Assessing the State of Corporate Social Responsibility (CSR) in Central & Eastern Europe (CEE)

NESsT and CE Capital have teamed up to complete the first survey of “The State of Corporate Social Responsibility in Central Europe.” The survey is the first independent assessment and analysis of theCSR activities of 200+ of the leading corporations active throughout the eight new EU member countries of Central Europe as well as the extend to which these corporations meet their social responsibilities.

Background

In recent years a growing number of major public and private companies in the United States and Western Europe have embraced the concept of corporate social responsibility (CSR) and developed methodologies of tracking their activities and performance, either as a conceptual overlay to its previous activities or after being subjected to growing external scrutiny. The string of corporate scandals in the late 1990s and the early part of this decade has not only been a catalyst for the review of corporate governance systems but has equally brought new energy to the debate about the treatment of different stakeholder groups by leading corporations.

An evolving field

In this context, relatively new phenomena in Central Europe are ethical and socially responsible investment. While the former started out in the early 1990s as an investment approach specifically excluding investments in industries and companies explicitly harming the environment, peoples’ health and morals (such as petrochemicals, tobacco, alcoholic beverages & gambling), socially responsible investment takes a more detailed bottom-up approach.

Every company targeted for investment is analyzed alongside a wide-ranging variety of activities and aspects of its operations, including the following key categories:

•  Corporate Governance & Accountability

•  Workplace (diversity, health, safety, security)

•  Compliance with human rights (all the way to suppliers)

•  Community Involvement & Cooperation

•  Environmental policies

•  Availability of CSR data/ outside evaluation

As the number of investors following a CSR-sensitive approach grows and consumers become more sensitive to the ethical profile of companies, CSR will become an ever more important issue in the competition for customers, human resources and capital.

A seminal study

The NESsT-CE Capital study intends to provide a general overview to what extent the analyzed companies identify the criteria outlined above in their understanding of CSR. While some effort has already been made to analyze the quality of corporate governance in Central Europe, this study is believed to be the first conceptual attempt at highlighting the status quo and dynamics of CSR more broadly in the eight new EU member states of Central Europe, both among multinationals operating throughout the region as well as single-country private and state-owned companies.