analysing csr status in romania

8/13/2019 Analysing CSR status in Romania

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(Corporate) Social Responsibility in Romania

Situation Analysis and Current Practices Review

With Parti cular Focus on Small and Medium Sized Enterpr ises

November 2011


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(Corporate) Social Responsibility in RomaniaFinal Draft, 16 December 2011, English

2 | Situational Analysis and Current Practices Review

Authors of the report:

Cristiana Anca, CSR National Consultant within the Project

John Aston, CSR Technical Advisor within the Project

Eugenia Stanciu, Project Coordinator

Diana Rusu, Assistant Project Coordinator

Report prepared as part of the project

Strengthening the capacity of the Romanian companies to develop social partnerships-CSR

Cofinanced by the European Social Fund, Human Resources Development Operational Program 20072013

Project ID: POSDRU/64/3.3/S/41722

Bucharest, 2011

Due and customary care has been exercised in conducting this study but not all information provided byothers has been independently verified. No warranty, express or implied, is made in relation to the


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contents of the report. No liability is assumed for any loss resulting from errors, omissions ormisrepresentations made by others.

Any recommendations, opinions or findings stated in this report are based on circumstances and facts asthey existed at the time the study was performed. Any changes in such circumstances and facts uponwhich this report is based may impact the recommendations, opinions or findings contained in this report.

Reference to any specific commercial product, service, name, organization or otherwise does notnecessarily constitute or imply endorsement, recommendation or favoring by the project owners, the EUor any agency involved in the project. The authors views or opinions, as and if comprised in this study,do not necessarily state or reflect those of the agencies involved in the project.

Every effort has been made to ensure the quality of the translation is technically correct. However, wherediscrepancies between the various translated texts occur, the Romanian version is to be relied upon, as theoriginal and formal version.

Contents


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Abbreviations and acronyms........................................................................................................... 4

1. Introduction ................................................................................................................................. 6

2. Definition and usage of CSR and related terms .......................................................................... 8

3. Methodology of the paper ......................................................................................................... 11

4. CSR/SR timeline and related international initiatives .............................................................. 14

5. Overview of CSR/SR approaches in Romania ......................................................................... 19

5.1. Government ........................................................................................................................ 23

5.2. Employers and employees representatives ......................................................................... 25

5.3. Specific CSR/SR bodies and organizations ....................................................................... 275.4. Education institutions ......................................................................................................... 29

6. Responsible practices in Romanian SMEs ............................................................................... 31

6.1. Challenges and benefits ...................................................................................................... 33

6.1.1. Business links between SMEs and large organizations ............................................... 33

6.1.2. Market trends: increasing demand for standards ......................................................... 34

6.1.3. Business Case benefits............................................................................................. 37

6.2. Level and characteristics of responsible practices ............................................................. 387. Conclusions and recommendations for further study ............................................................... 43

References ..................................................................................................................................... 45

Abbreviations and acronyms


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CSR Corporate Social Responsibility

DG Directorate General

EBEN European Business Ethics Network

EBNSC European Business Network for Social Cohesion

EEAC European Environment and Sustainable Development Advisory Councils

EFTA European Fair Trade Association

EMAS Eco-Management and Audit Scheme

EU European Union

Eurosif European Social Investment Forum

GRI Global Reporting Initiative

ISO International Organization for Standardization

MNEs Multinational Enterprises

NEWS Network of European World Shops

NGOs Nongovernmental Organizations

OECD Organization for Economic Cooperation and Development

SMEs Small and Medium Sized Enterprises

SR Social Responsibility

SRI Socially Responsible Investment

SVN Social Venture Network

UEAPME European Association of Craft, Small and Medium Sized Enterprises

UN United Nations

UNICE Union of Industrial Employers Confederations of Europe


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1. Introduction

In recent years, the social responsibility of companies is increasingly becoming a mainstream issue forbusinesses, governments and society.

The rise in the implementation of responsible business practices in Romania began to be stronger after EUintegration and was mainly led by the engagement of multinational companies who transferred theirorganizational culture and practices from headquarters at a local level and, later on, also fueled by theopportunity to access EU funds. In addition, responsible industries emerged, comprising companieswhose core business objective itself is responsible. These types of companies make a business case of

activities that benefit the environment and/or the communities and their responsibility results indirectlyfrom the products and services they provide. Subsequent to EU integration, Romania witnessed adevelopment in renewable energy and waste management industries, rural or eco-tourism and the

commercialization of ecological or organic products.

While in Romania the field of CSR/SR is still at its early stages of development, many of the leading

companies in the field now understand the strategic value of a robust CSR strategy, aligned and integratedwith core business values and operations, which is translated into tangible action programs andsustainable success.

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.Depending on the communities, some of the causes, such as children welfare and education, at-risk socialgroup services and religion are much more frequently reported to other community initiatives.

Chapters 2, 4 and 5 provide details on definitions of CSR/SR and related terms used, a timeline ofCSR/SR development at national and international levels and CSR/SR approaches and initiatives in

Romania.

SME focus

Although SMEs play an important role in the economy of the country (generally, SMEs make up over 90per cent of businesses worldwide and account for between 50 and 60 per cent of employment), most data,

tools, frameworks and justifications for responsible business activity tend to cater for large companies.Small and medium-sized enterprises (SMEs) are often overlooked in discussions and policy circles,

leading to a series of assumptions such as: CSR/SR not being practiced by SMEs; SMEs not beingfamiliar with the concept of responsible business; or SMEs being organized primarily on economic

imperatives rather than societal considerations, given their resource constraints.

The focus on SMEs social responsibility is welcomed and overdue in Romania, as well as analyses of thedifferent dynamics, issues, pressures and drivers facing SMEs, their potential to implement strongresponsible businesses and the benefits that might follow.

With an aim to advance progress along these lines, the current study was conducted, as part of the projectStrengthening the capacity of the Romanian companies to develop social partnerships -CSR, co-


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financed by the European Social Fund, Human Resources Development Operational Program 20072013,Project ID: POSDRU/64/3.3/S/41722.

The main purpose of the project is to increase the degree of awareness among SMEs regarding theimportance and benefits of engaging in social responsibility and to increase their involvement in related

programs and activities, in partnership with the public sector and other partners such as companies

(multinational or Romanian) and NGOs.

Chapter 6 provides detailed information on responsible practices in Romanian SMEs, challenges and

benefits, market trends and characteristics.

Approach to research

From the point of view of research and data based on qualitative and quantitative primary information,Corporate Social Responsibility is a field in ongoing development. This situation is characteristic at both

national and international levels. The majority of public information (studies, reports etc.) comes from

private enterprises (mostly consultancies) or non-governmental organizations and, more recently, as aresult of EU funded projects on the topic.

Data available at European level represents a conglomerate of different country-based visions of CSR

mixed with a general view of the EU Commission. This is relevant as a starting point in developing acountry specific CSR approach.

In the framework of this research, the understanding and application of CSR/SR in Romania with

particular focus on SMEs has been investigated in 8 biggest cities in Romania in selected keyorganizations from all areas of society: public authorities, multinational companies, Romanian companies,

SMEs, NGOs, federations and unions, professional associations and networks.

The research focuses on the compilation of two methodologies. In addition to quantitative secondaryinformation gathered from a diverse range of sources through a thorough desk research, a qualitativeanalysis was conducted with the purpose of bringing forward the how in organizations experiences.

Chapter 3 provides detailed information on the methodology of the study, approaches and methods used,validity and reliability.


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2. Definition and usage of CSR and related terms

Business is not divorced from the rest of society. The two are interdependent and it must be ensured,through mutual understanding and responsible behavior, that businesss role in building a better future is

recognized and encouraged by society.

As an engine for social progress, CSR helps companies live up to their responsibilities as global citizensand local neighbors in a fast-changing world.

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 thecommunity and society at large.

World Business Council for Sustainable Development

Most definitions of Corporate Social Responsibilitydescribe it as a concept whereby companiesintegrate social and environmental concerns in their business operations and in their interaction withtheir stakeholders on a voluntary basis. Being socially responsible means not only fulfilling legal

expectations, but also going beyond compliance and investing more into human capital, theenvironment and the relations with stakeholders. The experience with investment in environmentallyresponsible technologies and business practice suggests that going beyond legal compliance cancontribute to a companys competitiveness. Going beyond basic legal obligations in the social area, e.g.training, working conditions, management-employee relations, can also have a direct impact on

productivity. It opens a way of managing change and of reconciling social development with improved

competitiveness.

European Union1, Green paper - Promoting a European framework for CSR

Attention to social responsibility has until recently focused primarily on business as a way to ensure the

link between business operations and communities were they are based. The view that socialresponsibility is applicable to all organizations emerged as other actors of society, not just companies,

recognized that they too had responsibilities for contributing to the betterment of society.

For this reason, the term corporate social responsibility (CSR) is more familiar and applied than social

responsibility (SR).

More appropriate for the purpose of this study, taking into consideration the target audience, the termSocial Responsibility (SR) will be used from this point forward in relation to SMEs, as defined in the

ISO 26000 international standard.

1COM/2001/0366 final


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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; and is integrated throughout the organization and practiced in its relationships.

Activities include products, services and processes.Relationships refer to an organization's activities within its sphere of influence.

ISO 26000: 2010

When analyzing the understanding and application of CSR within a particular country across diversetypes of organizations in different areas of operation, it becomes evident that they might vary from a

narrow focus only on ad hoc philanthropic acts, to a broader and long term approach that takes intoaccount the overall sustainable development of society.

We define social responsibility in a broad sense. We operate and we think based on the overallprinciples for sustainable development which basically include everything the company does toensure long term development of both the business and society. At a global level, we operate based

on 10 main sustainable development priorities, only one of which refers to community developmentand community involvement. These latter two are what is most often referred to as CSR in

Romania. But even in Romania we operate based on the 10 broad principles of sustainabledevelopment, not only CSR. (Diana Klusch, Ursus Breweries)

The social responsibility component of our company is part of our overall development strategy. We

see CSR as a modern way of doing business and of promoting cohesion and understanding betweenmanagement and employees, between management and the community. It is also a way of increasing

company value in time by helping those that help us. (Elisabeta Ghidiu, Transgaz)

The understanding and application of CSR by each organization in Romania is influenced by manyfactors 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.

As such, there are a number of other related termsused to describe in part or full the CSR/SR activity of

an organization, some of which are equated to CSR/SR in habitual language use. Some examples of otherterms include:

Corporate Responsibility, often equated to CSR Corporate Sustainability, often referring to a long term strategic CSR/SR activity which takes

into account stakeholder expectations and is aimed at contributing to the triple bottom line Corporate Governance, focusing on business management Corporate Citizenshipor Community Involvement, often describing an organization as being an

active citizen of the community in which it operates, participating actively in its development,and therefore focusing more on the external dimension of CSR/SR

Responsible Entrepreneurship, a concept put forward by the United Nations which recognizesbusinesses role towards achieving sustainable development, stating that companies can managetheir operations in such a way as to enhance economic growth and increase competitiveness whilevoluntarily ensuring environmental protection and promoting social responsibility; (CSR


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Glossary, 2005) the concept was mainly chosen as a means to communicate with and activateSMEs, as CSR was considered to be a complex term mainly developed for large enterprises

(European Communities, 2003).

CSR is a company initiative to get involved in the community, but I would not refer only to

companies when talking about social responsibility. Individuals or NGOs can also contribute to

improving a community and that is also an act of social responsibility. We define CSR as an act ofcontributing with own resources (financial, products, know-how etc.) to address a community need.

We see Social Responsibility as something that starts at an individual level and is also applied byorganizations, enterprises, local authorities. There are people focusing only on profits, unaware and

unconcerned about the needs of others around them, but there are also people that take a lookaround them and realize that they are making a profit with the help of those around. In the end, thisis the responsibility of a company to take care of those who invest in it, who buy its products or

who use it services. This is true for us as well, even though we are an NGO. We also need to operateethically, with professionalism and transparency, with concern towards our employees, beyond legal

requirements. We need to show concern towards the projects we implement, to correspond to realneeds in the community and to be responsible with the money we attract and spend. (Diana Paius,

Bethany Foundation)

For us, CSR is like a base-word that has different meanings to different people. This is why we usethe term community involvement instead of CSR. At a moral level, a company should be aligned

with what is happening in the community in which it operates. It should be aware that the situation isdifferent in Romania as opposed to Bangladesh or any other place in the world. The involvement in

community means that with the resources it owns, a company takes a step forward to contribute todevelopment, regardless if it addresses one or two beneficiaries, or the entire community. Butoverall, a company is responsible if this step forward towards community involvement is not a

compensation for damage done elsewhere, for example because of polluting. (Simona Serban, ClujCommunity Foundation)

The definition of SR for SMEs used in this study is based on ISO26000 and UN interpretations:

Responsible Entrepreneurship, In compliance with law and applicable international norms, Which seeks to increase positive contribution for all relevant stakeholders while minimizing

negative impact,

Through voluntary initiatives going beyond legislative and contractual requirements, Which are proactive and take place regularly, rather than on an ad-hoc basis.


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3. Methodology of the paper

In the framework of this research project the understanding and application of CSR/SR in Romania, withparticular focus on SMEs, has been investigated in 8 biggest cities in Romania in selected key

organizations from all areas of society: public authorities, multinational companies, Romanian companies,SMEs, NGOs, federations and unions, professional associations and networks. See Appendix 1 for a listof participating organizations and the Interview Guide.

The selection of organizations to be analyzed was conducted in a way to ensure geographic spread and across section of opinions from diverse backgrounds and experiences.

The analysis aims to bring forward a comprehensive picture of current situation of CSR/SR in Romania.It is hoped that a good balance between different actors and regions was achieved.

Approach to research

People construct the meaning and significance of their realities2. They tend to explain and categorize

events, filtering everything through their own personal framework of beliefs and values. There is nouniversal truth out there, ready to be studied. Reality is subjective and there are multiple points of viewon the same subject that can be understood by exploring the perceptions of all participating actors.

The author is aware that the personal interpretation and filtering of facts of the respondents, on theirexperience and knowledge related to CSR/SR, influenced the results of the study.

The author is also aware of the fact that her background, opinions and beliefs influenced the results of thestudy. Reality is not something objective, independent of the researcher, but rather, it is her role to capturethe meanings people place on their actions and decisions, in their own terms, and interpret these behaviors

rather than explain.

Research methodology

The research focuses on the compilation of two methodologies. First, quantitative secondary information

already available to the public was gathered from a diverse range of sources (European studies,international and national reports, CSR/SR national networks, organizations websites and CSR/SRreports, news sites and other online media sources). The investigation took place by conducting athorough desk research.

Second, in line with the aim of the study, this data was complemented by a qualitative analysis with thepurpose of bringing forward the understanding and meaning that respondents place on specific factors andprocesses that shape their CSR /SR activity, and ultimately to connect these meanings to the social worldaround them. The fact that the answers expected to be obtained are related to the how in organizations

experiences, more precisely how activities and decisions and made, recorded, learned from and givenmeaning, is more of an argument for choosing to also pursue a qualitative approach.

2Walker (1985)


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The choice proves all the more suitable as CSR/SR is a relatively new and little explored area of research,particularly in Romania, and, hence, rich and holistic descriptions of practices are sought, which can offer

a possibility of understanding latent, non-obvious issues the researcher was not aware of at the beginningof the study.

The main goal is to understand how organizations understand the topic of CSR/SR, how they apply and

make sense of their experiences. It is hoped that new insights will emerge on the engagement of SMEs insocial responsibility. The research aim thus provides the basis for an exploratory research.

Information was gathered during SeptemberOctober 2011 at national level.

Qualitative research method

In addition to the desk research, the study examined in detail the understanding and practices of ......organizations with prior and diverse experience running or collaborating on CSR/SR activities and

projects for more than a year, preferably two.

The organizations were selected following the desk research, from the personal network of the researcher

and from recommendations. The issue of representativeness is not a concern, as this paper i s adiscovery-oriented approach aiming to develop new insights, which can inform future confirmatory

research.

Social programs or community programs of NGOs or other local groups, though highly regarded, if notpart of a CSR/SR program or partnership, did not make the purpose of this study.

To the extent possible, we sought to involve organizations which designed their own activities andprojects.

A case study approach based on in-depth semi-structured interviews and observations was used.Respondents were either the managers of the organizations or CSR/SR coordinators and were consideredwell informed to participate and provide useful data.

The purpose of the interviews was to obtain information on the understanding and experience on CSR/SRand influencing factors, and how that might impact the level of engagement in CSR/SR, the strategies

and approaches, as well as best practice and the inherent learning outcomes that might accrue fromsuccesses and failures.

Data analysis

As a first step, an analysis of CSR/SR approaches was performed following the desk research. Maincategories and themes were identified, based on different actors of society and their roles in the field.Issues related to social responsibility in SMEs were also sought.

Within-case analysis was performed for the interviews in order to obtain a better understanding of the

hows, whats, where, and whys of various CSR/SR approaches. These are presented in highlightedboxes throughout Chapter 6.


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Following the analysis of the transcripts, predominant concepts and themes were revealed, grouped intocategories and organized into topics. This facilitated the identification of recurring topics throughout all

of the interviews, which lessened the analysis of each case.

Case studies and examples used throughout the paper were described in detail with relevant quotations to

reveal the respondents actual words and allow the reader to perceive the thoughts and the context of the

respondent and to immerse into the situation. The interpretation of data is based on the transcript, withreference to identified literature.

All the findings were compared and contrasted with the help of tools recommended by Miles andHuberman (1994).

Validity and reliability

Although this study presents a high validity regarding the interpretation of the findings, it comes with a

significant disadvantage: a lack of standardization and researcher bias, which have an impact on the

perception on reliability3

.

The validity of the findings is supported by the use of multiple sources of evidence to look at the samephenomenon. In some case studies information concerning the organizations experience on SCR/SR was

also obtained from independent websites, networks and third party reports. In some cases, information onthe same CSR/SR program was collected from more than one party involved. In two of the case studies,the participating organizations provided the researcher with supporting documentation to confirm the

statements made during the interview. Answers concerning the engagement of SMEs in socialresponsibility activities were sought from all participating organizations, based on their experience, direct

or indirect involvement in CSR/SR initiatives/projects.

Reliability issues were sought to be addressed by making the process as transparent as possible,

describing each step of the research.

3Noke (2006)


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4. CSR/SR timeline and related international initiatives

Since the upcoming of the CSR/SR debate a range of supra-national actors has started to engage in thisarea by either providing framework structures (e.g. definitions or strategies) or (direct) support to

enterprises and/or organizations intending to introduce socially responsible activities.

A brief overview on some of the relevant actors at European and international level is given below, aswell as some of their initiatives, with a particular focus on initiatives relevant for SMEs.

1976 The OECD adopted Guidelines for Multinational Enterprises which provide

voluntary principles and standards for responsible business conduct in a variety ofareas including employment and industrial relations, human rights, environment,information, disclosure, combating bribery, consumer interests, science and

technology, competition and taxation.

Latest update to the Guidelines was adopted in 2011.

1977 International Labor Organization adopted the Tripartite Declaration of Principles

concerning Multinational Enterprises and Social Policy (MNE Declaration).The principles laid down in this universal instrument offer guidelines to MNEs,governments, and employers and workers organizations in such areas as

employment, training, conditions of work and life, and industrial relations.

1993 The origins of the EU's approach to CSR/SR stem from the Commission's WhitePaper in 1993 ongrowth and employment.

1993 The European Environment and Sustainable Development Advisory Councils

(EEAC) are a unique collaboration between the advisory councils for environmentalpolicy and sustainable development. It was set up by European governments with thepurpose of providing independent, scientifically based consultancy regarding theenvironmental and sustainable development.

Today, over 26 councils from 16 European countries are members of the network.

1995 The establishment of the World Business Council, an international business networkset up with the aim to develop closer co-operation between businesses, governmentand other organizations concerned with the environment and sustainabledevelopment.


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1995

1996

In the following years, the concept of Corporate Social Responsibility (CSR) hasgained in importance in the EU policy debate, manifested, for example, by the

establishment of ajoint declaration against social exclusion (1995) or the launch ofthe European Business Network for Social Cohesion(EBNSC) in 1996 (to becomeCSR Europe in 2000).

CSR Europe is a business network today consisting of more than 70 leadingmultinational corporations as direct members and of further 3,000 companies through

31 National Partner Organizations. It aims to help companies achieve profitability,sustainable growth and human progress by placing corporate social responsibility in

the mainstream of business practice.

1997 The OECD Anti-Bribery Convention is launched which establishes legally bindingstandards to criminalize bribery of foreign public officials in international businesstransactions, providing related measures that make this effective. It is the first andonly international tool aimed at the supply side of the bribery transaction.

2000 In March 2000, the Presidency Conclusions of the European Council made for thefirst time a special appeal to companies corporate sense of social responsibility.

2000 In June, the United Nations launched the initiative Global Compact, a Code of

Conduct including ten principles in the areas of human rights, labor, the environmentand anti-corruption as well as a voluntary international corporate citizenship network.

2001 The European Commission published a Green Paper on Promoting a EuropeanFramework for Corporate Social Responsibility on the basis of which a

Communication was proposed in 2002, focusing on increasing knowledge about thepositive impact of CSR/SR on business and societies in Europe and abroad, in

particular in developing countries and on the development of the exchange ofexperience and Good Practice on CSR/SR between enterprises.

2001 Launch of thefirst sustainable development strategybased on the idea that in the longrun economic growth, social inclusion and environmental protection go hand in hand.

2001 Regulation of the European Parliament and of the Council of 19 March 2001

allowing voluntary participation by organizations in a Community eco-managementand audit scheme (EMAS). Over 4500 participating organizations to date, out ofwhich 23% are micro, 33% small, 25% medium and 19% large.


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2002 The establishment of a Multi-Stakeholder Forum, chaired by the EuropeanCommission and consisting of organizations of employers, business networks, trade

unions and civil society representatives, aimed to support CSR/SRpractices, promoteinnovation, convergence, transparency and tools through improving knowledge andexploring possibilities for establishing common guiding principles at EU level.

2003 European Council Resolution of 6 February 2003 on Corporate Social Responsibility(2003/C 39/02)

2004 - 2005 A specialfocus on CSR among SMEsis set by the Directorate General Enterprise andIndustry with the implementation of a Pan-European Awareness Raising Campaign

on CSR for SMEsincluding a wide range of events throughout Europe as well as theestablishment of an informative website. Project was in cooperation with

EUROCHAMBRES (European Association of Chambers of Commerce) and

UEAPME(European Association of Craft, Small and Medium-sized Enterprise).

2005 DG Enterprise realized the Responsible Entrepreneurship project which identifiedcase studies from SMEs across Europe as well as the Mainstreaming CSR among

SMEs launched in September.

2005 Integrated Guidelines for Growth and jobs (20052008)Communication from theEuropean Council aligned with the re-launch of the Lisbon treaty and with a focus on

growth and employment in Europe.

European Council recommended to member states to encourage enterprises towardsengaging in social responsibility.

2006 TheEU Strategy for Sustainable Development takes into account the situation of an

enlarged EU and pinpoints the importance of creating sustainable communities ableto efficiently manage and use resources and to tap the ecological and social

innovation potential of the economy, ensuring prosperity, environmental protectionand social cohesion to improve present and future quality of life.

2006 Due to the variety of international activities in the field of CSR/SR, also the EuropeanCommission aims to stronger consider the international perspective in their work to

promote CSR/SR globally, in the context of international benchmarking and with aview to maximizing the contribution of enterprises to the achievement of the UNMillennium Development Goals (European Commission, COM 2006 136 final).


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It is important to note that the above is not an exhaustive enumeration of initiatives to date. As such, otherimportant initiatives in the field of CSR/SR refer to different international certificates like the ISO 14000

and 9000 series (for environmental and quality management systems); international fair trade orenvironmental initiatives such as the Fairtrade Labeling Organizations International; the Global ReportingInitiative (GRI) which is a multi-stakeholder process and independent institution whose mission is todevelop and disseminate globally applicable Sustainability Reporting Guidelines; tools such as the

Europe 2020 strategy or the Universal Declaration of Human Rights.

Also, various other networks were set up in Europe. Such are the European Business Ethics Network(EBEN), Social Venture Network (SVN) Europe or the European Social Investment Forum (Eurosif), all

with the purpose of promoting business ethics, and social and environmental engagement.

Case box 1: CSR/SR approaches in Europe

The focus and objectives of European-wide initiatives are different. First of all, there exists a rich portfolio of

initiatives targeting at raising awarenesson CSR/SR. As an example, the European Business Campaign on

Corporate Social Responsibility was launched in November 2000 by a group of international business

organizations led by CSR Europe. The campaign aimed to make the benefits of CSR/SR visible to the wider

business world and, therefore, organized events and projects.

Additionally, the campaign has launched a range of concrete toolsand activities to spread CSR/SR to a wider

audience. For example, the SME Key, a step-by-step guide to help SMEs to evaluate their current socially

responsible practices and integrate them into their core activities and strategies, or the SRI Compass, an

online toolkit that provides stakeholders with an overview on the socially responsible investment (SRI) market

and guides to green and ethical funds in Europe.

To recognize excellence in the promotion of entrepreneurship in European regions the European Commission

has, for example, launched the European Enterprise Awards in 2006. The award categories include a

Responsible Entrepreneurship Award for initiatives that promote Corporate Social Responsibility and

sustainable business practices in the social and/or environmental domain. Another kind of awarding is the

listing of the 100 best workplaces in Europe which is done by Great Place to Work Institute Europe.

From a more intermediary viewpoint the CAESAR project (CSR RELAYS in Chambers of Commerce) of

the EUROCHAMBRES may be mentioned, focusing on supporting employers representatives in their work

on disseminating CSR/SR among European enterprises. In the framework of this project (being financially

supported by the Mainstreaming CSR among SMEs program of the DG Enterprise and Industry)

EUROCHAMBRES have organized a training program for 50 representatives from chambers of commerce

and industry across Europe. This training is followed by company visits of the trained advisers as well as the

development of practical guidelines and a website to make it available to other chambers.

Another project in the framework of this program is conducted by the UEAPME. The project Responsible

Entrepreneurship in SMEs aims to develop tools and activities to support intermediary business

organizations at assisting their member SMEs in the improvement of competitiveness through actions of

responsible entrepreneurship.

A variety of CSR/SR management tools were developed to support the implementation of CSR/SR in the

enterprises. For example, Codes of Conduct have been signed by the social partners at European level in the

textile, clothing, woodworking, footwear, commerce and private security sectors with a specific focus to

promote organizations environmentally friendly behavior.

Different fair trade initiatives and labels have been developed at European level (e.g. by the European Fair

Trade Association (EFTA) or the Network of European World Shops (NEWS).

Source: KMU Forschung Austria (2007)


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5. Overview of CSR/SR approaches in Romania

A multitude of different actors is engaged in the field of CSR/SR in Romania. This is due to the fact thatit covers a diverse area of activities leading to a shared responsibility of the government, the private sector

and society.

A schematic summary of key actors and their strategies presented in the next sections can be found

below:

Figure 1Key actors and strategies in the field of CSR/SR

Source: Austrian Intitute for SME Research

In Romania the concept of corporate social responsibility 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, by major reforms whichinfluenced the involvement of large and small companies in CSR/SR activities in terms of restructuring

their technologies for environmentally friendly production or the adoption of social measures foremployees or the society. Due to increasing extensive legislation in this area, there is constantcompetition concerning technologies used that must ensure the protection of the environment and ofemployees and promote sustainable development.

The private sectors implementation of responsible practices began to be stronger after EU integration andwas mainly led by the engagement of multinational companies who transferred their organizationalculture and practices from headquarters at a local level and, later on, also fueled by the opportunity to

access EU funds.

In addition to best practice and knowledge transfer in the country, another type of responsible company(and also responsible industries at a national level) emerged subsequent to EU integration the

company whose core business objective itself is responsible. These types of companies are making abusiness case of activities that benefit the environment and/or the communities and their responsibilityresults indirectly from the products and services they provide. Most relevant examples in Romania referto the renewable energy and waste management industries, rural or eco-tourism and thecommercialization of ecological or organic products. For the purpose of the paper, we will continue to


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focus on the integration of responsible practices within core organizational policies and practices,regardless of business objective.

Responsible corporate behavior was first evaluated in Romania based on commercial and corporate imageand reputation considerations, rather than a stakeholders interest and sustainability approach. Recent

years have seen an increase in the implementation of the latter approach and responsible practices are

increasingly being associated with long term company success, directly connected to communitydevelopment, environmental performance and supply chain relations and practices.

As in any other country, there are different levels of awareness and practical implementation of CSR/SRinto business reality.

In Romania, the field of CSR/SR is still at its early stages of development. While MNEs and largeRomanian organizations have gradually developed a culture of responsible conduct, in many casesCSR/SR is still associated with philanthropy and focused on donations, sponsorships and public relations.

The CSR/SR instrumentsmost frequently considered are: corporate codes of conduct, social investments,audit and social and ecological reporting.4Only few companies adopted a strategic approach, integrating

CSR/SR into core business practices, informing company decisions and activities. The concept itself

seems not too well known by SMEs, although the respective practices appear to be well implemented andnumerous.

Making CSR/SR part of the way business is done makes it resilient to market changes and economicdifficulties and ensures constant responsible business behavior. As long as CSR/SR is adjacent to

business, a separate function or activity (i.e. philanthropy) it is subject to external and internal constraintsand pressures.

Following the economic crisis, many actors in the field of CSR have disappeared. Multinationals arewhat is visible at the moment. [] In 2008, community involvement was becoming a bon ton activity

many of the companies reaching a particular stage in their development were doing it. Once the

economic crisis hit, they disappeared from the stage. Secondly, the companies that remained active in

the responsibility game reduced their community investment budgets with over 60 -70%. Yet anothervisible trend for those that continued to engage in responsible practices and programs was a greatersynergy with core business objective.

(D. Dehelean, ResponsabilitateSociala.ro)

Areas most frequently covered by CSR/SR initiatives are children welfare, education, art, religion,

environment and sport. CSR/SR initiatives do not stop only at community investment, but address supplychain responsibility, customer services and satisfaction, employee welfare as well. Depending on thecommunities, some of the causes, such as children welfare and education, at-risk social group servicesand religion are much more frequently reported to other community initiatives.5

An exploratory research conducted in 2006 on 205 Romanian companies, large organizations and SMEs,

revealed that external pressure (NGOs, media, government), increased reputation and popularity of thetopic are the main motivations to implement CSR/SR into the organization.

6

4Iamandi (2011)5L. Dittel, M. Bilova and K. Simkova (2007)6A. Stancu and V. Olteanu (2008)


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Table 1 - Sample description of research participantsNo of employees Percentage Turnover (EUR) Percentage

Below 9 20,59% Below 50 000 16,83%

10-49 24,51% 50 001500 000 26,24%

50-249 21,08% 500 0015 mil 18,81%

249-1000 20,10% 5 mil10 mil 7,92%

Above 1000 13,73% Above 10 mil 30,20%Total Total 100,00%

Source: A. Stancu and V. Olteanu (2008)

Figure 2Motivations for CSR/SR implementation

Source: A. Stancu and V. Olteanu (2008)

In Romania, until 2008, a strong motivator to do CSR was the possibility to earn customer trust.

Many of the companies focused on brand and consumption. Consequently, CSR was seen as anadded value meant to increase brand value. After this, when things dramatically deteriorated withregards to consumption, a price war began. [] The exceptions to this were the banking and

energy industries, because during 2009 these were under strong public pressure. Current[multinationals] are influenced by headquarter pressure on Romanian branches and by changes

taking place at European level. (Interviewee)

Stancu and Olteanu (2008) also revealed that in most cases the general manager is also responsible formanaging CSR/SR activities, followed by the marketing and PR departments. Further, it outlined thatonly 2% of companies seemed to have a specific department and that in approximately 28% of casesCSR/SR related responsibilities are not included in the job description of any employee. 7

7A. Stancu and V. Olteanu (2008)


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Central, local and regional public authorities are often insufficiently involved in promoting the concept ofCSR/SR for the benefit of communities and in creating a supportive framework and favorable conditions

to encourage organizations to engage in responsible practices. Public authorities efforts in CSR/SRcampaigns are still not strong. Despite this, in the context of globalization, Romanian organizations arestill recommended and need to adopt a responsible conduct to be able to compete in the market.

A National Strategy for the Promotion of CSR was launched in 2011, highlighting priorities, objectivesand main directions for implementation.

Table 2 - SWOT Analysis regarding CSR/SR development in Romania

Strengths Weaknesses

Interest of society towards CSR/SR and the relativenovelty of the concept in the public sphere

Involvement of multinationals and some of thelarge Romanian companies in CSR/SR

Continuous increase in the number of CSR/SRinitiatives and best practice in the field at a national

level

Increasing consumer interest for products/servicesof socially responsible companies

Insufficient knowledge on the concept of CSR/SR atsociety level

Absence of extensive studies, research andsociological evaluations on the degree of

understanding and application of CSR/SR in Romania

Weak understanding and involvement of organizationsand SMEs in CSR/SR initiatives

Weak application of socially responsible investmentsand acquisitions

Superficial organizational involvement in CSR/SRactivities; causes of social problems are not addressed

Reduced levels of understanding and insufficientapplication of consumer rights

Corruption has direct effects on business environmentand its capacity to apply CSR/SR practices

Insufficient capacity of organizations/stakeholders torepresent themselves and express their own interests

Insufficient development of business culture based onmoral values

Opportunities Threats

Benefits for companies, communities, society,environment etc. of a strategic approach to doing

business, that incorporates CSR/SR

Importance attached to CSR/SR at a European andinternational levels

Development opportunities and competitiveadvantages for Romanian SMEs on European/

international markets

Opportunities for learning and adapting bestpractices and lessons learned from the experiences

of more developed countries

Increase in the importance of reputation ofcompanies and of the environmental policies in

consumer choices

Financing opportunities for initiatives withCSR/SR components offered by the EU

Positive public attitude concerning the involvementof companies in the community/ society

More protected environment and diminishednegative impacts of human activity

Absence of coherent public policies to promoteCSR/SR

Absence of a coherent and consistent legislativeenvironment

Deficiencies in applying legislation

Delays concerning acceptable standards in areasadjacent to CSR/SR (i.e. environment) compared to

other EU member states

The risk of exclusion/ blocking of access of Romaniancompanies on various markets

Insufficient support and involvement of publicauthorities in promoting and applying CSR/SR

Lack of budgetary funds to promote the application ofCSR/SR

Source: National Strategy to Promote Social Responsibility 2011 2016


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Although significant progress has been made since EU accession in integrating responsible practiceswithin 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 theimplementation of responsible practices;

raising awareness on the need and benefits of strategically incorporating responsible practiceswithin business objectives and operations to ensure sustainable success;

increasing the transparency, monitoring and evaluation of the impact of CSR/SR initiatives on allstakeholders involved/impacted;

In the following sections, a systematic overview is provided on the most important categories of different

actors as well as their CSR/SR initiatives and their approaches to encourage development in the field.

The overview represents a set of illustrative examples rather than a comprehensive list of all involved

entities or all initiatives implemented.

5.1. Government

The Government is responsible for creating an environment that encourages the application of the conceptof CSR/SR, as the Government is a significant factor influencing economic development and the

sustainable development of communities and society. Since joining the EU, Romania began the process ofharmonization of law and regulations, which is still ongoing. Significant improvements in legislation

were made with regards to environment, health and safety of employees, skills development, socialinclusion and anticorruption.

Legislati ve environment. Among others, the following are related to the field of CSR/SR:

In Romania, environmental legislation is more extensive since negotiations for EU integrationhave started. Main legislation refers to climate change, pollution control, air quality, noise

prevention, waste management, soil, dangerous substances, nature protection (biodiversity and

genetically modified organisms), water management, forests. (See References section for furtherinformation.) Incentives are given to stimulate environmental protection to companies investingin renewable energy sources to support the creation of green jobs or to people who set up

alternative energy sources (i.e. solar panels, heat pumps) for their homes to replace traditionalenergy sources (Green House Program)8;

Extensive legislation has also been increasingly implemented following EU integration to ensure

the health and safety of employees in the workplace, as well as their professional development,reduce discrimination and promote equal opportunities. The Romanian Labor Code is the most

relevant document regulating the relationship employer - employee.

Access to employment and social inclusion of people with disabilities:- Law 57 of 1992, updated, stating that any employer with over 50 employees must ensure that

specific percentage comprises people with disabilities. Tax deductions and financial benefits

8: http://www.mmediu.ro/casa_verde.htm


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are granted for employing people with disabilities and adapting the working environment totheir needs.

On volunteering:- Law on volunteering no 195 of 2001, updated, regulates the promotion and facilitation of

engagement of citizens in volunteering activities organized by public or private entities;

- Government decision 1317 of 27 October 2005 supporting volunteering activities in the fieldof home care for the elderly;

- Oder 439 of 21 May 2002 on approval of environmental volunteering activities.

On civil protection:- Law 481 of 8 November 2004;- Decision no 1579 of 8 December 2005 referring to voluntary personnel for voluntary

emergency services;

- Order 160 of 23 February 2007 regulating the planning, organizations, implementation ofactivities to prevent emergency situations by voluntary and private emergency services;

- Decision 160 of 14 February 2007 on conditions and usage of uniforms, equipment andspecific signaling of emergency personnel for emergency services, private or voluntary;

- Order 718 of June 2005 on organization chart and facilities of emergency voluntary services. On transparency and anticorruption:

- Law no 544 of 2001 on free access to public information refers to the ways in which citizenscan demand from public institutions and authorities information of public interest;

- Law no 52 of 2003 on transparency of decision making in public administrations givescitizens the possibility to make suggestions and actively participate in decisions.

On associations and foundations: Law 246 of 18 July 2005 for the approval of Government Order26 of 2000

Financial incentives. In Romania, both companies and citizens benefit from tax deductions forsponsorships made in specific conditions. According to Law 32 of 19 May 1994, updated (Law on

Sponsorships), companies can redirect up 0.3% from turnover of their annual taxes for sponsorships andcommunity investments, but not more than 20% from the profit tax. Physical persons can also redirect 2%of their annual taxes towards social causes, in accordance with Government Order 26/2000 concerningassociations and foundations, as detailed in the Fiscal Code 84(2), modified by Government Order138/2004.

Awareness raising. It wasnt until recently (2011), with the issuance of the National CSR Strategy, thatthe government recognized the importance of raising awareness and supporting the development of theCSR/SR field in Romania, by identifying gaps and setting objectives aligned with EU strategy.

Nevertheless, since EU accession and with EU funding support, awareness raising initiatives, research

studies, seminars, conferences and websites have been initiated and developed by government institutionsand authorities in one or more of the specific topics addressed under the CSR/SR umbrella. Examples

comprise initiatives to prevent or reduce pollution, promote equal opportunities for men and women andnon-discrimination in the work place, promote road safety, promote the social inclusion of people withdisabilities, reduce bribes and corruption in public institutions and authorities.

Initiatives in areas of concern and related to CSR/SR are still few by numbers and government institutionsand authorities tend to be more of a secondary partner in projects and campaigns, rather than the main

initiator.


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Specific initiatives to promote responsible business and the integration of CSR/SR practices in businessstrategy and operations are still needed. Among these, we identified:

a need to reinforce business transparency

a need to encourage responsible investments

a need for public infrastructure for the implementation of the CSR National Strategy and for

cooperative approaches across ministries a need to reinforce organizations to publish/ report on their social performance and involvement

(i.e. employees, communities), similar to environmental reporting enforcement

a need to develop a best practice national data base

a need for public grants for CSR/SR activities and projects, especially for SMEs

5.2. Employers and employees representatives

The role of employers and employees representatives in advancing the implementation of responsible

business practices is an important one. By their very nature, these types of organizations are in theforefront of engaging companies, enterprises, unions and other actors through both aggregate approaches(such as the Romanian Chamber of Commerce) and individually tailored approaches for specificindustries (such as the Romanian Federation of Cement Unions).

As part of the present research, several initiatives advanced by employers and employees representativesin the field of CSR/SR have been identified. While the majority of these seemed to focus on a particular

component of the CSR/SR spectrum, such as employees health and safety, employee skills developmentor environmental efficiencies, few have also been identified as focusing on promoting and encouragingthe integration of CSR/SR into business operations.

The Romanian Chamber of Commerce is one key actor implementing such initiatives, promoting theoverall concept of CSR/SR and activity related initiatives, both at a national level, as well as at locallevels, through its regional offices. Most projects identified have been implemented with EU funds. Aselection is presented in Table 3.

Table 3 - Romanian Chamber of Commerce and Industry (CCI) initiatives on CSR/SR

National initiatives addressing the concept of CSR/SR

Promoting CSR in SMEs

Implemented during 20062008, the project aimed to develop and promote research in the field of CSR

in order to improve the knowledge base of SMEs for developing initiatives in the field of CSR

Assistance bureaus for the promotion of social responsibil it y of enterpr ises

Implemented during 20092011, the project aimed to develop the required capacity in regional offices of

the CCI at a county level (42) to enable them to form a national network of assistance offices with the

purpose of promoting the social responsibility of enterprises in Romania. The project was addressed to the

business environment, the civil society and other relevant actors.


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National initiatives addressing a component of CSR/SR

Women on board

Implemented during 2006 2008, the project aimed to increase the level of participation of women in

economic activities.

Br eak gender stereotypes, give talent a chance

Implemented during 2007 2008, the initiative was launched by the European Commission and

implemented in Romania by CCI Romania. It came in support of private companies, especially SMEs, to

raise awareness on the benefits of eliminating gender stereotypes in the labor market, to improve

competitiveness.

Regional initiatives addressing the concept of CSR

During 20092011, CCI Bucharest, as the beneficiary, implemented the initiative PRO.CON Promoting

the concept of social r esponsibil ity of enterpri ses,a project aimed at training personnel in professional

associations and chambers of commerce to promote the concept of social responsibility within the

Romanian business environment and the wider society.

During 2010, CCI Constanta implemented the project Bussole CSR, a platform and instrument to support

enterprises and entrepreneurs to familiarize themselves with the concept of Corporate Social

Responsibility by creating a network of enterprises, facilitating experience sharing and promoting SMEs

best practice.

Regional initiatives addressing a component of CSR/SR

CCI Bucharest implemented projects such as:

EPOCEnergy for a cleaner ci ty

Tex-EASTile: sustainable innovation for texti le in South East Europe within the South EastEurope Transnational Cooperation Program"

CRC-ECP: Regional consultancy and training services center for developing an entrepreneurialculture in the field of eco-innovative technologies and good practi ces for energy and the

environment

EMAS inf ormation centerfor Bucharest region

I nnovative training for i ncreasing the knowledge base of the European polymer industry inrelation to REACH (REACH is the European Community Regulation on chemicals and their safe

use.)

Social partners and the civil society in the context of supporting employment and socialinclusionin the BucharestIlfov region

EcoEmergeDeveloping emergent ecological markets

In 2007, CCI Constanta implemented the project "ECO-AMBALAJ" to prevent and reduce theenvironmental impact of packaging and packaging waste.

Sources: http://www.ccir.ro/; http://procon.ccib.ro/procon/web/guest/home; http://www.boussolecsr.eu/ro/index.


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Unlike the Chambers of Commerce, whose interest and involvement in CSR/SR and related topics hasincreased significantly in recent years, professional associations are less aware of their role and potential

impact on promoting responsible business practices and developing an overall responsible businessenvironment

9. Though scarce data is available, a couple of projects currently being implemented have

been identified.

The project Active and involved partner is currently being implemented by the General Union ofRomanian Manufacturers (UGIR) with its partners, with the purpose of training 800 people in the lobby

and advocacy field to represent legitimate interest groups at national level and to succeed in transformingsocial dialogue into an efficient practice10. UGIR is also partner in the project I nvestors in People, a

transnational partnership to increase the interest of employers in developing human resources and theirsocial responsibility through trainings, consultancy and sharing European best practices of 8 regionalcenters.

The project CementNet Promoti ng the social r esponsibil i ty of enterpri ses in the cement industry iscurrently being implemented by the Romanian Federation of Cement Unions with the purpose of trainingsocial partners and civil society organizations to promote and implement CSR activities, stimulate socialdialogue on the concept and benefits of CSR in the cement industry, promote best practice knowledge

transfer of CSR in the cement industry and encourage the sustainable development of cementcommunities by engaging local stakeholders.11

5.3. Specific CSR/SR bodies and organizations

There are several initiatives of networks, forums, blogs and websites on CSR/SR and sustainable

development in Romania, many of which developed in recent years. Their role in raising awareness,providing tools, promoting and maintaining dialogue in the field, as well as communicating good and bad

practices, is very important as they are at the meeting point between civil society, public and privateorganizations. At the moment, the online environment is the most important source of information in the

field. A selection of initiatives is presented below.

ResponsabilitateSociala.ro12is the first online network in Romania that supports companies and CSR/SR

professionals in defining and developing CSR/SR, promotes CSR/SR and Good Practices at all levels of

society and provides companies with useful information and relevant tools. It was set up in 2006 andcomprises 40 companies today and 125 Romanian case studies, resources, analyses based on international

researches and reports, articles by national and international CSR/SR experts, and interviews.

CSR Romania13 has developed a similar specific web site on CSR/SR and delivers daily news and

information to the public with the purpose of popularizing the concept of ethical management and

CSR/SR more specifically,in order to increase the competitiveness of companies and enterprises. This isrealized by promoting the CSR/SR concept, as well as responsible business practices (e.g. via analyses

and research, articles, interviews, conferences, seminars or newsletters etc.). CSR Romania has recentlybecome an affiliate of CSR Europe (November 2011).

9Analiza tendintelor si bunelor practici in materie de RSI la nivel european si national, report as part of the project PRO.CONPromoting the concept of social responsibility of enterprises,2009 -2011 (http://procon.ccib.ro)10Project website http://implicat.info/11Project website http://cementnet.ro/12http://www.responsabilitatesociala.ro/13www.csr-romania.ro


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Specific websites, blogs and forums have been developed in the last couple of years as part of morecomplex projects. One such example is Responsabilitate-Sociala.org14, a website developed as part of the

project The Social Responsibility of Companies aimed at developing the environment and localcommunities, implemented during 2009 2010. The website provides news and a section with fewresources. Another example is ActionamResponsabil.ro

15, a network developed as part of the projectActing responsibly! CSR Social Network implemented during 2010 2013 with the aim of

developing a national network of promoters to advance knowledge and experience in the field of CSR/SR.It provides news, resources, events, statistics and campaigns. Eight regional information and assistancecenters have been set up to support interested companies and organizations and several workshops have

been organized for all development regions.

StiriONG16 is the most important database and information platform concerning the civil society. It was

developed by the Foundation for the Development of the Civil Society as part of the project Civil

Society Catalogue 2008 with the purpose of facilitating social partnerships between the civil society, thebusiness sector, public institutions and citizens by providing information, news about projects and events,

about public and private financing opportunities, and by organizing courses and trainings to buildcapacity. The portal hosts the most complete and up to date database of Romanian NGOs (associations,

foundations, unions and other similar structures) and issues one of the most known newsletters in the

field, since 1998.

In recent years, other dedicated organizations have emerged, such as the Center for Corporate

Citizenship Romania17, a small non-governmental consultancy center providing national and

international trainings and courses in CSR/SR and related topics aimed at business representatives, civil

society, academia and government, with the purpose of raising awareness and building capacity.

In Romania there are specific events and awards dedicated to CSR/SR or one of its components. Amongthe most recent, the following events were identified: European CSR Lessons

18, a two days conference

aimed to bring European best practices to Romania and support knowledge sharing; SustainablePartnerships and Good Practices in Social Responsibil ity

19a series of 8 workshops on CSR/SR, social

dialogue, partnerships, indicators and best practices aimed at all relevant actors of society; Biz Days20

a

five days event comprising conferences, workshops, presentations and case studies that dedicated anentire day to CSR/SR; Green Biz Forum

21an event dedicated to raising awareness on green trends and

CSR/SR, campaigns and networking.

Among the dedicated awards we can list: Awards for a Cleaner Environment22rewarding CSR/SR

projects of initiatives aimed at protecting the environment through waste management and recycling ofwastes and electric equipments; Civil Society Gala23promoting and rewarding the Romanian civil societysector; People for People Gala24 recognizing and rewarding community involvement projects; Public

Participation Awards25

rewarding citizens, organizations and public authorities who implement change oradopt a public decision in the benefit of the community which they represent. Other types of events and

14 http://www.responsabilitate-sociala.org

15http://www.actionamresponsabil.ro/16http://www.stiriong.ro/17http://cccro.org18http://csrlessons.eu/19http://www.actionamresponsabil.ro/20http://www.zilelebiz.ro/21http://www.bizforum.ro/greenbiz5/22http://www.hotnews.ro/gala_premiilor_pentru_un_mediu_curat23http://www.galasocietatiicivile.ro24http://gala.arcromania.ro/25http://www.ce-re.ro/g3p/


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awards have dedicated specific days/sections to CSR/SR and CSR/SR related topics. Such examplesinclude: Romanian PR Award26comprising the award categories Social Responsibility and Stakeholder

Engagement Dialogue and Non-governmental organizations. Civil Society.

5.4. Education institutions

Another aspect which reveals the level of growth of the field of CSR/SR in Romania refers to the

development of educational initiatives. These are not only conferences or seminars on the topic, but alsostudy programs (graduate or postgraduate), research projects, continuous learning and professionalcourses on managing socially responsible businesses and projects. Education and research institutions arethose most suitable to contribute to a better understanding of CSR/SR at a national level and to thedevelopment of knowledge and abilities of professionals, supplying the information and working tools,

encouraging debates, disseminating results and ensuring increasing legitimacy and professionalization ofthe field.27

The desk research revealed that, though increasing importance is paid in recent years to education,

research and training on CSR/SR, education and research institutions have not fully exploited their role inthe advancement and promotion of CSR/SR in Romania. The topics of CSR/SR or sustainable

development do not form the objective of standalone study programs. Specific components of the topics(such as environment protection, quality management, business ethics of employment relations) are mostoften included in the curriculum of other higher education programs, such as management,communication or marketing studies, or can sometimes constitute programs themselves (environment

protection studies). Even in the latter case, more attention is paid to the technical aspects of the topics

than to business impact on the environment or business contribution to sustainable development throughresponsible business conduct. This finding confirms the findings of previous research.

28

The situation is characteristic for research initiatives as well- though many research studies addressingone of the components of CSR/SR have been conducted (i.e. environment research, employee relations

research, equality and non-discrimination research), few CSR/SR have been conducted in recent years at anational level and those were under management, communications of marketing departments. Two typesof research have been identified to date:

Complex research programs which span few years and involve a series of (collective) activitiesand initiatives (among which debates, workshops etc. One such example is the study concerning

the transformation of corporate social r esponsibil ity poli cies as levers for achieving sustainable

development i n Romania, conducted by the Faculty for Public Relations and Communication,

National School for Political and Administrative Studies, during 20072010. The study makesuse of secondary data (analysis of legislation and national environment, as well as field researchamong companies, decision makers and beneficiaries) with the purpose of producing acomprehensive analysis of CSR/SR in the context of public interest, company competitiveness

and sustainable development29

.

Specific individual researches conducted over a short period of time, usually few months.Examples of such studies identified are:

26http://www.praward.ro/27Analiza tendintelor si bunelor practici in materie de RSI la nivel european si national, report as part of the project PRO.CONPromoting the concept of social responsibility of enterprises,2009 -2011 (http://procon.ccib.ro)28H. Csafor (2008)29http://www.comunicare.ro/rsc/index.html


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6. Responsible practices in Romanian SMEs

From a small local market shop to a multinational enterprise, every business entity has its stakeholdersand its impacts on society, both positive and negative. But when CSR is discussed in policy circles, themedia and wider civil society, the focus tends to be on the largest companies. Small- and medium-sizedenterprises (SMEs) are often overlooked. Although they play an important role in the economy of acountry, most tools, frameworks and justifications for responsible business activity tend to cater for large

companies.

Case box 2: The role of SMEs in development

For developing countries, integration into the global economy through economic

liberalization, deregulation, and democratization is seen as the best way to overcome poverty

and inequality. Crucial to this process is the development of a vibrant private sector, in which

SMEs play a central part. SMEs make up over 90 per cent of businesses worldwide and

account for between 50 and 60 per cent of employment. However, their importance in thedevelopment process goes beyond their strength in number. There is a rich body of research

on the development contribution of small enterprises. While not entirely without some

controversial areas, there would appear to be widespread consensus on the following points:

SMEs (partly because of the industrial sub-sectors and product groups covered bythem) tend to employ more labour-intensive production processes than large

enterprises. Accordingly, they contribute significantly to the provision of productive

employment opportunities, the generation of income and ultimately, the reduction of

poverty. It is through the promotion of small enterprises that individual countries

and the international community at large can make progress towards reaching the

global target of halving poverty levels by the year 2015.

There is ample empirical evidence that countries with a high share of smallindustrial enterprises have succeeded in making the income distribution (bothregionally and functionally) more equitable. This in turn is a key contribution to

ensuring long-term social stability by reducing ex-post redistributional pressure and

by reducing economic disparities between urban and rural areas.

SMEs are key to the transition of agriculture-led to industrial economies as theyprovide simple opportunities for processing activities which can generate sustainable

livelihoods. In this context, the predominant role of women is of particular

importance.

SMEs are a seedbed for entrepreneurship development, innovation and risk takingbehaviour and provide the foundation for long-term growth dynamics and thetransition towards larger enterprises.

SMEs support the building up of systemic productive capacities. They help toabsorb productive resources at all levels of the economy and contribute to the

creation of resilient economic systems in which small and large firms are

interlinked. Such linkages are of increasing importance also for the attraction of foreign

investment. Investing transnational corporations seek reliable domestic suppliers fortheir supply chains. There is thus a premium on the existence of domestic supporting

industries in the competition for foreign investors.

SMEs, as amply demonstrated in information and communication technologies, area significant source of innovation, often producing goods in niche markets in a

highly flexible and customized manner.

Source: UNIDO (2002)


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Though large organizations have been the drivers of CSR/SR in Romania, it doesnt mean that CSR/SR isnot practiced by SMEs. A continuous focus on large organizations risks fueling the assumption that, while

large multinationals and large Romanian companies have started to gradually develop a culture of socialresponsibility, the concept of CSR/SR is less familiar to SMEs and that their engagement in CSR/SRinitiatives or processes is weak.

Our organization has experience collaborating with SMEs. They usually support causes with fundingand being smaller than multinationals, the process is more direct, flexible and easier. Some even

seem more open to the idea of getting involved. Their support usually consists of ad-hocsponsorships for causes that they dont support by themselves, but which attract more than one

donor. SMEs contribute even with in-kind donations, services or volunteers because often it seemseasier. (Simona Serban, Cluj Community Foundation)

Weve had collaborations with small local businesses that wanted to develop a relation in the field of

ecology and environmental protection, from kindergartens to private schools developing educationalprograms, to a publishing house developing an ecology book, to small shops or producers (i.e.bicycles or bio products) aiming to support common causes and develop their brand. Collaborationswith SMEs are very diverse. They each aim for something and we meet half way, building a win-win

initiative, either short or long term. (Doru Mitrana, Mai Mult Verde Association)

At a local level we collaborated with SMEs, though they seem more difficult to engage because theydont have the same image policy and CSR strategy as a large organization with dedicated

departments. With SMEs its the director who is open to discuss or not. Weve had goodcollaborations with Moldova Mall and Felicia Carrefour who supported and promoted our social

campaigns to collect food and clothing for underprivileged children. Another example is ourcommunication agency which provides pro bono expertise for our campaigns. There are diversemechanisms for collaborating with SMEs and according to their interests and possibilities, we can

work together. (Diana Paius, Bethany Foundation)

Recent studies at European level have started to pay close attention to SMEs way of doing business and

impact on society. The premise is that SMEs are a major economic force, upon which large numbers ofpeople in developing countries depend for their livelihoods. SMEs are the biggest employers, and thejoint impact of their operation is considerable.31

Another unfounded assumption is that SMEs tend to organize themselves based primarily on economicimperatives rather than societal considerations, given their resource constraints. However, this seems very

much influenced by two general perceptions: that SMEs are little big companies and CSR/SR should bescaled down to fit their size and that of CSR/SR representing only voluntary social or environmental

programs, differentiated from company core business.

I do believe SMEs have the resources to be responsible, but at a much smaller scale. What isimportant though first of all is for them to understand the concept, the importance and to have the

will to engage. CSR is after all knowing how to ensure a connection between what you want to do,what you need to do it and the people you address. Its about understanding how to do things. Andone cannot copy when it comes to CSR. No matter what you do, its a field in which you cannot

copy what others are doing. Large and small companies need to understand the difference theymake and identify their own ways, according to their own strengths and capabilities, their ownbudgets and human resources. In our community, there are two big organizations, Transgaz and

Romgaz, which constitute the economic engine of the city. But many smaller companies get

31H. Csafor (2008)


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involved in the community as well, to a different level, as they can. Examples I know of are Armax,Dafora and Conmag. They are open and, as much as they were able, they took part in various

initiatives. (Elisabeta Ghidiu, Transgaz)

Many of the pioneering environmental practices that are now part of mainstream CSR/SR were pioneered

by small enterprises or community groups and were driven by strong values and ethics. One of the most

renowned examples is The Body Shop, begun in the UK as a small values-driven SME, which currentlycomprises over 2500 shops worldwide, including six in Romania32. Other examples of social and

environmental innovation in Romania are demonstrated in the organic farming industry, recycling andrecycled products or wind power.

There are two approaches to business. There is the classical approach in which the single mostimportant thing is profit. Most companies are built on this philosophy and they are not doing badly.

And there is a second approach which I personally felt is more suitable for my business. Its a green

approach to doing business. Of course we have to ensure a profit to support our activity, but profitalone is not the only thing that matters. The impact of business on the people we work with, theinfluence on clients and suppliers, the influence on society, the manner in which we get involved in thewelfare of society, how to direct money towards social activities, how the community sees us all

these are things that matter. (A. Dobre., PointMax Solutions)

The focus on SMEs SR is welcomed and overdue in Romania, as well as analyses of the differentdynamics, issues, pressures and drivers facing SMEs, their potential to implement strong responsible

businesses and the benefits that might follow.

6.1. Challenges and benefits

6.1.1. Business links between SMEs and large organizations

Increasingly large companies are bein

analysing csr status in romania

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