
International Business)
3

4. Development of understanding CSR concept
4
• Creating of
multinational
corporations
• Additional
responsibility
of business for
society
Kessler, 1930
• One hundred ninety-
one UN member
states endorsed the
Millennium
Declaration
• 18 MDGs grouped
around eight goals,
most of them having
15–20 objectives
• implications for
corporate
responsibility,
environmental, and
health issues
Millennium
Development Goals
(MDGs), 2000
• Creation of more
open atmosphere to
nongovernmental
organizations
(NGOs) and business
• business
performance in
corporate
responsibility and
other areas
World Summit on
Sustainable
Development,
2000-2004

5. World Summit on Sustainable Development and
aims of CSR conception
• Sustainable patterns of consumption and production that enhance
corporate environmental and social responsibility;
• Sustainable development in a globalizing world that actively promotes
full development and effective implementation of intergovernmental
agreements, initiatives, partnerships, regulations, and continuous
improvement in corporate practices in all countries;
• Health and sustainable development, a linkage between health and
environmental protection, reduction of environmental health threats,
access to health care services, etc.;
• Strengthening of institutional frameworks that promote corporate
responsibility and accountability and exchanging of best practices.
5

6. 6
Here is the results of Burson-Marsteller social interview in USA on the question about definition of CSR

7. Burson-Marsteller organized social interview in USA. While consumers say CSR is very important for healthcare (88%),
automotive (85%) and financial service (85%) companies, these industries scored poorly on their CSR performance
(35%, 38% and 27% respectively).
7

8. Corporate Social Responsibility in the context of
regulation
8
Many companies today realize that they are responsible for the future of the
world, and they no longer accept the maxim that the business of business is
business only. Corporations are citizens of a global society and therefore
owe a duty to participate in that general society. Many governments in the
world have basic capacity for addressing the complex societal challenges.
Global problems have a health component. Often it is not possible for
individual governments to address them. So, corporations have to help
address social environmental issues that affect humankind.
—Eric Orts

9. The role of Governments in Corporate Social
Responsibility
Government
Civil SocietyPrivate Sector
9
Governmental support of private
initiatives
Meeting social needs
Effective interaction

10. CSR initiatives and law
Strengths
• command-and-control
regulatory approaches
articulate societal positions on
important issues;
• command-and-control
approaches have made
considerable progress in
improving the lives of people
around the world.
Limitations
• inconsistent and inadequate
implementation and
enforcement;
• tendency toward very
inflexible and formal
approaches that can lead to
adversarial and legalistic
behavior.
10
The new approaches should be applied as supplements to the
laws, not as replacements for them. In some cases, they may act
as precursors, and sometimes industry asks that these voluntary
initiatives become law.

11. TOP-5 CSR trends in 2013
1. Governments are back!
 governments are no longer all that happy to just take ethical business
behavior on trust alone;
 companies therefore in some ways have an interest in levelling the
playing field through regulation;
 lobbying interests through political impact
11

12. 2. Make-or-Break on Climate Change!
 Climate Change is on the agenda for business;
 While global agreements provide a long term framework for adapting to
the issue, business now is confronted with a patchwork of approaches,
systems and jurisdictions;
 Climate change importance connected with natural disasters
12
TOP-5 CSR trends in 2013

13. 3. Beware of CSR Fatigue!
 In a recent book just published authors talk about ‘The end of CSR’;
 CSR has become a mainstream;
 Companies should think about shaping CSR programs
13
TOP-5 CSR trends in 2013

14. 4. The Action is Moving South!
 In the 2013 ranking of Global 100 Most Sustainable Companies in the World,
launched in Davos this week, the number two is the Brazilian Natura
Cosmeticos, one of five Brazilian companies who made it into the top 100;
 Entire new areas of CSR, such as social innovation or social entrepreneurship
have been initiated from the Global South
14
TOP-5 CSR trends in 2013

15. 5. Watch Social Media!
 the change is not the that social media is used in the CSR context,
but that as a tool that covers huge market audience;
 the main channels of engagement and communication for business
are changing – it is about informing on a regular basis, close to
events, with responses and updates in real time
15
TOP-5 CSR trends in 2013

16. CSR concept in Russian Federation
16

17. The role and understanding of CSR in Russian
Federation
• In Russia CSR is largely new, but it could become increasingly
significant due to the global orientation of the Russian economy;
• A basic understanding of the perception of social responsibility by
companies is present especially in large Russian companies, but it
still requires development;
• Great impact of governmental structures in development of CSR
concept in Russia
17

18. 36%
30%
17%
17%
Involving in international CSR of Russian
structures (2010)
Large companies
Small and medium-sized
companies
Company associations
NGOs
18
Officially, according to information from the UNDP,
30 partners are registered in the Global Compact.
Only 4 companies participate with the corresponding
reports and information about their CSR actions.
The type and scope of their involvement cannot be assessed

19. The role and understanding of CSR in Russian
Federation
Overall, the impression is that companies depict their CSR activities
publicly in order to attract media attention without actually being able
to prove their involvement. In 2004, a social charter for Russian
business was drawn up, which was formulated by the Russian
Association of Industrialists and Companies (RSPP) and passed in
2008. It describes voluntary self-commitments whose adherence
participating companies can evince by signing the charter. Currently,
106 companies have signed.
19

20. Spheres of SCR activity in Russian Federation
1. Poverty
2.Education
3.Health
4.Political involvement
5.Participation in society
6.Environment
20

21. Poverty
BASIC INFORMATION
• Infant mortality: 10.81 deaths/1,000
births (2008 est.);
• Malnutrition: 3% (2002/04)
• Access to clean water: 97% (2004)
• Access to sanitary facilities: 87%
(2004)
• Gini Index: 41.3 (2007)
• Population below the poverty line:
15.8% (2007)
PARTICIPANTS
• Organizations for development cooperation
(GTZ, CIM etc.), chambers of commerce,
trade associations, trade unions, ministries
and political foundations;
• Non-governmental organizations;
• Government: President, Prime Minister,
Ministry of Health and Social Development
and associated federal agencies and services,
corresponding structures of the regions and
municipalities; state Duma, federal
parliaments, Russian Pension Fund,
scientific institutions, employers, unions
21
During the past five years, real wages have increased by 12% per year on
average. Income development varies sharply by region. The situation of
retirees is especially difficult; situation can only be improved with the
help of costly pension adjustments.

22. 22
Poverty levels have gone down in Russia since the late 1990s, when
over 20% of the population was below the poverty line.

23. Russia’s economic development will depend in the coming years largely on the
sufficient availability of trained employees and managers. Already now, there is a
dearth of trained employees in the economically-striving regions.
The Russian government has recognized the need for reform in the area of
vocational training and integrated it into the “national project” education.
Education
BASIC INFORMATION
• Public spending on education (share of GDP):
3,8% (2005)
• Mandatory school attendance: 6 – 15 years
• Rate of school enrollment: 91% of children
who are required to attend school (2004)
• Literacy (definition: those over the age of 15
who can read and write): Total population:
99.4%;
• HDI Education Index: Ranking 67 out of 177:
0.956 (1 = max., 0 = no education))
• Average years of education: Total population:
14 years
PARTICIPANTS
• Schools, colleges, Universities and Scientific
Centers;
• Government: President, Prime Minister, Ministry of
Health and Social Development and associated
federal agencies and services, corresponding
structures of the regions and municipalities;
• International organizations: ILO, UNDP, WHO,
UNESCO;
• “Dinastia” programs and other such foundations;
• “Otkrytoye Obrazovaniye“ (“Public education“)
foundation
• “Vladimir Potanin Foundation“ welfare fund;
• Russian Entrepreneurial Association (AG vocational
training
23

24. 24
• 88% of the adult population
have attained at least upper
secondary education and 54%
have a tertiary qualification.
Only three countries have a higher
tertiary attainment rate among
25-34 year-olds than the Russian
Federation (55%).
• Despite large increases in
national income invested in
education in recent years,
expenditure on education
represents 5.5% of GDP, a much
lower value than the OECD*
country average (6.3%).
• Only 43% of expenditure on
education is devoted to
primary, secondary and post-
secondary non-tertiary education
– the lowest proportion among
OECD and other G20 countries.
*International organization helping governments
tackle the economic, social and governance challenges
of a globalized economy.

25. Health
BASIC INFORMATION
• Public spending on health (share of GDP):
3.7% (2004)
• Medical care: 425 physicians per 100,000
residents (2000 - 2004)
• HIV/AIDS prevalence rate (>15 years of
age): 1.1 % (2001 est.)
• HIV/AIDS sufferers: 860,000 (2001 est.)
• HIV/AIDS deaths: 9,000 (2001 est.)
• Life expectancy: 65.94 years
PARTICIPANTS
• Chambers of commerce, trade associations,
trade unions, ministries and political
foundations;
• Non-governmental organizations (NGOs);
• Government: President, Prime Minister,
Ministry of Health and Social Development
and associated federal agencies and services,
corresponding structures of the regions and
municipalities;
• International organizations: ILO, UNDP,
WHO, UNESCO
25
In theory, medical treatment is free of charge; however in practice, patients must regularly make
additional payments in order to receive appropriate and timely treatment. Even if the income of medical
personnel has increased in recent years, it is still comparatively low.
According to information provided by the federal statistical bureau Rosstat, the average monthly income
of medical personnel last year was approximately 10,000 Rubles (approximately 300 EUR) with sharp
regional deviations.

26. HIV/AIDS in Eastern Europe
26
Russia in 1995 had only 1062 total
reported cases, and a mere seven
were IDUs. But the next year
alone, Russia detected more than
1500 infections, and three times
that number in 1997—60% IDUs.
A big challenge is the
demographic development, which
could be influenced positively
through preventatively-oriented
health concepts with strategies for
encouraging healthy lifestyles,
especially with respect to the
consumption of alcohol and
tobacco.

27. Political involvement
BASIC INFORMATION
• Suffrage: 18 years; universal
• Freedom of the press: 144th of
169 (2007)
PARTICIPANTS
• Unions, citizens’ initiatives, e.g. against
particular construction projects;
self-help groups, e.g. for motorists; NGOs
that focus on citizens’ rights and social
development, e.g. the institute “collective
action”, Memorial, Golos; associations of the
community self-administration organs;
journalists‘ associations; political
foundations, e.g. the Gorbatschov
Foundation; the social chamber as a state-
created institute for incorporating the
impulses of civil society into the lawmaking
process;
• Government;
• International organizations
27
The free competition of political alternatives and
the active participation of civil society in political
processes are indispensable for the design of a
stable democracy, yet thus far only slightly
developed in Russia.
Political parties hardly incorporate their
constituents into opinion-forming processes and
also play a subordinate role in political decision-
making
Companies are sooner reluctant to become
involved in CSR projects for political
participation; however they finance the
“Petersburg Dialog” as a civil social forum.

28. 28
Russia’s economic freedom score is 51.9, making its economy the 140th freest
in the 2014 Index. Its score is 0.8 point higher this year, with improvements
in four of the 10 economic freedoms, including control of government
spending, counterbalanced by declines in trade freedom, freedom from
corruption, and fiscal freedom. Russia is ranked 41st out of 43 countries in
the Europe region, and its overall score is below the world average.

29. Participation in society
• Share of women in the labor force:
65% (1994-2005)
• Ethnic groups: Russian 79.8%,
Tatar 3.8%, Ukrainian 2%,
Bashkir 1.2%, Chuvash 1.1%, other
12.1% (2010)
• Ministry of Industry, Ministry of
Small and Medium-Sized
Enterprises
• Pension Fund of Russia;
• Ministry of Health and Social
Development;
• employers, unions
29
BASIC INFORMATION PARTICIPANTS
Financial support of an institution for taking care of street children,
financial support of an institution for taking care of hearing-impaired
children is the most important spheres of social activity in Russia.

30. Pension system as one of the main social participation
direction
1. State social security
The Pension Fund of the Russian Federation pays state social security pensions to more
than 3 000 000 people.
2. Obligatory pension insurance
• old age labour pension
• disability labour pension
• survivor's labour pension
More than 40 000 000 people in Russia receive old age labour pensions.
3. Non-state (additional) pension security
During the past year the number of obligatory pension insurance clients of NSPFs
increased almost by a quarter and constituted 15,3 % from the total number of Russians
having accumulative pension portion. 118 non-state pension funds operated in the field of
the obligatory pension insurance at the end of 2010.
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31. Environment
BASIC INFORMATION
• CO2 emissions: 5.3% of total world output
(2004)
• CO2 per capita: 10.6 t (2004)
• Energy consumption: 985.2 million kWh
(2005)
• Water consumption
(households/industry/agriculture): 76.67
km3/year (19%/63%/18%) (2008)
PARTICIPANTS
• All-Russian Association for the Protection of
Nature, “Nature preserves,” Russian
regional ecological center, Russian network
of rivers, socio-ecological union.
• “Ministry for Natural Resources and the
Environment (MPRE)" with the subordinate
authorities “Federal Service for
Hydrometeorology and Environmental
Monitoring (ROSGIDROMET),” “Federal
Service for Ecological, Technological, and
Nuclear Supervision (ROSTECHNADSOR)”,
Federal Agency for Water Resources
(ROSWODRESURGY), Federal Agency for
Natural Resources (ROSNEDRA), Federal
Agency for Forests (ROSLECKHOS), Federal
Control of Nature Usage (ROSPRINADSOR)
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Officially, protection of the environment and nature are a high priority of the Russian Federation.
Article 42 of the RUS constitution specifies that every RUS citizen has a right to a clean environment as
well as trustworthy information about its condition. In the conflict between the protection of nature and
business interests, the former still remains the frequent loser.

32. Hazardous waste generation in Russia*
32
0.0
50000.0
100000.0
150000.0
200000.0
250000.0
300000.0
350000.0
Quantity(1000tonnes)
Time (year)
*on data of Eurostat Environmental Data Centre on Waste

33. 33
Persentage of total social investments of big business in Russia
52,30%
17%
12,60%
10%
staff development
resource-saving
medcine
local community development
*Rosstat

34. According to the survey among managers and common population held
by Association of Russian Managers (2010) we have following results:
34
Type of social responsibility
mentioned
Managers Common people
Quality of products 47,50% 46%
Law compliance 35% 35,50%
Discharge of taxes 29,50% 30,40%
Environmental protection 31,50% 30%
Improvement of working conditions 33,50% 22,50%
High salaries 11,50% 19,10%
Investments into manufacture 19% 14,80%
Help to poor people 2,50% 10,50%
Help for the regions in solving social
problems
10,50% 10,40%
Education support 3% 9,30%
Transperency of accountancy 13,30% 8,70%

35. Tasks and objectives of Russian companies in SCR
• Firstly, corporate social responsibility means extra responsibility that companies
undertake by making additional contributions to pension funds (Russian Railways
(RZhD), Lukoil, GAZPROM and others), participating in voluntary medical insurance
programs (as most companies now do), financing infrastructure facilities
(playgrounds and sports areas, schools, nurseries, parks, etc.) and supporting other
programs. Virtually all my friends and acquaintances working in large companies
enjoy additional benefits provided by their employers on top of their labor benefits
under effective legislation;
• Secondly, corporate social responsibility manifests itself in numerous voluntary
services existing in the country, as well as voluntary unions set up to raise the quality
of life and help the most vulnerable social groups of the population;
• Thirdly, CSR means individual responsibility or inability to pass by a person in the
street or neighbour who needs your help and support.
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36. Summary
• Companies have to take a bigger role in this process and establish creative
legal strategies, so called reflexive law, that go beyond the command-and-
control approach. Informational regulation in the form of mandatory
disclosure of information similar to the toxic release inventory could also be
used to enhance CSR.
• The idea of SCR contracts is that companies can have partnerships and
work independently with NGOs or with other governments on specific
issues. Laws could be passed to help promote this strategy, to create
progressive atmosphere.
• The criterion for determining social responsibility is the frequency of
mention of a company or a person in the media in connection with social
involvement. In 2006, the first five places were awarded to Putin, the
Russian government, the Duma, and ministries of the RF. Gazprom
appeared in 6th place, followed by other companies. There should be doubts
about whether the frequency with which social involvement is mentioned in
the media is a suitable criterion for measuring social responsibility.
36

37. References/Sources
• http://apps.who.int/gho/data/node.country.country-RUS
• http://borgenproject.org/
• www.Burson-Marsteller.com
• http://www.csr-weltweit.de/
• http://www.heritage.org/index/country/russia
• http://nauka.in.ua/en/news/articles/article_detail/5472
• http://torussia.org/government_in_russia
• http://www.pfrf.ru/ot_en/system/
• http://russia.angloinfo.com/healthcare/health-system/
• http://www.sistema.com/about-sistema/social-responsibility.aspx
• http://sustainablebusinessforum.com/
• http://www.themoscowtimes.com/
• http://unstats.un.org/
• Education at a Glance: OECD Indicators 2012. RUSSIAN FEDERATION / Under embargo until 11 September, at 11:00 am Paris time
• National Research Council. Global Environmental Health in the 21st Century: From Governmental Regulation to Corporate Social
Responsibility: Workshop Summary. Washington, DC: The National Academies Press, 2007.
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