Many companies in Ukraine take pride in being good corporate citizens. They give back to communities where they do business by raising money for charities, encouraging their employees to become volunteers, exceeding environmental or safety standards, or by supporting local educational initiatives.
They’re learning that the efforts actually pay dividends for their companies.
While most companies in Ukraine still view corporate social responsibility programs as unnecessary expenses, others are discovering the long-term benefits, both for the company and for the wider Ukrainian community.
Such programs aim to improve society and the environment, according to the Center for CSR Development, a Ukrainian group that promotes the practice. It generally occurs when a business commits to certain policies, expenditures, and actions designed to help its employees and the broader community.
For companies wanting to show their commitment to doing good, CSR is an important and useful public relations tool for good times and bad. “Although one cannot completely insure a company from a crisis, a business can minimize the consequences (with CSR),” said Andriy Kitura, an EY senior consultant in Ukraine. Having consumer loyalty and a good reputation during times of crisis are some of the advantages CSR can offer, he added.
The London Stock Exchange and Dow Jones sustainability indices show that investors are ready to pay more for CSR-active companies, Kitura said.
Every fifth company is willing to actively support their employees in helping Ukrainian soldiers as well as refugees from eastern Ukraine and Crimea.
Many companies choose to focus solely on the bottom line, even if it generates a degree of harm. In the case of environmental pollution, they actually end up paying more in the long run, said Anna Danyliuk of the United Nations Development Program. Corporate social responsibility should be a general standard of doing business, rather than an “add-on activity” that is not directly helpful for the company, she said.
“Although it could be costly in the short run, in the long term it has benefits for you,” said Robert Karlsson, chief executive officer of Shelton Petroleum, an oil and gas company. In 2014, the company increased its CSR budget in Ukraine by some 20 percent, supporting such initiatives as youth education programs and providing aid for people directly affected by Russia’s war against Ukraine.
The exact sum spent by the company on CSR is unavailable, as it does not publicly release its financials.
HH.ua, a leading Ukrainian job recruitment site, reports that the war in Ukraine has also affected the corporate culture of companies. For example, local companies are showing more corporate voluntarism by helping refugees, Ukrainian soldiers and the eastern regions affected by the war.
SKF Ukraine, a parts manufacturing company, also supports those affected by Russia’s invasion in the east. In addition, the company has decreased emissions of carbon dioxide by 30 percent since 2010, though no emission limits were set by law. It is planning to decrease energy consumption by 15-20 percent in the next five years.
“Now it’s even more important, taking into account cost control and the energy crisis in Ukraine,” said Tymofiy Fedorchuk, the company’s facility manager.
Ukrainian companies that volunteer in helping those affected by Russia’s invasion in Crimea and the east mainly support soldiers fighting against the aggressor and those that were wounded.
There are many ways to invest in a community. Sigma Software, a software developing company, trains up to 300 students every year for free in various information technology and entrepreneurship courses at its laboratories in Kharkiv and Odesa. The company offers practical expertise in addition to general education, said Vladimir Beck, a company board member.
It’s also enlightened self-interest: while aiding the local student community, the company receives a direct benefit by hiring up to 30 new employees from the group of students yearly. Yet the overall goal is to improve the educational process within the country, Beck said.
“It’s not possible just to acquire talent,” he said. “We need to really participate in the ecosystem of the educational system to help this talent grow.” Once a company invests in the country, then the overflow effect will start touching the company itself, as well as others, he noted.
Occasionally Sigma Software runs across skeptics from other companies regarding its local educational initiatives. But Beck views this as simply short-term thinking, when companies are not committed to a community in the long-run. “If one would like to run a sustainable business and pursue long-term goals, then skepticism should be faded out,” he said.
Overall, Ukrainians appreciate the commitment of businesses to the EuroMaidan movement and the war effort, said Maryna Saprykina, executive director of the Center for CSR Development. “For the first time in 20 years, a (recent) survey found that Ukrainians have a positive attitude towards business,” she said.
Kyiv Post staff writers Olena Gordiienko and Ilya Timtchenko can be reached at [email protected] and [email protected], respectively.
