Majority of Companies in Georgia Are Not Focused on Society’s Development, Survey

Majority of Companies in Georgia Are Not Focused on Society’s Development, Survey

Majority of Companies in Georgia Are Not Focused on Society’s Development, Survey

The FINANCIAL -- CSR is by definition voluntary and therefore success relies on a business-led approach. It is also diverse and constantly evolving to meet changing circumstances. Our survey was carried out in recognition of the increasing importance of CSR to business. The FINANCIAL received up to 20 responses from businesses. The remaining 300 failed to respond. The responses illustrate the general situation of CSR in Georgia. There were some examples of good practice but also evidence that the idea of CSR is misunderstood by the majority of companies.

Many companies view CSR as philanthropy or little more than financial help for socially vulnerable people. This narrow perspective means that many businesses fail to examine what this agenda means for their organization and consumers in the future. 

The majority of companies interviewed refused to name their total budget allocated for CSR, which in itself can speak of a lack of transparency at companies and understanding of the importance of financial and non-financial reports.

The survey’s results show that Georgian businesses are contributing to environment protection on a minimal level. Most of them, especially those who pollute the environment, are not involved in the greening of the areas where they operate. 

There is a lack of links with local communities. The majority of companies are not aimed at increasing the financial level of their clients and local populations.

A significant majority of respondents pointed to differences between large and small business and noted this had implications for how CSR is practiced.

Corporate responsibility is not just the preserve of big business but something which every business can adopt. Indeed, smaller businesses can, and do, contribute significantly to the environment and, especially, to society, as they can have closer links with the communities they serve.

Many small and medium sized enterprises do enormous good for the environment and communities around them. And of those that do, a high proportion do not publicize the good contributions they make, and thus potentially miss out on economic benefits.

Activities by companies

Only three companies from all of those surveyed confirmed the presence of a CSR Manager’s position. These are: British Petroleum, Crystal MFO, and Silknet.

Pasha Bank’s activities are more associated with sponsorship and charity. The Bank financed the education of three children. It also supported the Tbilisi Mayor’s Office in rehabilitation after damage caused by the flooding in June 2015. Pasha Bank also provides marketing specialists with free professional books.

GT Electronics spends 1-1.5% of its total revenue on CSR projects, according to Nino Tabatadze, Deputy Director. In 2015 GT electronics was involved in a tree planting campaign, which aims to popularize the Caucasian Fir-Tree.

GT, as an active member of the Businesswomen’s Association, was involved in support of women entrepreneurs badly affected by the Tbilisi floods in June 2015. According to Nino Tabatadze, GT Electronics takes care of and keeps green the territory where it operates.

CSR is part of the communication manager’s responsibilities at Japan Tobacco International (JTI). “The budget for CSR activities up till 2018 is already defined,” said Anna Skhiladze, Communication Specialist in the Caucasus, Corporate Affairs and Communication.

She said that according to JTI, global social responsibility company policy should allocate 0.5-1% from annual revenue for CSR projects. In 2015 JTI was also supporting the rehabilitation works in Tbilisi following the flooding. It covered the utility expenses of families affected by the natural disaster.

There is neither a CSR budget nor CSR position allocated at Georgian Wine Association, according to Tata Jaiani, Communication and Business Development Manager of the Georgian Wine Association. However, the core business of the Association is in line with CSR values. It promotes Georgian wine producers worldwide, keeps old wine producing traditions; supports research; and supports the development of wine tourism. “Unfortunately we did not find donors for CSR projects. Next year we will intensify activities focused on CSR projects,” said Tata Jaiani.

According to Ltd Prestige, one of the leading retailers of perfume brands in Georgia, the company was involved in charity projects last year.

One of the best examples of the SME role in CSR is Natali Group, one of the leading networks of beauty salons in Georgia, which spends a significant share of its revenue on CSR activities. According to Natali Toloraia, owner of the company, each year the company allocates 25% of its total revenue for education and professional development purposes.

The company was granted state authorization for providing professional education. “We are aimed at supporting socially vulnerable people by providing them with trainings and help in building their careers,” said Toloraia. The club provides free services to people with low incomes. Students of Natali Academy regularly visit orphanages and homes for the elderly, caring for the residents’ beauty. In addition, Natali salons are adapted for people with disabilities. Natali Group incorporates beauty salons, spas, anti-ageing clinics; beauty shops, solarium clubs; and distribution. “We have created a free and equal working environment for our workers,” Toloraia told The FINANCIAL.

Nitsa Cholokashvili, Public Relations Manager, is in charge of CSR issues at IDS Borjomi Georgia, one of the leading producers of spring and mineral waters in Georgia and worldwide. In 2013 the company established its training centre in Borjomi. Up to 2,000 people have passed the course up till now. The training centre teaches students foreign languages and computer skills. It also supports employment.

“Part of the factory owned by IDS Borjomi is now occupied by the centre, which has become quite popular in the region. We have had great results. Up to 30 school leavers became students of universities in Georgia. Many of them received state grants for free education,” Cholokashvili told The FINANCIAL.

Alliance Group Holding spent more than USD 200,000 on CSR projects in Georgia. “In 2015 we held a masterclass by Jordan Belfort, an American author, motivational speaker, and former stockbroker. This event was aimed at improving the entrepreneurship and marketing skills of the Georgian business audience,” said Salome Kukava, Corporate Communications Manager at Alliance Group Holding.

TBSC Consulting contributed to the recycling of paper and plastic materials. CSR management at TBSC is included in the responsibilities of the company’s head.

In 2015 Unicard paid the medical expenses of children with cerebral palsy. It was involved in the ‘Wings for Life’ project.

Sarajishvili spends 2% of its total revenue on CSR, the company told The FINANCIAL. These funds mainly go towards medical support and education.

CSR issues are included in the responsibilities of the Marketing Manager at IRAO Insurance Group, member of Vienna Insurance Group. It’s expected that in 2016 IRAO will spend an extra EUR 30,000 on CSR activities. This sum was allocated by VIG as a prize in a corporate contest. The company said it spends 5% of its total income on CSR projects. However, in 2015 it was USD 5,000.

BP Georgia is of the companies who pioneered Corporate Social Responsibility projects in Georgia. It spent around USD one million on CSR in 2015. Development of the local population is one of the most important projects to be implemented by BP in 2015.

A project which was started in 2013 brings many benefits to the population who live close to the pipeline. 322 infrastructure rehabilitation projects are implemented with an average of 50% community contribution. 20 Social Enterprises created by the Community Based Organizations generated income and extended the provision of social services to their constituent communities; 2,050 farmers established individual and group demonstration farms using new technologies and increased their harvest. The increased yields resulted in an increase of target households’ incomes by an average of 20-22% average. 

457 small businesses were established and 23 scaled up their activities. The share of business activities in target families’ incomes achieved 25% and revenues increased up to 28%. More than 500 agricultural subsidized loans were disbursed. 92 rehabilitation projects were implemented in schools along WREP. 45 youth groups, with 1,212 students, were established in target schools along WREP. 60 micro-grant projects and 544 small scale environmental actions were implemented by the youth groups.

Eristavi & Partners spent about GEL 10,000 on charity and sponsorship. The company provides free legal service to the Green Georgia fund established by the Georgian Patriarchate.

DLA Piper, in the frame of its global social programme, contributed to the reform of the judicial system in Georgia. The aim of the project is to improve the access of youths to legislation and their participation in public activities. DLA Piper provided free legal advice to the Caucasus Natural Fund on issues related to the fees of using lands in protected areas.

RSM Capto spends 5% of its total revenue on CSR activities. The management of the company believes that one of the most important projects was participation in the ‘World Day’ event, which aims to teach employees of the current strategies of the company.

In 2015 RSM founded a leadership programme with the participation of top managers globally. RSM provided scholarships to 7 students. The company is mainly focused on skills development and professional education.

In 2015 BDO cooperated with American Friends of Georgia aiming to support palliative care.

Liberty Bank spends 2.5% on CSR activities during the year. Last year it was actively supporting the Solidarity Fund, contributing to fundraising by providing special software. GEL 1,802,815 was donated through Liberty Bank to the Solidarity Fund, from which the Bank directly paid GEL 213,482.72. In addition, Liberty Bank donated GEL 100,000 to people affected by the floods in Tbilisi. It also sponsored the medical treatment of several vulnerable persons abroad.

Gulf Georgia, one of the leading oil and gas retailers, said it spent GEL 100,000 on CSR. It helped more than 100 disabled people’s families.

Wrigley Georgia said 1% of annual revenue is spent on CSR. The company said it organized several activities aimed at raising awareness on environment protection. The company was involved in tree planting, and the cleaning of different areas.

Dirsi Development Company was focused on energy efficiency in its construction projects. It managed to reduce energy use by 30%. It also created a green area around newly-constructed buildings.

KPMG Georgia spent GEL 20,000 on CSR activities in 2015. The company said its main CSR directions are education, environment protection and the development of society.

ProCredit Bank Georgia is one of the few companies prioritizing environment issues in its daily work. The Bank has a special Eco Department with the following directions: 1) Environment Management; 2) Management of Social and Ecological Risks Related to Crediting; and 3) Green Crediting. By the end of 2015 the Eco crediting portfolio consisted of USD 30 million, or 7.6% of the total portfolio.

The Bank cooperates with Caucasus Nature Fund, supporting development of the infrastructure of protected areas. In 2015, ProCredit Bank gave GEL 20,000 to Algeti National Park.

HeidelbergCement Georgia has allocated GEL 230,000 for CSR projects in 2016. Last year it spent around GEL 293,000. The company raised GEL 48,060 during a marathon with 2,033 participants. Money is to be spent on development of The Rehabilitation Center of Disabled People in Rustavi.

HeidelbergCement Georgia says it promotes healthy living and charity, which is the strategy of the company.

Aldagi Insurance Company was also involved in charity projects during 2015. The company highlighted its support of people affected during the June flooding in Tbilisi.

Wissol Petroleum Georgia implemented several educational programmes in the regions of Georgia. The company distributed books in villages with limited communications. Wissol also contributed to the popularization of products made in Georgia and the sale of healthy products.

Grant Thornton helped Tbilisi Zoo in its human resource development.

Crystal Microfinance Organization spends 2% of total revenue on CSR projects. It raised financial awareness of the population. Its Smart Borrow programme aims to deliver recommendations to the clients of Crystal MFO before the credit is issued.

PSP Pharmacy retailer introduced bio bags in 2015. It is also involved in planting trees across Tbilisi.

ARDI was focused on cultural projects in 2015. It sponsored and organized more than 25 projects.

Silknet, one of the leading internet providers, spent GEL 60,000 on helping socially vulnerable people. GEL 50,000 was apportioned for people affected by the floods. It provided free communication services to more than 5,000 users including charity funds.

SilkTV provides free access to its educational content to more than 10,000 users. The company gave expensive medical equipment to clinics based in Tbilisi and in the regions of Georgia.

 

VTB Bank Georgia spent a record GEL 3 million on CSR and charity projects.