The future of CSR lies in social enterprise

Experts see the future of corporate social responsibility in social enterprise

Moscow, 16.09.2014

Social enterprise could become an attractive direction for the development of corporate social responsibility (CSR), according to participants of The Moscow Times’ ‘Corporate Social Responsibility: Best International Practices’ conference. At the same time, the panel of experts also believe that, without developing a competitive market, CSR strategies will not actively develop by themselves.

Implementation of social projects, adherence to principles of sustainable development, and supporting social enterprise have all become an integral part of every company’s business strategy, noted the participants in the discussion. Social enterprise was named one of the latest trends in CSR development by experts.

“Social enterprise is an established stage of developing relations between society and business. This concerns enterprise which differs on three counts: its activities facilitate the resolution of social issues; it is innovative (by presenting a new service, product or business model); and it is economically sustainable through the sale of goods and services,” Alexandra Moskovskaya, the director of the Centre for Social Enterprise and Social Innovation at the Higher School of Economics, told us.

She suggests that the advantage of social enterprise lies in the opportunity to use various business models and unused resources in the economy, the creation of a market environment where one does not yet exist, the consideration of the interests of society, business and state, and an orientation towards local conditions.

Social enterprise could be interesting to companies which aspire to socially responsible business. For example, companies can assist in the development of social enterprise by improving conditions in depressed territories.

“Any improvement will be for the benefit of the local community, as well as companies. It could put an end to the outflow of young people, and facilitate the resolution of infrastructure problems. If there aren’t people in the country, then there will be few assets for remaining companies,” observed Moskovskaya.

Participants in the conference noted that social enterprise really could become a new direction for CSR.

“I am not at all against hybrid forms which combine business and the social sphere. Worldwide tendencies show that social enterprise is developing. But I am not satisfied with the lack of clearly defined borders. It will lead to various things being issued in the name of social enterprise, and active abuse of these concepts is already taking place. Companies are trying to fall under this definition, even if they are only practising primitive forms of charity. If we are welcoming social enterprise, then we must agree on what it actually means,” commented Alexei Kostin, the executive director of the Non-Commercial Partnership, Corporative Social Responsibility – Russian Centre.

“Social enterprise is evidently one of the social programmes towards which society should be moving. Big business will support this direction, as it is oriented towards effective sustainable development, as well as society’s presence in the regions. A huge intellectual and human resource is hidden in social enterprise. It could bring about significantly greater stability, the resolution of social issues and the security of the population’s future. Moreover, it is a good forum for the consolidation of resources, various levels of business, society and power. It is important that this would not only provide a solution to severe social problems, but also effective cooperation on the transformation and improvement of society’s well-being,” stated the head of CSR and brand at Severstal’, Natalya Poppel.

Experts recommend that companies form their CSR strategies in consultation with society: community discussion of deliverable goods and services, and a declaration of society’s interests through NGOs and the media.

“The free market component is also important. So long as monopolies and oligopolies exist in this country, CSR will not become a competitive advantage or actively develop everywhere. The less competition there is, the less demanding the consumer becomes. Why is CSR developing so actively all over the world? Because it is a means of competition within companies. It is not only about ethics and conscience, but it is also a competitive battle. The less there is of it in Russia, the less CSR there will be,” believes Alexei Kostin.

Poppel believes that society is already expressing its interest to companies.

“Such models of behaviour are already being developed in people; where they used to expect a lot from the government, now they expect it from big business. Socially responsible business and the government are competing in their efforts for such a social partnership to begin their transformation. Business lives and interacts with a calculation of society’s interests. It cannot be any other way. Besides, demands on businesses are already being formed in legislation, therefore the necessity to be socially responsible, to present social guarantees to their own colleagues, and provide them with secure work conditions and to lower the burden on the environment,” Poppel concluded.

Author: Yulia Vyatkina

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