Comparative Evaluation of Corporate Social Responsibility Business-Practices: EU and Ukraine (2015–2016): the Research

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Vadym Hetman Kyiv National Economic University

«Comparative Evaluation of Corporate Social Responsibility Business-Practices: EU and Ukraine»

(2015-2016)

THE RESEARCH

Editor: professor L.P.Petrashko

Joint project of Jean Monnet Foundation

and Vadym Hetman Kyiv National Economic University

TRAINING «European Business-Practices of Corporate Social Responsibility»

№ 553110-EPP-1-2014-1-UA-EPPJMO-MODULE Lifelong Learning Programme

Grant agreement № 2014-1786 / 001-001

Lifelong Learning Programme

Kyiv 2017

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УДК 005.35:334.78(477:4-6ЄС):005.52(083.9)=030.161.2=111 Авторський колектив

Людмила Петрашко, д.е.н., проф.; Петро Петрашко, к.е.н., проф.;

Олена Мартинюк, к.е.н., доц.; Єгор Киян, асистент

Рецензенти

Т. Є. Оболенська, д.е.н., проф., проректор з науково-педагогічної роботи

(Київський національний економічний університет ім. В. Гетьмана) С. В. Войтко, д.е.н., проф.,

завідувач кафедри міжнародної економіки (НТУУ «КПІ ім. Ігоря Сікорського»)

Н.О. Татаренко, к.е.н., проф.,

проректор з наукової роботи і міжнародних зв’язків

(Дипломатична академія при Міністерстві закордонних справ України) Рекомендовано до друку Вченою радою КНЕУ

Протокол № 11 від 27.04.2017

«Comparative Evaluation of Corporate Social Responsibility Business- Practices: EU and Ukraine» (2015–2016): the Research / Edited by L. Petrashko.

Translated by Y. Kyian. – Kyiv: KNEU, 2017. – 67 p.

ISBN 978-966-926-166-3

The research presents a comparative evaluation of modern CSR business-practices of the European and Ukrainian companies on the subject of their terminological identification and the level comparison of understanding the CSR and its practices, motivation, basic spheres of implementation, the companies` formalized CSR policy availability, list of forms and instruments for CSR practices, basic barriers, character and methods of companies` external cooperation, prospects and priorities of CSR practices development in the corporate sector of Ukrainian economy.

УДК 005.35:334.78(477:4-6ЄС):005.52(083.9)=030.161.2=111

Розповсюджувати та тиражувати без офіційного дозволу КНЕУ заборонено

ISBN 978-966-926-166-3

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INTRODUCTION

Current business environment with its tough competition actualizes the necessity for joint efforts of all its participants not only in the improving of business efficiency, but also in the struggle for survival and sustainable development. European companies demonstrate positive growth of corporate leadership practices in sustainable development. The leaders of implementation of the practices of corporate social responsibility (CSR) at global level are the companies of the continental Europe and the UK. The CSR practice is a relatively new activity in the Ukrainian business environment.

The assessment of today’s CSR business practices of the European and Ukrainian companies for their terminological identification and the comparison of their levels of understanding of CSR, their motives, basic spheres of application, the existence of the formalized CSR policies in companies, the list of forms and instruments of CSR practices, the key barriers, the nature and methods of companies’ external interactions, the perspectives and priorities of CSR practices development in the Ukrainian corporate sector are presented in the results of the research “Comparative Evaluation of Corporate Social Responsibility (CSR) Business-Practices: EU and Ukraine” (2015-2016) according to the joint project of Jean Monnet Foundation and Vadym Hetman Kyiv National Economic University (#553110-EPP-1-2014-1-UA-EPPJMO-MODULE) under “Lifelong Learning”

program.

The team of research experts believes that the results will ensure the dissemination of frontier European experience of CSR practices in the business environment of Ukraine, will contribute to the development of a platform for the dialogue on socially responsible business between businessmen, politicians, government officials, civil society institutions, scientific and educational institutions.

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1. Methodology and research tools

The research “Comparative Evaluation of Corporate Social Responsibility Business-Practices: EU and Ukraine” (2015-2016) is the result of implementation of the joint project of Jean Monnet Foundation and Vadym Hetman Kyiv National Economic University (#553110-EPP-1-2014-1-UA-EPPJMO-MODULE) under

“Lifelong Learning” program with participation of the team of project experts, the teachers of the International management department: professor Petrashko L.P., professor Petrashko P.G., associate professor Martynyuk O.V., assistant professor Kyian Y.M. and the students of the master's degree program “International Business Management” of the Vadym Hetman Kyiv National Economic University and the Institute of Business Education.

The key task of the research is the study of practical approaches of integration CSR experience into the strategic aims of the companies of Ukrainian business environment and active involvement of students into participation in the research with the aim of distribution of the European values and popularization of CSR in Ukraine.

The primary purpose of the research is to study the modern practices of CSR for the subject of its terminological identification and to compare the understanding and the realization of CSR practices by the European and Ukrainian companies, which operate in the Ukrainian business environment.

Basic tasks of the research are the following:

 to find out an awareness and understanding of CSR concepts

 to define the reasons and spheres of CSR

 to find out the presence of the formalized policy in the sphere of CSR

 to define the forms and instruments of CSR

 to outline the circle of officials by functional providing of CSR implementation

 to estimate the presence, forms of cooperation and character of cooperation of company with the basic groups of stakeholders in the sphere of CSR

 to define the main approaches of the companies` personnel policy

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 to find out the forms of companies` activity monitoring in the sphere of CSR

 to outline the basic barriers and problems of the mentioned sphere

 to name the influence factors of decision making in the sphere of companies` CSR

 to define the basic instruments of popularization of CSR practices of the company

 to find out the sources of ideas for CSR development

 to estimate the prospects and priorities of CSR development

 to estimate the features of dependence of CSR practices from the company sizes, types of ownership, sectors of economy and regions of the country.

The mentioned factors were put into the basis of development of the tools for scientific research. The designed questionnaire “Practices of Corporate Social Responsibility of the Ukrainian Business-Environment” includes 5 key blocks. The diagnostic parameters of the questionnaire in the context of structural blocks and the amount of questions are presented in the Table. 1.1. The questionnaire is presented in the Annex 1.

Table 1.1 Diagnostic parameters of the questionnaire “Practices of CSR of the

Ukrainian Business-Environment”

Names of structural blocks of the

questionnaire Examples of questions

1 2

BLOCK 1. “General description of the company”

1. Name

2. Sphere of activity

3. Geographical region of activity 4. Amount of permanent employees

5. Beginning of activity in the sphere of CSR BLOCK 2. “Understanding of CSR

categories”

1. Your understanding of CSR…

(total amount - 7 questions) BLOCK 3. “Forms and instruments of

CSR practices”

1. Main CSR practices…

(total amount - 17 questions) BLOCK 4. “Problems and barriers of

CSR practices” 1. List of barriers on the way of sustainable development…

(total amount - 7 questions) BLOCK 5. “Prospects and priorities of

CSR practices development”

1. Sources of ideas for CSR practices development.

(total amount - 4 questions)

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The questionnaire was conducted by personal interview. It was carried out on the level of top-management of the companies of Ukrainian business environment, aiming to determine the most competent estimations: heads of the companies and their deputies, directors of the specialized subdivisions in the sphere of CSR management and their deputies. The respondents were acknowledged about 90-100% of the information related to the company`s activity in the sphere of CSR: public relations of the company, ecological aspects of activity, internal policy and relationships with employees, its policy and partnership relations with different groups of stakeholders. It allowed to receive fair answers for each of the research questions.

The total amount of 214 European and national companies of the Ukrainian business environment, activity of which extends on 22 Ukrainian regions, made up the research. Shaping the total amount of the selected companies for the research was carried out with accordance to the work-practice plan for the students of the master's degree program “International Business Management” at “Vadym Hetman Kyiv National Economic University” (2015-2016). Such approach for the selection of the companies has defined the basic limitations of this research: the design of respondents` selection - 214 companies; the absence of 100% regional and branch representation (Table. 1.2), that is explained by excluding the Crimea and the occupied regions of Donbas from the research selection.

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Table 1.2 Regional structure of the research “Comparative Evaluation of Corporate

Social Responsibility Business-Practices: EU and Ukraine”, 2015-2016.

Regions % of respondent-companies

1 2

Vinnytsya 6

Volyn 4

Dnipropetrovsk 4

Donetsk (non-occupied region) 4

Zhytomyr 4

Zakarpattia 4

Zaporizhzhya 4

Ivano-Frankivsk 4

Kirovohrad 4

Kyiv 10

Luhansk (non-occupied region) 4

Lviv 4

Mykolaiv 4

Odesa 4

Poltava 6

Rivne 4

Sumy 4

Ternopil 4

Kharkiv 4

Kherson 4

Khmelnytsk 6

Chernihiv 4

Total 100

The researched companies were divided into the European (25% of respondent-companies)¹ and national (75% of companies-respondents). The structure of the surveyed companies for the research is presented in the Fig. 1.1, 1.2, 1.3 and 1.4.

1 The following companies were referred to the group of European respondent-companies: the branches of the European companies; the companies with foreign European capital and management; the companies that operate in the European markets

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Fig.1.1. The structure of the surveyed companies for the research

Source: The research “Comparative Evaluation of Corporate Social Responsibility Business- Practices: EU and Ukraine” (2015-2016), the joint project of Jean Monnet Foundation and Vadym Hetman Kyiv National Economic University (#553110-EPP-1-2014-1-UA-EPPJMO- MODULE) under “Lifelong Learning” program.

5%

35%

29%

31%

The distribution of the surveyed business entities by their number of employees, %

Micro business entity Small business entity Medium business entity Large business entity

69,4 30,6

The distribution of the surveyed business entities by their sphere of activity, %

Services Production

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Fig. 1.4 The structure of the surveyed companies for the research

5,1 5,1 8,5

10,2

11,9 27,1

32,2

The distribution of the surveyed business entities by their service sectors, %

Conference service Telecommunications Consulting IT Banking Trade Other

11,5 11,5

23,1 26,9

26,9

The distribution of the surveyed business entities by their production sectors, %

Pharmaceutics Agriculture Construction Food Other

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2. Research results

The research “Comparative Evaluation of Corporate Social Responsibility Business-Practices: EU and Ukraine” (2015-2016) includes 214 European and national respondents of the questionnaire. According to our point of view, it can not be considered a full-scale research with the necessary representative selection.

Taking into account the above stated circumstances, the summarizing results can not be shared on all the companies of the Ukrainian business environment, which apply CSR practices. However, the European and national companies were included to the questionnaire list, that represent different industries of Ukrainian economy, geographical regions of the country, types of ownership, cross-cultural origin of capital and management. This suggests to consider that the stated research aims were reached.

The conducted research of comparative assessment of CSR practices of the European and national companies, that function in the Ukrainian business- environment (2015-2016), allowed to find out the range of variant divergences and the features of their realization in the following systems of criteria: terminological identification of the concept “CSR and its practices”; reasons and basic spheres of application; presence of the formalized responsible policy, forms, instruments and functional providing of its realization; basic barriers, character, methods and forms of external cooperation of the companies; monitoring of the responsible activity of the companies; basic instruments of popularization of the responsible practices and source of ideas, prospects and priorities of their development.

All the companies-respondents know about the CSR of business.

Identification of the social activity of the questioned companies is presented on the Fig. 2.1. According to research results, 75% of the European companies- respondents of the questionnaire use the term “CSR”, only 52% of the national companies confirm this statement. The estimation of the questionnaire of national respondents allows to draw a conclusion, that 26% see it as charity activity, 17% - as social investments of the company, 10% - as corporate philanthropy, can not

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define it - 10%. It should be noted that the corresponding indexes of estimation by the European respondents of the questionnaire are considerably higher. Namely:

42% of the respondents determine the social activity of company as charity activity, 25% - as corporate philanthropy, 23% - as social investments and only 6%

of respondents can not identify it.

Fig. 2.1. How would you define the social activity of your company? (%

of positive answers of the interviewed respondents)

The level of understanding of CSR, while including the complete list of activity spheres, distinguishes the group of the European companies from the national group. However, the range of divergences of their estimations of the questionnaire is insignificant. In relation to maintaining of CSR, the respondents of questionnaire include the following into this activity: observance of legislation norms (79% of European and 49% of national respondents), common style of

42%

25%

23%

75%

6%

26%

10%

17%

52%

10%

Charity activity

Corporate philanthropy

Social investments

Corporate social responsibility

Other

European companies National companies

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doing business in the world (13% of European and 19% of national respondents), presence of corporate management code (48% of European and 34% of national respondents), national leadership (6% of European and 14% of national respondents), realization of regular ecological assessments of activity (27 % of European and 19% of national respondents), dialogue and cooperation with interested parties (37% of European and 32% of national respondents), social activity (79% of European and 58% of national respondents), providing of industrial safety (33% of European and 22% of national respondents), providing of good personnel policy (Fig. 2.2.).

The group of the European respondents of the questionnaire has a complete idea about the maintaining of CSR (100% of the polled respondents). It should be noted that only 5% of national respondents of questionnaire see the CSR of company in the complete list of the named spheres. Received results show the movement of CSR accents into internal social and personnel measures among national respondents of the research. The explanation for it is the currently formed dependence of the effectiveness of company on the labor productivity of employees, their qualification, competences and loyalty to their company. The stereotype, that CSR is associated with charity activity, is widespread in the Ukrainian business-environment. According to the results of the questionnaire, 36% of the polled national research respondents included charity in the sphere of CSR.

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Fig. 2.2. Your understanding of corporate social responsibility (% of positive answers of the interviewed respondents)

Responsible attitude towards environment has not become the realized necessity for the national companies` management of corresponding policy yet.

Only 19% of the corresponding respondents consider the necessity to conduct the regular ecological estimations of their activity. It means that most of the national companies do not see themselves socially responsible for the solution of ecological problems. For comparison, 27% of the European respondents of questionnaire

100%

79%

13%

48%

6%

27%

37%

79%

33%

77%

6%

5%

49%

19%

34%

14%

19%

32%

58%

22%

45%

5%

Incorporating a complete list of CSR spheres

Observance of legislation norms

Common style of doing business in the world Existence of Corporate management code (or

others)

National leadership Conducting regular ecological assessments of

activity

Dialogue and cooperation with interested parties

Social activity of the company

Providing of industrial safety Applying the basic principles of equality, justice and motivation in the human resources policy

Other

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defined the mentioned sphere, as an obligatory constituent of their activity (Fig.

2.2.).

The presence of the formalized policy in the sphere of CSR (strategies of CSR) in the company, that spreads on the activity of company in the country of its origin and abroad (including suppliers), was confirmed by 56% of the European questionnaire respondents and only by 14% of national respondents. Thus, the bigger part of national respondents, unlike European, conduct CSR not systematically and not within the framework of the planned strategy. It means that CSR is not perceived by Ukrainian business structures, as a part of strategic management, although the bigger part of the polled national respondents practices certain measures of CSR. Converting CSR into the mandatory part of the development strategy for the company remains for national respondents the matter of the future (Fig. 2.3.).

Fig. 2.3. Existence of formalized policy (strategies in the sphere of CSR) of the company (% of positive answers of the interviewed respondents)

56%

15%

12%

10%

8%

14%

11%

27%

37%

9%

Yes, it touches the activity of the company in and outside the country of origin, including suppliers

Yes, it touches the activity of the company in and outside the country of origin, except suppliers

Yes, it touches the activity of the company in the country of origin

No, but it is in the process of development

No

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For majority of the European and national companies of the Ukrainian business environment, the basic reasons for CSR are: positive image of the company (62% of the European respondents and 65% of national respondents);

social protection of employees (accordingly 85% and 49%); forming of competitive advantages (accordingly 62% and 39%); introduction of common standards (accordingly 42% and 29%); decision of management (accordingly 27%

and 26%); altruism (accordingly 17% and 14%); international initiatives (accordingly 27% and 19%); tolerance is with the authorities (Fig. 2.4.).

Fig. 2.4. Reasons for CSR in the company (% of positive answers of the interviewed respondents)

17%

62%

8%

62%

85%

8%

27%

8%

12%

6%

10%

27%

42%

14%

65%

18%

39%

49%

1%

26%

22%

14%

2%

6%

11%

19%

29%

Altruism Positive image of the company Tolerance with authorities Forming of competitive advantage Social protection of employees Requirements of shareholders Decision of top-management Requirements of consumers Requirements of interested persons Obligatory conditions of financial institutions Activity of noncommercial organizations Activity of mass-media International initiatives Introduction of common standards for all the

company

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The international image of the company was put into the first place in the list of the main factors of influence on decision-making about CSR practices implementation by the group of European companies (52% of the polled respondents). The group of national companies put the CSR goals on the first place (57% of the polled respondents). The next three factors for the European companies are: goals (50% of the polled respondents), size (29% of the polled respondents) and forms of CSR (27% of the polled respondents). Corresponding factors for national companies are: public recognition (29% of the polled respondents), international image of company (28% of the polled respondents), and address help (25% of the polled respondents).

Minor part of the polled national respondents outlined the role of factors of forms of help (13% of the polled respondents) and the possibility of receiving of tax deductions (11% of the polled respondents). It should be specified that only 2%

of the European respondent-companies marked the factor of possibility of receiving tax deductions. This issue can be explained by the absence of the real mechanisms for providing tax deductions in Ukraine. Motivation by the government authorities for tax payment on the future periods and the uncertainty of compliance of principles declared by the state explains a carefulness of business structures in opening the information about the results of activity and closes the prospects of CSR increase rates for the companies in Ukraine. The outlined features of CSR business practices touch not only the national companies, but also all other subjects of economic activity in Ukraine (Fig. 2.5.).

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Fig. 2.5. What factors do influence on decision-making about CSR in the company? (% of positive answers of the interviewed respondents)

The functional providing of CSR implementation is mostly conducted by company leaders and top-management. According to the results of the research assessments for the European companies and for national companies these indexes do not have considerable divergences. Accordingly: 31% and 45%, 58% and 53%

of the polled respondents. Such situation is explained by the integration of CSR policy into the strategic goals of the questioned respondents and by understanding of the role of responsible behavior for improving the competitiveness of the company.

The results of the questionnaire show that only 29% of the European respondents and 8% of national companies have special subdivisions for CSR development. In some companies the function of implementation of CSR practices

50%

27%

29%

23%

8%

23%

2%

52%

2%

57%

13%

16%

25%

19%

29%

11%

28%

4%

Goal

Form Size

Recipient Attitude of society and loyalty of public

authorities

Public recognition

Possibility of receiving of additional tax benefits International image of the company

Other

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in business processes is delegated to press-service (2% of European and 4% of national respondents of the questionnaire), marketing department (accordingly 21% and 9%), and other subdivisions (accordingly 2% and 12%) (Fig. 2.6.). The assessment of changes in the structure of CSR management in the researched companies shows the direct dependence of CSR management approaches from the motives of the named activity. At predominance of altruism motives, coordination and control are concentrated in the hands of company leaders. When changing the motives to create a positive reputation and image of the company, planning, implementation and control of company`s CSR is conducted within the responsibility of its РR-department or created subdivision. According to results of the conducted research, the formation of a separate functional subdivision for CSR development remains the matter of the future prospects of companies`

development in the Ukrainian business of environment. Crisis and post-crisis periods move the stated prospects farther due to reduction of incomes of business structures and shortage of finance for CSR development.

Fig. 2.6. Functional enforcement of providing CSR practices fulfillment (% of positive answers of the interviewed respondents)

31%

58%

29%

2%

21%

2%

45%

53%

8%

4%

9%

12%

Head of the company Top-management of the company Special department Press-service Marketing department Other

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The most popular spheres of responsible practices for the European and for national companies are social practices (accordingly 71% and 54% of the polled respondents). Charity practices are on the second place for the European companies (67%), and economic practices - for national companies (48% of the polled respondents), on the third place for the European respondents there are practices of responsibility for products (62%), and for national companies - charity practices (47%). (Fig. 2.7.).

The traditional formulation of the problem of CSR of business structures in relation to determination of their role in the solution of social questions demonstrates, that domestic companies are more inclined to depend on the state in realization of the programs of environmental preservation. Only 35% of the polled national respondents include ecological practices in the sphere of CSR practices.

For comparison, the mentioned index is 60% for the European respondents of questionnaire. Exceeding of the corresponding indexes compared to national companies is almost in two times.

Fig. 2.7. Spheres of the company’s responsible practices (% of positive answers of the interviewed respondents)

67%

50%

60%

71%

42%

37%

62%

47%

48%

35%

54%

19%

14%

39%

Charity practices Economic practices Ecological practices Social practices Ethic practices Practices of public reporting Practices of products responsibility

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According to the estimations of questionnaire of the European and national research respondents, charity activity is mainly conducted from time to time (episodically). The results of the questionnaire showed the following: for the European companies - 79% of the polled respondents, and for national companies - 52%.

Only 29% of the European respondents of questionnaire showed including of charity activity into the strategies of activity of the companies. It is necessary to notice that national companies are ahead of the European in the mentioned index.

Their estimation is 40% of the polled respondents. Such situation can be explained by consolidation and distribution of responsibility values in the corporate sector of Ukrainian economy under difficult conditions of national interests` protection of the Ukrainian people.

Fig. 2.8. Charity practices of the company (% of positive answers of the interviewed respondents)

The comparison of key reasons for charity activity of companies of Ukrainian business environment is presented on the Fig. 2.9. Most respondents of the conducted research name unselfish aid (56% of European and 55% of national companies) as the key reason for charity. The activity targeted to solve the social problems of the community and society is determined approximately by the third part of the polled respondents as the reason for charity aid (accordingly 37% and 26%). And only 19% of the polled European respondents and 25% of the national

79%

29%

52%

40%

Philanthropic activity (from time to time)

Strategic charity

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link their charity activity with their own mission, key competences and strategy, thus determining it as a part of own long-term marketing strategy.

Fig. 2.9. Basic reasons for the company’s charity activity (% of positive answers of the interviewed respondents)

The polled respondents try to diversify equally the forms of granting the charity help: financial resources, goods and services, time, professional skills of employees. But there are insignificant divergences in their usage by the European and national companies. The main form of granting charity aid by the European companies of the Ukrainian business environment is financial resource (63% of the polled respondents). For national companies this index is only 36% of the polled respondents. High rate of increasing of other forms of granting charity aid should be also mentioned, namely: volunteer labor (accordingly 38% and 37%), providing the commodities and services, related to activity of the company (37% and 43%), providing commodities and services not connected with activity of the company (35% and 25%) and providing expert help (pro-bono services - accordingly 46%

and 27%). Such distribution of answers of the polled respondents represents, firstly, the expansion of awareness of business structures about different practices of charity activity, and, secondly, about the influence of financial crisis of the last years in the context of the usage of non-financial forms for providing the charity

13%

37%

19%

8%

56%

24%

26%

25%

17%

55%

Personal interest of the owners, top- management

Social investments Long-term marketing strategy Partner’s benefits (community’s, territory’s,

region’s)

Unselfish aid (altruism)

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help. (Fig. 2.10.). Stability and consistency are the characteristics for implementation of practices of pro-bono services in the European countries: most companies provide 5% of their business hours for free professional services for unprotected segments of population, charity and public organizations.

Fig. 2.10. Forms of providing charity aid by the company (% of positive answers of the interviewed respondents)

The determined tendencies for financial and material forms of providing charity aid influenced the change of the usage of instruments for its realization.

According to the research results, addressed material aid (54% of the polled respondents) and volunteer programs (46% of the polled respondents) are the most widespread instruments of charity activity for the European companies in the Ukrainian business environment. As for national companies, the instruments are products (40% of the polled respondents) and volunteer programs (35% of the polled respondents). Corporate volunteering and pro-bono services, that are based on time-management and competence of company`s employees, are seen by management as an instrument for charity and as an effective method of personnel development: creation of same-minded teams, development of loyalty of employees to the company, estimation and development of personal qualities of employees, formation of the corporate culture of the company.

37%

35%

63%

38%

46%

43%

25%

36%

37%

27%

Goods and services connected with activity of the company

Goods and services are not connected with activity of the company

Money Volunteer labor Expert help

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Creation of corporate funds is the least widespread instrument of charity activity of companies. It should be mentioned that creation of own corporate funds is a method to separate the charity activity from the main business activity of the company. As for now, the companies of the Ukrainian business environment at the current phase of development do not have enough money to provide systematic, long-term financing, and, thus, long-term strategy for charity activity. And for this reason, the above-named instrument of charity activity is not applied in practices of corporate philanthropy of the respondent companies.

The comparative estimation of partnership of the companies of Ukrainian business environment in the sphere of charity activity is interesting enough, according to our point of view. The third part of the polled European and national respondents uses partner programs as an instrument of charity activity. The directions of assessment of the named partnership are defined by the methodical approach of the research, namely: partnership with own collective and cross- sectoral partnership with business structures, public society and public sector.

Adaptation of the advanced experience of usage of cross-partner approaches by companies allows to reach the goals that would be impossible in case the companies worked independently. It also creates clear competitive advantages:

achievement of synergetic effect due to combination of resources; strengthening of connections with the regional communities; creation of the new channels of communication connections.

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Fig. 2.11. Instruments of charity activity, available in the company (%

of positive answers of the interviewed respondents)

The key economic practices, which are used by the polled European and national companies, are the competitive practices (accordingly 63% and 51% of research respondents). It should be also noticed about the high representation of the following practices in the list of economic practices of responsibility: practices of market presence (54% of the polled European respondents and 47% of national), anticorruption practices (accordingly 40% and 35% of the polled respondents), purchase practices (accordingly 31% and 34% of the polled respondents). The difficult political and economic situation in Ukraine influenced on the amount of practices of responsible investing. Thus, only 29% of the polled European and 22%

of national research respondents use these practices in their activity (Fig. 2.12).

54%

15%

31%

46%

15%

19%

25%

29%

16%

30%

35%

12%

40%

22%

Targeted material assistance Own charity programs (fund) Partner charity aid (through mediators) Volunteer programs (own or partner’s)

Social marketing Product aid Services aid

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Fig. 2.12. Economic practices of the company (% of positive answers of the interviewed respondents)

Accounting the interests of the basic groups of stakeholders (state, investors, shareholders, suppliers, clients, consumers, community, research and educational institutes) and the level of cooperation with interested parties with the help of an open dialogue and mutually beneficial cooperation at the European companies is estimated at 63% and 65% of the polled respondents, at national companies - 46%

and 63% of the polled respondents. Mostly, national respondents take into account the interests of business, consumers, state and own employees.

It should be stated that both groups of the polled respondents do not consider defending their own business interests in relations with stakeholders to be important (10% of the European companies and 14% of national). At the same time, research results prove that both the European and national companies close their information on accounting. Only 35% of the polled European and 24% of national companies determine the stated criterion as an important character feature of mutual relations with all groups of stakeholders (Fig. 2.13). First of all, it is explained by immaturity of companies in the questions of implementation of

63%

54%

29%

31%

40%

51%

47%

22%

34%

35%

Competition practices

Practices of market presence

Practices of responsible investing

Purchase practices

Anticorruption practices

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international standards of accounting and in the joining to the global initiatives of responsible business.

Fig. 2.13. Nature of cooperation with interested parties (suppliers, consumers, financial institutions) (% of positive answers of the interviewed respondents)

The forms of external cooperation of the companies with stakeholders, that are used by the European and domestic respondents, are consultations (accordingly 60% and 48%), seminars (accordingly 37% and 35%), press-conferences (accordingly 27% and 41%), sociological researches (accordingly 13% and 22%) (Fig. 2.14). There are no considerable divergences in the applying of the forms of external cooperation with stakeholders by the European and national companies on the stated issues. The size of company also does not influence on choice of the mentioned forms of cooperation.

63%

65%

10%

35%

0%

46%

63%

14%

24%

1%

Open dialogue Mutually beneficial cooperation Protection of own interests Accessibility and transparency of company’s reports

Other

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Fig. 2.14. Forms of company’s external cooperation (% of positive answers of the interviewed respondents)

The main form of cooperation with business partners of the all polled respondents is the exchange information: the European companies - 65%, national companies - 66%. Coordination of activity as a form of cooperation with business partners is determined only by 31% of the European research respondents and 34%

of national. Such forms of cooperation, as co-financing of the programs and grants, joint activity is used by a small amount of the polled respondents: accordingly, 19% and 12% of the European respondents and 14% and 15% of national.

Considerable divergences between the European and national companies are not observed, that is explained by specific Ukrainian market conditions (Fig. 2.15).

60%

37%

13%

27%

8%

48%

35%

22%

41%

12%

Consultations

Seminars

Sociological researches

Press-conferences

Other (name)

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Fig. 2.15. Forms of cooperation with business-partners (% of positive answers of the interviewed respondents)

The most popular spheres of cooperation with partners in CSR practices for the researched companies are: ecology and environment (37% of the European respondents and 25% of national), social protection (accordingly 29% and 38%), health protection (accordingly 29% and 34%), science, technologies, researches (accordingly 31% and 27%), education (accordingly 23% and 22%), sport (accordingly 19% and 24%), development of the community and region (accordingly 9% and 24%), human rights (accordingly 15% and 11%), culture and art (accordingly 13% and 19%). The results of estimations confirm that national companies have a wider circle of cooperation with partners when it touches social protection, health protection, development of community and region, sports, religious organizations. But these divergences are not considerable (Fig. 2.16).

65%

31%

19%

12%

66%

34%

14%

15%

Exchange of information

Coordination of activity

Co-financing of programs and grants

Joint activity is in the sphere (name)

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Fig. 2.16. Sphere of cooperation with partners (% of positive answers of the interviewed respondents)

Traditionally, the European respondents of the questionnaire widely use ecological practices that influence the formation of costs for products or services.

Namely, they are the practices of energy efficiency (58% of the polled respondents), “green office” practices (46% of the polled respondents), practices of wastes utilization (40% of the polled respondents), practices of resources usage (38% of the polled respondents), transport practices (27% of the polled respondents). Corresponding indexes for the national research respondents are accordingly 32%, 37%, 32%, 42%, 21%. It is necessary to notice that the national respondents of research put the practices of responsibility for the products (46% of the polled respondents; for comparison, the European companies - 44% of the polled respondents) and the practices of resource usage (42% of the polled respondents) on the first place in their priorities of the ecological practices.

According to the experts` estimations, the amount of practices of ecological

37%

29%

23%

19%

13%

19%

15%

31%

0%

4%

25%

38%

34%

22%

24%

19%

24%

11%

27%

2%

7%

Ecology and environment Social protection Health protection Education Sport Culture and art Community development, region development Human rights Science, technologies, researches Religious organizations Other

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monitoring, practices of decreasing of the negative influence, practices of ecological studies of personnel and practices of the extreme reacting of the European companies exceeds the corresponding indexes of national companies.

This exceeding is not considerable and ranges from 6 to 15%.

Fig. 2.17. Ecological practices of the company (% of positive answers of the interviewed respondents)

According with the estimations of experts, both the European and national research respondents widely apply social practices in their activity. Thus, 87% of the polled European respondents and 55% of the national respondents use labor practices, accordingly 46% and 34% of the polled respondents - practices of human rights protection and 42% and 47% of the polled respondents - practices of cooperation with society. The research experts associate such high estimations of social practices with the perfection of Ukrainian labor legislation.

38%

40%

27%

44%

33%

44%

23%

21%

58%

46%

42%

32%

21%

46%

20%

30%

24%

7%

32%

37%

Practices of resource usage Practices of wastes utilization Transport practices Practices of product responsibility Practices of ecological monitoring Practices of negative influence decrease Practices of personnel ecological education Practices of extreme reacting Energy-efficient practices Practices of «green» office

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Fig. 2.18. Social practices of the company (% of positive answers of the interviewed respondents)

The major part of the polled research respondents name the following among the basic measures of the company`s social policy: creation of good labor conditions (98% of European and 81% of national), insurance of employees (accordingly 56% and 41%), sports and health measures (accordingly 56% and 38%), providing of vacations for employees (accordingly 50% and 39%), material aid (accordingly 29% and 42%). The insignificant exceeding of these indexes in the European respondent companies should be specified. However, the national companies are more responsible than European in the issues of material help to their employees (by 13%).

87%

46%

42%

55%

34%

47%

Labor practices

Practices of human rights protection

Practices of cooperating with society

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Fig. 2.19. Main measures of company’s social policy (% of positive answers of the interviewed respondents)

Social partnership in the sphere of CSR is practiced by 63% of the European questionnaire respondents and by 48% of the national companies. It shows that almost half of the companies of the Ukrainian business environment is not ready to openly engage in CSR, to build mutually beneficial partner relations in the social sphere of the society (Fig. 2.20).

Fig. 2.20. Social partnership (% of positive answers of the interviewed respondents)

98%

56%

50%

12%

29%

56%

33%

6%

81%

41%

39%

20%

42%

38%

4%

Creation of good labor conditions Insurance of employees Providing employees’ recreation Providing recreation for employees’ children Financial aid Sport and health measures Cultural work Other (name)

63%

31%

12%

48%

39%

5%

Yes No Name the main partners and projects

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The basic measures of personnel policy of the European and national companies are personnel training (accordingly 92% and 84%) and providing the equality of employees (accordingly 67% and 55%) (Fig. 2.21). The third part of the polled respondents takes care about employment of exempt employees. 30% of them take care about personnel retraining; providing information about the vacancies in other companies - 39% of European and 28% of national companies;

the compensative programs are financed accordingly by 28% and 26%; providing help in employment - accordingly 25% and 23%; vacation payment vacation pay on job search - 11% and 8% (Fig. 2.19). Respect of human rights, providing of good work conditions is demonstrated by all respondents of the questionnaire.

Fig. 2.21. Main measures of company’s labor policy (% of positive answers of the interviewed respondents)

23% of the European research respondents and 14% national research respondents take care about employment of exempt employees. From them: 33%

of European and 35% of national companies take care about retraining of personnel; providing information about the presence of vacancies in other companies - 17% of European and 15% of national companies; the compensative programs are financed accordingly by 48% and by 46%; vacation payment vacation pay on job search - 12% and 16% (Fig. 2.22). Respect of human rights, providing of good work conditions is demonstrated by all respondents of the questionnaire.

92%

67%

84%

55%

Qualification training of employees

Providing of equality of employees regarding age, gender, nationality, religion, beliefs