Corporate) Social Responsibility in Romania - UNDP Situatiei... · (Corporate) Social Responsibility in Romania Situation Analysis and Current Practices Review ... Cristiana Anca,

(Corporate) Social Responsibility in Romania

Situation Analysis and Current Practices Review

With Particular Focus on Small and Medium Sized Enterprises

November 2011

(Corporate) Social Responsibility in Romania – Final Draft, 16 December 2011, English

2 | Situational Analysis and Current Practices Review

Authors of the report:

Cristiana Anca, CSR National Consultant within the Project

John Aston, CSR Technical Advisor within the Project

Eugenia Stanciu, Project Coordinator

Diana Rusu, Assistant Project Coordinator

Report prepared as part of the project

“Strengthening the capacity of the Romanian companies to develop social partnerships-CSR”

Cofinanced by the European Social Fund, Human Resources Development Operational Program 2007–2013

Project ID: POSDRU/64/3.3/S/41722

Bucharest, 2011

Due and customary care has been exercised in conducting this study but not all information provided by

others has been independently verified. No warranty, express or implied, is made in relation to the



contents of the report. No liability is assumed for any loss resulting from errors, omissions or

misrepresentations made by others.

Any recommendations, opinions or findings stated in this report are based on circumstances and facts as

they existed at the time the study was performed. Any changes in such circumstances and facts upon

which this report is based may impact the recommendations, opinions or findings contained in this report.

Reference to any specific commercial product, service, name, organization or otherwise does not

necessarily constitute or imply endorsement, recommendation or favoring by the project owners, the EU

or any agency involved in the project. The authors’ views or opinions, as and if comprised in this study,

do not necessarily state or reflect those of the agencies involved in the project.

Every effort has been made to ensure the quality of the translation is technically correct. However, where

discrepancies between the various translated texts occur, the Romanian version is to be relied upon, as the

original and formal version.

Contents



Abbreviations and acronyms........................................................................................................... 4

1. Introduction ................................................................................................................................. 6

2. Definition and usage of CSR and related terms .......................................................................... 8

3. Methodology of the paper ......................................................................................................... 11

4. CSR/SR timeline and related international initiatives .............................................................. 14

5. Overview of CSR/SR approaches in Romania ......................................................................... 19

5.1. Government ........................................................................................................................ 23

5.2. Employers and employees representatives ......................................................................... 25

5.3. Specific CSR/SR bodies and organizations ....................................................................... 27

5.4. Education institutions ......................................................................................................... 29

6. Responsible practices in Romanian SMEs ............................................................................... 31

6.1. Challenges and benefits ...................................................................................................... 33

6.1.1. Business links between SMEs and large organizations ............................................... 33

6.1.2. Market trends: increasing demand for standards ......................................................... 34

6.1.3. “Business Case” benefits ............................................................................................. 37

6.2. Level and characteristics of responsible practices ............................................................. 38

7. Conclusions and recommendations for further study ............................................................... 43

References ..................................................................................................................................... 45

Abbreviations and acronyms



CSR Corporate Social Responsibility

DG Directorate General

EBEN European Business Ethics Network

EBNSC European Business Network for Social Cohesion

EEAC European Environment and Sustainable Development Advisory Councils

EFTA European Fair Trade Association

EMAS Eco-Management and Audit Scheme

EU European Union

Eurosif European Social Investment Forum

GRI Global Reporting Initiative

ISO International Organization for Standardization

MNEs Multinational Enterprises

NEWS Network of European World Shops

NGOs Nongovernmental Organizations

OECD Organization for Economic Cooperation and Development

SMEs Small and Medium Sized Enterprises

SR Social Responsibility

SRI Socially Responsible Investment

SVN Social Venture Network

UEAPME European Association of Craft, Small and Medium Sized Enterprises

UN United Nations

UNICE Union of Industrial Employers’ Confederations of Europe



1. Introduction

In recent years, the social responsibility of companies is increasingly becoming a mainstream issue for

businesses, governments and society.

The rise in the implementation of responsible business practices in Romania began to be stronger after EU

integration and was mainly led by the engagement of multinational companies who transferred their

organizational culture and practices from headquarters at a local level and, later on, also fueled by the

opportunity to access EU funds. In addition, “responsible industries” emerged, comprising companies

whose core business objective itself is “responsible”. These types of companies make a business case of

activities that benefit the environment and/or the communities and their “responsibility” results indirectly

from the products and services they provide. Subsequent to EU integration, Romania witnessed a

development in renewable energy and waste management industries, rural or eco-tourism and the

commercialization of ecological or organic products.

While in Romania the field of CSR/SR is still at its early stages of development, many of the leading

companies in the field now understand the strategic value of a robust CSR strategy, aligned and integrated

with core business values and operations, which is translated into tangible action programs and

sustainable success.

Areas most frequently covered by CSR/SR initiatives in Romania are children welfare, education, art,

religion, environment and sport. CSR/SR initiatives do not stop only at community investment, but

address supply chain responsibility, customer services and satisfaction, employee welfare as well.

Depending on the communities, some of the causes, such as children welfare and education, at-risk social

group services and religion are much more frequently reported to other community initiatives.

Chapters 2, 4 and 5 provide details on definitions of CSR/SR and related terms used, a timeline of

CSR/SR development at national and international levels and CSR/SR approaches and initiatives in

Romania.

SME focus

Although SMEs play an important role in the economy of the country (generally, SMEs make up over 90

per cent of businesses worldwide and account for between 50 and 60 per cent of employment), most data,

tools, frameworks and justifications for responsible business activity tend to cater for large companies.

Small and medium-sized enterprises (SMEs) are often overlooked in discussions and policy circles,

leading to a series of assumptions such as: CSR/SR not being practiced by SMEs; SMEs not being

familiar with the concept of responsible business; or SMEs being organized primarily on economic

imperatives rather than societal considerations, given their resource constraints.

The focus on SMEs’ social responsibility is welcomed and overdue in Romania, as well as analyses of the

different dynamics, issues, pressures and drivers facing SMEs, their potential to implement strong

responsible businesses and the benefits that might follow.

With an aim to advance progress along these lines, the current study was conducted, as part of the project

“Strengthening the capacity of the Romanian companies to develop social partnerships-CSR”, co-



financed by the European Social Fund, Human Resources Development Operational Program 2007–2013,

Project ID: POSDRU/64/3.3/S/41722.

The main purpose of the project is to increase the degree of awareness among SMEs regarding the

importance and benefits of engaging in social responsibility and to increase their involvement in related

programs and activities, in partnership with the public sector and other partners such as companies

(multinational or Romanian) and NGOs.

Chapter 6 provides detailed information on responsible practices in Romanian SMEs, challenges and

benefits, market trends and characteristics.

Approach to research

From the point of view of research and data based on qualitative and quantitative primary information,

Corporate Social Responsibility is a field in ongoing development. This situation is characteristic at both

national and international levels. The majority of public information (studies, reports etc.) comes from

private enterprises (mostly consultancies) or non-governmental organizations and, more recently, as a

result of EU funded projects on the topic.

Data available at European level represents a conglomerate of different country-based visions of CSR

mixed with a general view of the EU Commission. This is relevant as a starting point in developing a

country specific CSR approach.

In the framework of this research, the understanding and application of CSR/SR in Romania with

particular focus on SMEs has been investigated in 8 biggest cities in Romania in selected key

organizations from all areas of society: public authorities, multinational companies, Romanian companies,

SMEs, NGOs, federations and unions, professional associations and networks.

The research focuses on the compilation of two methodologies. In addition to quantitative secondary

information gathered from a diverse range of sources through a thorough desk research, a qualitative

analysis was conducted with the purpose of bringing forward the ‘how´ in organizations’ experiences.

Chapter 3 provides detailed information on the methodology of the study, approaches and methods used,

validity and reliability.



2. Definition and usage of CSR and related terms

Business is not divorced from the rest of society. The two are interdependent and it must be ensured,

through mutual understanding and responsible behavior, that business’s role in building a better future is

recognized and encouraged by society.

As an engine for social progress, CSR helps companies live up to their responsibilities as global citizens

and local neighbors in a fast-changing world.

‘Corporate Social Responsibility is the continuing commitment by business to contribute to economic

development while improving the quality of life of the workforce and their families as well as of the

community and society at large.’

World Business Council for Sustainable Development

‘Most definitions of Corporate Social Responsibility describe it as a concept whereby companies

integrate social and environmental concerns in their business operations and in their interaction with

their stakeholders on a voluntary basis. Being socially responsible means not only fulfilling legal

expectations, but also going beyond compliance and investing ‘more’ into human capital, the

environment and the relations with stakeholders. The experience with investment in environmentally

responsible technologies and business practice suggests that going beyond legal compliance can

contribute to a company’s competitiveness. Going beyond basic legal obligations in the social area, e.g.

training, working conditions, management-employee relations, can also have a direct impact on

productivity. It opens a way of managing change and of reconciling social development with improved

competitiveness.’

European Union1, Green paper - Promoting a European framework for CSR

Attention to social responsibility has until recently focused primarily on business as a way to ensure the

link between business operations and communities were they are based. The view that social

responsibility is applicable to all organizations emerged as other actors of society, not just companies,

recognized that they too had responsibilities for contributing to the betterment of society.

For this reason, the term “corporate social responsibility” (CSR) is more familiar and applied than “social

responsibility” (SR).

More appropriate for the purpose of this study, taking into consideration the target audience, the term

“Social Responsibility” (SR) will be used from this point forward in relation to SMEs, as defined in the

ISO 26000 international standard.

1 COM/2001/0366 final



Social responsibility is the responsibility of an organization for the impacts of its decisions and activities

on society and the environment, through transparent and ethical behavior that:

contributes to sustainable development, including health and the welfare of society;

takes into account the expectations of stakeholders;

is in compliance with applicable law and consistent with international norms of behavior; and

is integrated throughout the organization and practiced in its relationships.

Activities include products, services and processes.

Relationships refer to an organization's activities within its sphere of influence.

ISO 26000: 2010

When analyzing the understanding and application of CSR within a particular country across diverse

types of organizations in different areas of operation, it becomes evident that they might vary from a

narrow focus only on ad hoc philanthropic acts, to a broader and long term approach that takes into

account the overall sustainable development of society.

We define social responsibility in a broad sense. We operate and we think based on the overall

principles for sustainable development which basically include everything the company does to

ensure long term development of both the business and society. At a global level, we operate based

on 10 main sustainable development priorities, only one of which refers to community development

and community involvement. These latter two are what is most often referred to as „CSR” in

Romania. But even in Romania we operate based on the 10 broad principles of sustainable

development, not only CSR. (Diana Klusch, Ursus Breweries)

The social responsibility component of our company is part of our overall development strategy. We

see CSR as a modern way of doing business and of promoting cohesion and understanding between

management and employees, between management and the community. It is also a way of increasing

company value in time by helping those that help us. (Elisabeta Ghidiu, Transgaz)

The understanding and application of CSR by each organization in Romania is influenced by many

factors such as size, international exposure (i.e. supply chain or customers), regional position in the

country, time horizon since initial contact with the concept etc.

As such, there are a number of other related terms used to describe in part or full the CSR/SR activity of

an organization, some of which are equated to CSR/SR in habitual language use. Some examples of other

terms include:

Corporate Responsibility, often equated to CSR

Corporate Sustainability, often referring to a long term strategic CSR/SR activity which takes

into account stakeholder expectations and is aimed at contributing to the triple bottom line

Corporate Governance, focusing on business management

Corporate Citizenship or Community Involvement, often describing an organization as being an

active citizen of the community in which it operates, participating actively in its development,

and therefore focusing more on the external dimension of CSR/SR

Responsible Entrepreneurship, a concept put forward by the United Nations which recognizes

businesses’ role towards achieving sustainable development, stating that companies can manage

their operations in such a way as to enhance economic growth and increase competitiveness while

voluntarily ensuring environmental protection and promoting social responsibility; (CSR



Glossary, 2005) the concept was mainly chosen as a means to communicate with and activate

SMEs, as “CSR” was considered to be a complex term mainly developed for large enterprises

(European Communities, 2003).

CSR is a company initiative to get involved in the community, but I would not refer only to

companies when talking about social responsibility. Individuals or NGOs can also contribute to

improving a community and that is also an act of social responsibility. We define CSR as an act of

contributing with own resources (financial, products, know-how etc.) to address a community need.

We see Social Responsibility as something that starts at an individual level and is also applied by

organizations, enterprises, local authorities. There are people focusing only on profits, unaware and

unconcerned about the needs of others around them, but there are also people that take a look

around them and realize that they are making a profit with the help of those around. In the end, this

is the responsibility of a company – to take care of those who invest in it, who buy its products or

who use it services. This is true for us as well, even though we are an NGO. We also need to operate

ethically, with professionalism and transparency, with concern towards our employees, beyond legal

requirements. We need to show concern towards the projects we implement, to correspond to real

needs in the community and to be responsible with the money we attract and spend. (Diana Paius,

Bethany Foundation)

For us, CSR is like a base-word that has different meanings to different people. This is why we use

the term “community involvement” instead of CSR. At a moral level, a company should be aligned

with what is happening in the community in which it operates. It should be aware that the situation is

different in Romania as opposed to Bangladesh or any other place in the world. The involvement in

community means that with the resources it owns, a company takes a step forward to contribute to

development, regardless if it addresses one or two beneficiaries, or the entire community. But

overall, a company is responsible if this step forward towards community involvement is not a

compensation for damage done elsewhere, for example because of polluting. (Simona Serban, Cluj

Community Foundation)

The definition of SR for SMEs used in this study is based on ISO26000 and UN interpretations:

Responsible Entrepreneurship,

In compliance with law and applicable international norms,

Which seeks to increase positive contribution for all relevant stakeholders while minimizing

negative impact,

Through voluntary initiatives going beyond legislative and contractual requirements,

Which are proactive and take place regularly, rather than on an ad-hoc basis.



3. Methodology of the paper

In the framework of this research project the understanding and application of CSR/SR in Romania, with

particular focus on SMEs, has been investigated in 8 biggest cities in Romania in selected key

organizations from all areas of society: public authorities, multinational companies, Romanian companies,

SMEs, NGOs, federations and unions, professional associations and networks. See Appendix 1 for a list

of participating organizations and the Interview Guide.

The selection of organizations to be analyzed was conducted in a way to ensure geographic spread and a

cross section of opinions from diverse backgrounds and experiences.

The analysis aims to bring forward a comprehensive picture of current situation of CSR/SR in Romania.

It is hoped that a good balance between different actors and regions was achieved.

Approach to research

People construct the ‘meaning and significance of their realities’2. They tend to explain and categorize

events, filtering everything through their own personal framework of beliefs and values. There is no

‘universal truth’ out there, ready to be studied. Reality is subjective and there are multiple points of view

on the same subject that can be understood by exploring the perceptions of all participating actors.

The author is aware that the personal interpretation and filtering of facts of the respondents, on their

experience and knowledge related to CSR/SR, influenced the results of the study.

The author is also aware of the fact that her background, opinions and beliefs influenced the results of the

study. Reality is not something objective, independent of the researcher, but rather, it is her role to capture

the meanings people place on their actions and decisions, in their own terms, and interpret these behaviors

rather than explain.

Research methodology

The research focuses on the compilation of two methodologies. First, quantitative secondary information

already available to the public was gathered from a diverse range of sources (European studies,

international and national reports, CSR/SR national networks, organizations’ websites and CSR/SR

reports, news sites and other online media sources). The investigation took place by conducting a

thorough desk research.

Second, in line with the aim of the study, this data was complemented by a qualitative analysis with the

purpose of bringing forward the understanding and meaning that respondents place on specific factors and

processes that shape their CSR /SR activity, and ultimately to connect these meanings to the social world

around them. The fact that the answers expected to be obtained are related to the ‘how´ in organizations’

experiences, more precisely how activities and decisions and made, recorded, learned from and given

meaning, is more of an argument for choosing to also pursue a qualitative approach.

2 Walker (1985)



The choice proves all the more suitable as CSR/SR is a relatively new and little explored area of research,

particularly in Romania, and, hence, rich and holistic descriptions of practices are sought, which can offer

a possibility of understanding latent, non-obvious issues the researcher was not aware of at the beginning

of the study.

The main goal is to understand how organizations understand the topic of CSR/SR, how they apply and

make sense of their experiences. It is hoped that new insights will emerge on the engagement of SMEs in

social responsibility. The research aim thus provides the basis for an exploratory research.

Information was gathered during September – October 2011 at national level.

Qualitative research method

In addition to the desk research, the study examined in detail the understanding and practices of ......

organizations with prior and diverse experience running or collaborating on CSR/SR activities and

projects for more than a year, preferably two.

The organizations were selected following the desk research, from the personal network of the researcher

and from recommendations. The issue of ‘representativeness’ is not a concern, as this paper is a

discovery-oriented approach aiming to develop new insights, which can inform future confirmatory

research.

Social programs or community programs of NGOs or other local groups, though highly regarded, if not

part of a CSR/SR program or partnership, did not make the purpose of this study.

To the extent possible, we sought to involve organizations which designed their own activities and

projects.

A case study approach based on in-depth semi-structured interviews and observations was used.

Respondents were either the managers of the organizations or CSR/SR coordinators and were considered

well informed to participate and provide useful data.

The purpose of the interviews was to obtain information on the understanding and experience on CSR/SR

and influencing factors, and how that might impact the level of engagement in CSR/SR, the strategies

and approaches, as well as best practice and the inherent learning outcomes that might accrue from

successes and failures.

Data analysis

As a first step, an analysis of CSR/SR approaches was performed following the desk research. Main

categories and themes were identified, based on different actors of society and their roles in the field.

Issues related to social responsibility in SMEs were also sought.

Within-case analysis was performed for the interviews in order to obtain a better understanding of the

‘hows’, ‘whats’, ‘where’, and ‘whys’ of various CSR/SR approaches. These are presented in highlighted

boxes throughout Chapter 6.



Following the analysis of the transcripts, predominant concepts and themes were revealed, grouped into

categories and organized into topics. This facilitated the identification of recurring topics throughout all

of the interviews, which lessened the analysis of each case.

Case studies and examples used throughout the paper were described in detail with relevant quotations to

reveal the respondent’s actual words and allow the reader to perceive the thoughts and the context of the

respondent and to immerse into the situation. The interpretation of data is based on the transcript, with

reference to identified literature.

All the findings were compared and contrasted with the help of tools recommended by Miles and

Huberman (1994).

Validity and reliability

Although this study presents a high validity regarding the interpretation of the findings, it comes with a

significant disadvantage: a lack of standardization and researcher bias, which have an impact on the

perception on reliability3.

The validity of the findings is supported by the use of multiple sources of evidence to look at the same

phenomenon. In some case studies information concerning the organizations’ experience on SCR/SR was

also obtained from independent websites, networks and third party reports. In some cases, information on

the same CSR/SR program was collected from more than one party involved. In two of the case studies,

the participating organizations provided the researcher with supporting documentation to confirm the

statements made during the interview. Answers concerning the engagement of SMEs in social

responsibility activities were sought from all participating organizations, based on their experience, direct

or indirect involvement in CSR/SR initiatives/projects.

Reliability issues were sought to be addressed by making the process as transparent as possible,

describing each step of the research.

3 Noke (2006)



4. CSR/SR timeline and related international initiatives

Since the upcoming of the CSR/SR debate a range of supra-national actors has started to engage in this

area by either providing framework structures (e.g. definitions or strategies) or (direct) support to

enterprises and/or organizations intending to introduce socially responsible activities.

A brief overview on some of the relevant actors at European and international level is given below, as

well as some of their initiatives, with a particular focus on initiatives relevant for SMEs.

1976 The OECD adopted Guidelines for Multinational Enterprises which provide

voluntary principles and standards for responsible business conduct in a variety of

areas including employment and industrial relations, human rights, environment,

information, disclosure, combating bribery, consumer interests, science and

technology, competition and taxation.

Latest update to the Guidelines was adopted in 2011.

1977

International Labor Organization adopted the Tripartite Declaration of Principles

concerning Multinational Enterprises and Social Policy (MNE Declaration).

The principles laid down in this universal instrument offer guidelines to MNEs,

governments, and employers’ and workers’ organizations in such areas as

employment, training, conditions of work and life, and industrial relations.

1993

The origins of the EU's approach to CSR/SR stem from the Commission's White

Paper in 1993 on growth and employment.

1993

The European Environment and Sustainable Development Advisory Councils

(EEAC) are a unique collaboration between the advisory councils for environmental

policy and sustainable development. It was set up by European governments with the

purpose of providing independent, scientifically based consultancy regarding the

environmental and sustainable development.

Today, over 26 councils from 16 European countries are members of the network.

1995

The establishment of the World Business Council, an international business network

set up with the aim to develop closer co-operation between businesses, government

and other organizations concerned with the environment and sustainable

development.



1995

1996

In the following years, the concept of Corporate Social Responsibility (CSR) has

gained in importance in the EU policy debate, manifested, for example, by the

establishment of a joint declaration against social exclusion (1995) or the launch of

the European Business Network for Social Cohesion (EBNSC) in 1996 (to become

CSR Europe in 2000).

CSR Europe is a business network today consisting of more than 70 leading

multinational corporations as direct members and of further 3,000 companies through

31 National Partner Organizations. It aims to help companies achieve profitability,

sustainable growth and human progress by placing corporate social responsibility in

the mainstream of business practice.

1997

The OECD Anti-Bribery Convention is launched which establishes legally binding

standards to criminalize bribery of foreign public officials in international business

transactions, providing related measures that make this effective. It is the first and

only international tool aimed at the ‘supply side’ of the bribery transaction.

2000

In March 2000, the Presidency Conclusions of the European Council made for the

first time “a special appeal to companies’ corporate sense of social responsibility”.

2000

In June, the United Nations launched the initiative “Global Compact”, a Code of

Conduct including ten principles in the areas of human rights, labor, the environment

and anti-corruption as well as a voluntary international corporate citizenship network.

2001

The European Commission published a Green Paper on “Promoting a European

Framework for Corporate Social Responsibility” on the basis of which a

Communication was proposed in 2002, focusing on increasing knowledge about the

positive impact of CSR/SR on business and societies in Europe and abroad, in

particular in developing countries and on the development of the exchange of

experience and Good Practice on CSR/SR between enterprises.

2001

Launch of the first sustainable development strategy based on the idea that in the long

run economic growth, social inclusion and environmental protection go hand in hand.

2001

Regulation of the European Parliament and of the Council of 19 March 2001

allowing voluntary participation by organizations in a Community eco-management

and audit scheme (EMAS). Over 4500 participating organizations to date, out of

which 23% are micro, 33% small, 25% medium and 19% large.



2002 The establishment of a Multi-Stakeholder Forum, chaired by the European

Commission and consisting of organizations of employers, business networks, trade

unions and civil society representatives, aimed to support CSR/SR practices, promote

innovation, convergence, transparency and tools through improving knowledge and

exploring possibilities for establishing common guiding principles at EU level.

2003

European Council Resolution of 6 February 2003 on Corporate Social Responsibility

(2003/C 39/02)

2004 - 2005

A special focus on CSR among SMEs is set by the Directorate General Enterprise and

Industry with the implementation of a Pan-European Awareness Raising Campaign

on CSR for SMEs including a wide range of events throughout Europe as well as the

establishment of an informative website. Project was in cooperation with

EUROCHAMBRES (European Association of Chambers of Commerce) and

UEAPME (European Association of Craft, Small and Medium-sized Enterprise).

2005

DG Enterprise realized the “Responsible Entrepreneurship” project which identified

case studies from SMEs across Europe as well as the “Mainstreaming CSR among

SMEs” launched in September.

2005

Integrated Guidelines for Growth and jobs (2005 – 2008) – Communication from the

European Council aligned with the re-launch of the Lisbon treaty and with a focus on

growth and employment in Europe.

European Council recommended to member states to encourage enterprises towards

engaging in social responsibility.

2006

The EU Strategy for Sustainable Development takes into account the situation of an

enlarged EU and pinpoints the importance of creating sustainable communities able

to efficiently manage and use resources and to tap the ecological and social

innovation potential of the economy, ensuring prosperity, environmental protection

and social cohesion to improve present and future quality of life.

2006

Due to the variety of international activities in the field of CSR/SR, also the European

Commission aims to stronger consider the international perspective in their work to

promote CSR/SR globally, in the context of international benchmarking and with a

view to maximizing the contribution of enterprises to the achievement of the UN

Millennium Development Goals (European Commission, COM 2006 136 final).



Thus, in March, the Commission published a new communication on CSR/SR

entitled „Implementing the Partnership for Growth and Jobs: Making Europe a Pole

of Excellence on CSR”. One of the main elements emerging is the creation of a

European Alliance for CSR - a political umbrella for CSR initiatives by large

companies, SMEs and their stakeholders.

The Alliance is supported by the Union of Industrial and Employers’ Confederations

of Europe (UNICE), the European Association of Craft, Small and Medium-sized

Enterprises (UEAPME) and CSR Europe.

The Commission further emphasizes the promotion of CSR/SR in eight areas:

awareness raising and best practice exchange, support of multi-stakeholder initiatives,

cooperation with Member States, consumer information and transparency, research,

education, SMEs, as well as considering the international dimension of CSR/SR.

2007

DG Enterprise and Industry issued the European Responsible Entrepreneurship

Bulletin (first issue: 1st quarter 2007) which is a quarterly e-newsletter aiming to

exchange information and ideas about responsible entrepreneurship, corporate social

responsibility and small and medium-sized enterprises.

2009

The Commission adopted the 2009 Review of EU Sustainable Development Strategy.

The document underlines that in recent years the EU has mainstreamed sustainable

development into a broad range of its policies. In particular, the EU has taken the lead

in the fight against climate change and the promotion of a low-carbon economy.

2009

The Treaty of Lisbon came into force, providing the EU with the legal framework

and tools necessary to meet future challenges and to respond to citizens' demands.

The Treaty concerns: a more democratic and transparent Europe; a more efficient

Europe; a Europe of rights and values, freedom, solidarity and security; Europe as an

actor on the global stage.

2010

The launch of the international standard ISO 26000 "Social Responsibility" addressed

to all types of organizations, from large MNEs, to SMEs, public authorities, unions

and NGOs.

2011

On the 25th October, the European Commission launched its new Communication on

CSR for the period 2011-2014. The renewed Communication aims to strengthen EU

global leadership on CSR/SR by implementing an intensive Agenda for Action with

around 30 proposals for CSR/SR commitments.



It is important to note that the above is not an exhaustive enumeration of initiatives to date. As such, other

important initiatives in the field of CSR/SR refer to different international certificates like the ISO 14000

and 9000 series (for environmental and quality management systems); international fair trade or

environmental initiatives such as the Fairtrade Labeling Organizations International; the Global Reporting

Initiative (GRI) which is a multi-stakeholder process and independent institution whose mission is to

develop and disseminate globally applicable Sustainability Reporting Guidelines; tools such as the

Europe 2020 strategy or the Universal Declaration of Human Rights.

Also, various other networks were set up in Europe. Such are the European Business Ethics Network

(EBEN), Social Venture Network (SVN) Europe or the European Social Investment Forum (Eurosif), all

with the purpose of promoting business ethics, and social and environmental engagement.

Case box 1: CSR/SR approaches in Europe

The focus and objectives of European-wide initiatives are different. First of all, there exists a rich portfolio of

initiatives targeting at raising awareness on CSR/SR. As an example, the European Business Campaign on

Corporate Social Responsibility was launched in November 2000 by a group of international business

organizations led by CSR Europe. The campaign aimed to make the benefits of CSR/SR visible to the wider

business world and, therefore, organized events and projects.

Additionally, the campaign has launched a range of concrete tools and activities to spread CSR/SR to a wider

audience. For example, the “SME Key”, a step-by-step guide to help SMEs to evaluate their current socially

responsible practices and integrate them into their core activities and strategies, or the “SRI Compass”, an

online toolkit that provides stakeholders with an overview on the socially responsible investment (SRI) market

and guides to green and ethical funds in Europe.

To recognize excellence in the promotion of entrepreneurship in European regions the European Commission

has, for example, launched the European Enterprise Awards in 2006. The award categories include a

“Responsible Entrepreneurship Award” for initiatives that promote Corporate Social Responsibility and

sustainable business practices in the social and/or environmental domain. Another kind of awarding is the

listing of the 100 best workplaces in Europe which is done by Great Place to Work® Institute Europe.

From a more “intermediary” viewpoint the CAESAR project (CSR RELAYS in Chambers of Commerce) of

the EUROCHAMBRES may be mentioned, focusing on supporting employers’ representatives in their work

on disseminating CSR/SR among European enterprises. In the framework of this project (being financially

supported by the “Mainstreaming CSR among SMEs” program of the DG Enterprise and Industry)

EUROCHAMBRES have organized a training program for 50 representatives from chambers of commerce

and industry across Europe. This training is followed by company visits of the trained advisers as well as the

development of practical guidelines and a website to make it available to other chambers.

Another project in the framework of this program is conducted by the UEAPME. The project “Responsible

Entrepreneurship in SMEs” aims to develop tools and activities to support intermediary business

organizations at assisting their member SMEs in the improvement of competitiveness through actions of

responsible entrepreneurship.

A variety of CSR/SR management tools were developed to support the implementation of CSR/SR in the

enterprises. For example, Codes of Conduct have been signed by the social partners at European level in the

textile, clothing, woodworking, footwear, commerce and private security sectors with a specific focus to

promote organizations’ environmentally friendly behavior.

Different fair trade initiatives and labels have been developed at European level (e.g. by the European Fair

Trade Association (EFTA) or the Network of European World Shops (NEWS).

Source: KMU Forschung Austria (2007)



5. Overview of CSR/SR approaches in Romania

A multitude of different actors is engaged in the field of CSR/SR in Romania. This is due to the fact that

it covers a diverse area of activities leading to a shared responsibility of the government, the private sector

and society.

A schematic summary of key actors and their strategies presented in the next sections can be found

below:

Figure 1 – Key actors and strategies in the field of CSR/SR

Source: Austrian Intitute for SME Research

In Romania the concept of corporate social responsibility originates in the 1990s when many NGOs

(particularly with humanitarian business objectives) were founded with the assistance of international

public or private institutions.

This was followed during the 2000s, as preparation for EU integration, by major reforms which

influenced the involvement of large and small companies in CSR/SR activities in terms of restructuring

their technologies for environmentally friendly production or the adoption of social measures for

employees or the society. Due to increasing extensive legislation in this area, there is constant

competition concerning technologies used that must ensure the protection of the environment and of

employees and promote sustainable development.

The private sector’s implementation of responsible practices began to be stronger after EU integration and

was mainly led by the engagement of multinational companies who transferred their organizational

culture and practices from headquarters at a local level and, later on, also fueled by the opportunity to

access EU funds.

In addition to best practice and knowledge transfer in the country, another type of responsible company

(and also “responsible industries” at a national level) emerged subsequent to EU integration – the

company whose core business objective itself is “responsible”. These types of companies are making a

business case of activities that benefit the environment and/or the communities and their “responsibility”

results indirectly from the products and services they provide. Most relevant examples in Romania refer

to the renewable energy and waste management industries, rural or eco-tourism and the

commercialization of ecological or organic products. For the purpose of the paper, we will continue to



focus on the integration of responsible practices within core organizational policies and practices,

regardless of business objective.

Responsible corporate behavior was first evaluated in Romania based on commercial and corporate image

and reputation considerations, rather than a stakeholders’ interest and sustainability approach. Recent

years have seen an increase in the implementation of the latter approach and responsible practices are

increasingly being associated with long term company success, directly connected to community

development, environmental performance and supply chain relations and practices.

As in any other country, there are different levels of awareness and practical implementation of CSR/SR

into business reality.

In Romania, the field of CSR/SR is still at its early stages of development. While MNEs and large

Romanian organizations have gradually developed a culture of responsible conduct, in many cases

CSR/SR is still associated with philanthropy and focused on donations, sponsorships and public relations.

The CSR/SR instruments most frequently considered are: corporate codes of conduct, social investments,

audit and social and ecological reporting.4 Only few companies adopted a strategic approach, integrating

CSR/SR into core business practices, informing company decisions and activities. The concept itself

seems not too well known by SMEs, although the respective practices appear to be well implemented and

numerous.

Making CSR/SR part of the way business is done makes it resilient to market changes and economic

difficulties and ensures constant responsible business behavior. As long as CSR/SR is adjacent to

business, a separate function or activity (i.e. philanthropy) it is subject to external and internal constraints

and pressures.

Following the economic crisis, many actors in the field of CSR have disappeared. Multinationals are

what is visible at the moment. […] In 2008, community involvement was becoming a ‘bon ton’ activity

– many of the companies reaching a particular stage in their development were doing it. Once the

economic crisis hit, they disappeared from the stage. Secondly, the companies that remained active in

the ‘responsibility game’ reduced their community investment budgets with over 60-70%. Yet another

visible trend for those that continued to engage in responsible practices and programs was a greater

synergy with core business objective.

(D. Dehelean, ResponsabilitateSociala.ro)

Areas most frequently covered by CSR/SR initiatives are children welfare, education, art, religion,

environment and sport. CSR/SR initiatives do not stop only at community investment, but address supply

chain responsibility, customer services and satisfaction, employee welfare as well. Depending on the

communities, some of the causes, such as children welfare and education, at-risk social group services

and religion are much more frequently reported to other community initiatives.5

An exploratory research conducted in 2006 on 205 Romanian companies, large organizations and SMEs,

revealed that external pressure (NGOs, media, government), increased reputation and popularity of the

topic are the main motivations to implement CSR/SR into the organization.6

4 Iamandi (2011) 5 L. Dittel, M. Bilova and K. Simkova (2007) 6 A. Stancu and V. Olteanu (2008)



Table 1 - Sample description of research participants No of employees Percentage Turnover (EUR) Percentage

Below 9 20,59% Below 50 000 16,83%

10-49 24,51% 50 001 – 500 000 26,24%

50-249 21,08% 500 001 – 5 mil 18,81%

249-1000 20,10% 5 mil – 10 mil 7,92%

Above 1000 13,73% Above 10 mil 30,20%

Total Total 100,00% Source: A. Stancu and V. Olteanu (2008)

Figure 2 – Motivations for CSR/SR implementation

Source: A. Stancu and V. Olteanu (2008)

In Romania, until 2008, a strong motivator ‘to do CSR’ was the possibility to earn customer trust.

Many of the companies focused on brand and consumption. Consequently, CSR was seen as an

added value meant to increase brand value. After this, when things dramatically deteriorated with

regards to consumption, a ‘price war’ began. […] The exceptions to this were the banking and

energy industries, because during 2009 these were under strong public pressure. Current

[multinationals] are influenced by headquarter pressure on Romanian branches and by changes

taking place at European level. (Interviewee)

Stancu and Olteanu (2008) also revealed that in most cases the general manager is also responsible for

managing CSR/SR activities, followed by the marketing and PR departments. Further, it outlined that

only 2% of companies seemed to have a specific department and that in approximately 28% of cases

CSR/SR related responsibilities are not included in the job description of any employee.7

7 A. Stancu and V. Olteanu (2008)



Central, local and regional public authorities are often insufficiently involved in promoting the concept of

CSR/SR for the benefit of communities and in creating a supportive framework and favorable conditions

to encourage organizations to engage in responsible practices. Public authorities’ efforts in CSR/SR

campaigns are still not strong. Despite this, in the context of globalization, Romanian organizations are

still recommended and need to adopt a responsible conduct to be able to compete in the market.

A “National Strategy for the Promotion of CSR” was launched in 2011, highlighting priorities, objectives

and main directions for implementation.

Table 2 - SWOT Analysis regarding CSR/SR development in Romania

Strengths Weaknesses

Interest of society towards CSR/SR and the relative

novelty of the concept in the public sphere

Involvement of multinationals and some of the

large Romanian companies in CSR/SR

Continuous increase in the number of CSR/SR

initiatives and best practice in the field at a national

level

Increasing consumer interest for products/services

of socially responsible companies

Insufficient knowledge on the concept of CSR/SR at

society level

Absence of extensive studies, research and

sociological evaluations on the degree of

understanding and application of CSR/SR in Romania

Weak understanding and involvement of organizations

and SMEs in CSR/SR initiatives

Weak application of socially responsible investments

and acquisitions

Superficial organizational involvement in CSR/SR

activities; causes of social problems are not addressed

Reduced levels of understanding and insufficient

application of consumer rights

Corruption has direct effects on business environment

and its capacity to apply CSR/SR practices

Insufficient capacity of organizations/stakeholders to

represent themselves and express their own interests

Insufficient development of business culture based on

moral values

Opportunities Threats

Benefits for companies, communities, society,

environment etc. of a strategic approach to doing

business, that incorporates CSR/SR

Importance attached to CSR/SR at a European and

international levels

Development opportunities and competitive

advantages for Romanian SMEs on European/

international markets

Opportunities for learning and adapting best

practices and lessons learned from the experiences

of more developed countries

Increase in the importance of reputation of

companies and of the environmental policies in

consumer choices

Financing opportunities for initiatives with

CSR/SR components offered by the EU

Positive public attitude concerning the involvement

of companies in the community/ society

More protected environment and diminished

negative impacts of human activity

Absence of coherent public policies to promote

CSR/SR

Absence of a coherent and consistent legislative

environment

Deficiencies in applying legislation

Delays concerning acceptable standards in areas

adjacent to CSR/SR (i.e. environment) compared to

other EU member states

The risk of exclusion/ blocking of access of Romanian

companies on various markets

Insufficient support and involvement of public

authorities in promoting and applying CSR/SR

Lack of budgetary funds to promote the application of

CSR/SR

Source: National Strategy to Promote Social Responsibility 2011 – 2016



Although significant progress has been made since EU accession in integrating responsible practices

within core company operations, there are significant challenges that need to be addressed by all key

actors, such as:

raising awareness on the meaning of CSR/SR and the holistic approach entailed by the

implementation of responsible practices;

raising awareness on the need and benefits of strategically incorporating responsible practices

within business objectives and operations to ensure sustainable success;

increasing the transparency, monitoring and evaluation of the impact of CSR/SR initiatives on all

stakeholders involved/impacted;

In the following sections, a systematic overview is provided on the most important categories of different

actors as well as their CSR/SR initiatives and their approaches to encourage development in the field.

The overview represents a set of illustrative examples rather than a comprehensive list of all involved

entities or all initiatives implemented.

5.1. Government

The Government is responsible for creating an environment that encourages the application of the concept

of CSR/SR, as the Government is a significant factor influencing economic development and the

sustainable development of communities and society. Since joining the EU, Romania began the process of

harmonization of law and regulations, which is still ongoing. Significant improvements in legislation

were made with regards to environment, health and safety of employees, skills development, social

inclusion and anticorruption.

Legislative environment. Among others, the following are related to the field of CSR/SR:

In Romania, environmental legislation is more extensive since negotiations for EU integration

have started. Main legislation refers to climate change, pollution control, air quality, noise

prevention, waste management, soil, dangerous substances, nature protection (biodiversity and

genetically modified organisms), water management, forests. (See References section for further

information.) Incentives are given to stimulate environmental protection to companies investing

in renewable energy sources to support the creation of “green jobs” or to people who set up

alternative energy sources (i.e. solar panels, heat pumps) for their homes to replace traditional

energy sources (Green House Program)8;

Extensive legislation has also been increasingly implemented following EU integration to ensure

the health and safety of employees in the workplace, as well as their professional development,

reduce discrimination and promote equal opportunities. The Romanian Labor Code is the most

relevant document regulating the relationship employer - employee.

Access to employment and social inclusion of people with disabilities:

- Law 57 of 1992, updated, stating that any employer with over 50 employees must ensure that

specific percentage comprises people with disabilities. Tax deductions and financial benefits

8: http://www.mmediu.ro/casa_verde.htm



are granted for employing people with disabilities and adapting the working environment to

their needs.

On volunteering:

- Law on volunteering no 195 of 2001, updated, regulates the promotion and facilitation of

engagement of citizens in volunteering activities organized by public or private entities;

- Government decision 1317 of 27 October 2005 supporting volunteering activities in the field

of home care for the elderly;

- Oder 439 of 21 May 2002 on approval of environmental volunteering activities.

On civil protection:

- Law 481 of 8 November 2004;

- Decision no 1579 of 8 December 2005 referring to voluntary personnel for voluntary

emergency services;

- Order 160 of 23 February 2007 regulating the planning, organizations, implementation of

activities to prevent emergency situations by voluntary and private emergency services;

- Decision 160 of 14 February 2007 on conditions and usage of uniforms, equipment and

specific signaling of emergency personnel for emergency services, private or voluntary;

- Order 718 of June 2005 on organization chart and facilities of emergency voluntary services.

On transparency and anticorruption:

- Law no 544 of 2001 on free access to public information refers to the ways in which citizens

can demand from public institutions and authorities information of public interest;

- Law no 52 of 2003 on transparency of decision making in public administrations gives

citizens the possibility to make suggestions and actively participate in decisions.

On associations and foundations: Law 246 of 18 July 2005 for the approval of Government Order

26 of 2000

Financial incentives. In Romania, both companies and citizens benefit from tax deductions for

sponsorships made in specific conditions. According to Law 32 of 19 May 1994, updated (Law on

Sponsorships), companies can redirect up 0.3% from turnover of their annual taxes for sponsorships and

community investments, but not more than 20% from the profit tax. Physical persons can also redirect 2%

of their annual taxes towards social causes, in accordance with Government Order 26/2000 concerning

associations and foundations, as detailed in the Fiscal Code 84(2), modified by Government Order

138/2004.

Awareness raising. It wasn’t until recently (2011), with the issuance of the National CSR Strategy, that

the government recognized the importance of raising awareness and supporting the development of the

CSR/SR field in Romania, by identifying gaps and setting objectives aligned with EU strategy.

Nevertheless, since EU accession and with EU funding support, awareness raising initiatives, research

studies, seminars, conferences and websites have been initiated and developed by government institutions

and authorities in one or more of the specific topics addressed under the CSR/SR umbrella. Examples

comprise initiatives to prevent or reduce pollution, promote equal opportunities for men and women and

non-discrimination in the work place, promote road safety, promote the social inclusion of people with

disabilities, reduce bribes and corruption in public institutions and authorities.

Initiatives in areas of concern and related to CSR/SR are still few by numbers and government institutions

and authorities tend to be more of a secondary partner in projects and campaigns, rather than the main

initiator.



Specific initiatives to promote responsible business and the integration of CSR/SR practices in business

strategy and operations are still needed. Among these, we identified:

a need to reinforce business transparency

a need to encourage responsible investments

a need for public infrastructure for the implementation of the CSR National Strategy and for

cooperative approaches across ministries

a need to reinforce organizations to publish/ report on their social performance and involvement

(i.e. employees, communities), similar to environmental reporting enforcement

a need to develop a best practice national data base

a need for public grants for CSR/SR activities and projects, especially for SMEs

5.2. Employers and employees representatives

The role of employers and employees representatives in advancing the implementation of responsible

business practices is an important one. By their very nature, these types of organizations are in the

forefront of engaging companies, enterprises, unions and other actors through both aggregate approaches

(such as the Romanian Chamber of Commerce) and individually tailored approaches for specific

industries (such as the Romanian Federation of Cement Unions).

As part of the present research, several initiatives advanced by employers and employees representatives

in the field of CSR/SR have been identified. While the majority of these seemed to focus on a particular

component of the CSR/SR spectrum, such as employees’ health and safety, employee skills development

or environmental efficiencies, few have also been identified as focusing on promoting and encouraging

the integration of CSR/SR into business operations.

The Romanian Chamber of Commerce is one key actor implementing such initiatives, promoting the

overall concept of CSR/SR and activity related initiatives, both at a national level, as well as at local

levels, through its regional offices. Most projects identified have been implemented with EU funds. A

selection is presented in Table 3.

Table 3 - Romanian Chamber of Commerce and Industry (CCI) initiatives on CSR/SR

National initiatives addressing the concept of CSR/SR

Promoting CSR in SMEs

Implemented during 2006 – 2008, the project aimed to develop and promote research in the field of CSR

in order to improve the knowledge base of SMEs for developing initiatives in the field of CSR

Assistance bureaus for the promotion of social responsibility of enterprises

Implemented during 2009 – 2011, the project aimed to develop the required capacity in regional offices of

the CCI at a county level (42) to enable them to form a national network of assistance offices with the

purpose of promoting the social responsibility of enterprises in Romania. The project was addressed to the

business environment, the civil society and other relevant actors.



National initiatives addressing a component of CSR/SR

Women on board

Implemented during 2006 – 2008, the project aimed to increase the level of participation of women in

economic activities.

Break gender stereotypes, give talent a chance

Implemented during 2007 – 2008, the initiative was launched by the European Commission and

implemented in Romania by CCI Romania. It came in support of private companies, especially SMEs, to

raise awareness on the benefits of eliminating gender stereotypes in the labor market, to improve

competitiveness.

Regional initiatives addressing the concept of CSR

During 2009 – 2011, CCI Bucharest, as the beneficiary, implemented the initiative PRO.CON Promoting

the concept of social responsibility of enterprises, a project aimed at training personnel in professional

associations and chambers of commerce to promote the concept of social responsibility within the

Romanian business environment and the wider society.

During 2010, CCI Constanta implemented the project Bussole CSR, a platform and instrument to support

enterprises and entrepreneurs to familiarize themselves with the concept of Corporate Social

Responsibility by creating a network of enterprises, facilitating experience sharing and promoting SMEs

best practice.

Regional initiatives addressing a component of CSR/SR

CCI Bucharest implemented projects such as:

EPOC – Energy for a cleaner city

Tex-EASTile: sustainable innovation for textile in South East Europe within the South East

Europe Transnational Cooperation Program"

CRC-ECP: Regional consultancy and training services center for developing an entrepreneurial

culture in the field of eco-innovative technologies and good practices for energy and the

environment

EMAS information center for Bucharest region

Innovative training for increasing the knowledge base of the European polymer industry in

relation to REACH (REACH is the European Community Regulation on chemicals and their safe

use.)

Social partners and the civil society in the context of supporting employment and social

inclusion in the Bucharest – Ilfov region

EcoEmerge – Developing emergent ecological markets

In 2007, CCI Constanta implemented the project "ECO-AMBALAJ" to prevent and reduce the

environmental impact of packaging and packaging waste.

Sources: http://www.ccir.ro/; http://procon.ccib.ro/procon/web/guest/home; http://www.boussolecsr.eu/ro/index.



Unlike the Chambers of Commerce, whose interest and involvement in CSR/SR and related topics has

increased significantly in recent years, professional associations are less aware of their role and potential

impact on promoting responsible business practices and developing an overall responsible business

environment9. Though scarce data is available, a couple of projects currently being implemented have

been identified.

The project Active and involved partner is currently being implemented by the General Union of

Romanian Manufacturers (UGIR) with its partners, with the purpose of training 800 people in the lobby

and advocacy field to represent legitimate interest groups at national level and to succeed in transforming

social dialogue into an efficient practice10

. UGIR is also partner in the project Investors in People, a

transnational partnership to increase the interest of employers in developing human resources and their

social responsibility through trainings, consultancy and sharing European best practices of 8 regional

centers.

The project CementNet – Promoting the social responsibility of enterprises in the cement industry is

currently being implemented by the Romanian Federation of Cement Unions with the purpose of training

social partners and civil society organizations to promote and implement CSR activities, stimulate social

dialogue on the concept and benefits of CSR in the cement industry, promote best practice knowledge

transfer of CSR in the cement industry and encourage the sustainable development of “cement

communities” by engaging local stakeholders.11

5.3. Specific CSR/SR bodies and organizations

There are several initiatives of networks, forums, blogs and websites on CSR/SR and sustainable

development in Romania, many of which developed in recent years. Their role in raising awareness,

providing tools, promoting and maintaining dialogue in the field, as well as communicating good and bad

practices, is very important as they are at the meeting point between civil society, public and private

organizations. At the moment, the online environment is the most important source of information in the

field. A selection of initiatives is presented below.

ResponsabilitateSociala.ro12

is the first online network in Romania that supports companies and CSR/SR

professionals in defining and developing CSR/SR, promotes CSR/SR and Good Practices at all levels of

society and provides companies with useful information and relevant tools. It was set up in 2006 and

comprises 40 companies today and 125 Romanian case studies, resources, analyses based on international

researches and reports, articles by national and international CSR/SR experts, and interviews.

CSR Romania13

has developed a similar specific web site on CSR/SR and delivers daily news and

information to the public with the purpose of popularizing the concept of “ethical management” and

CSR/SR more specifically, in order to increase the competitiveness of companies and enterprises. This is

realized by promoting the CSR/SR concept, as well as responsible business practices (e.g. via analyses

and research, articles, interviews, conferences, seminars or newsletters etc.). CSR Romania has recently

become an affiliate of CSR Europe (November 2011).

9 Analiza tendintelor si bunelor practici in materie de RSI la nivel european si national, report as part of the project “PRO.CON

Promoting the concept of social responsibility of enterprises”, 2009 -2011 (http://procon.ccib.ro) 10 Project website http://implicat.info/ 11 Project website http://cementnet.ro/ 12 http://www.responsabilitatesociala.ro/ 13 www.csr-romania.ro



Specific websites, blogs and forums have been developed in the last couple of years as part of more

complex projects. One such example is Responsabilitate-Sociala.org14

, a website developed as part of the

project “The Social Responsibility of Companies aimed at developing the environment and local

communities”, implemented during 2009 – 2010. The website provides news and a section with few

resources. Another example is ActionamResponsabil.ro15

, a network developed as part of the project

“Acting responsibly! – CSR Social Network” implemented during 2010 – 2013 with the aim of

developing a national network of promoters to advance knowledge and experience in the field of CSR/SR.

It provides news, resources, events, statistics and campaigns. Eight regional information and assistance

centers have been set up to support interested companies and organizations and several workshops have

been organized for all development regions.

StiriONG16

is the most important database and information platform concerning the civil society. It was

developed by the Foundation for the Development of the Civil Society as part of the project “Civil

Society Catalogue 2008” with the purpose of facilitating social partnerships between the civil society, the

business sector, public institutions and citizens by providing information, news about projects and events,

about public and private financing opportunities, and by organizing courses and trainings to build

capacity. The portal hosts the most complete and up to date database of Romanian NGOs (associations,

foundations, unions and other similar structures) and issues one of the most known newsletters in the

field, since 1998.

In recent years, other dedicated organizations have emerged, such as the Center for Corporate

Citizenship Romania17

, a small non-governmental consultancy center providing national and

international trainings and courses in CSR/SR and related topics aimed at business representatives, civil

society, academia and government, with the purpose of raising awareness and building capacity.

In Romania there are specific events and awards dedicated to CSR/SR or one of its components. Among

the most recent, the following events were identified: European CSR Lessons18

, a two days conference

aimed to bring European best practices to Romania and support knowledge sharing; Sustainable

Partnerships and Good Practices in Social Responsibility19

a series of 8 workshops on CSR/SR, social

dialogue, partnerships, indicators and best practices aimed at all relevant actors of society; Biz Days20

a

five days event comprising conferences, workshops, presentations and case studies that dedicated an

entire day to CSR/SR; Green Biz Forum21

an event dedicated to raising awareness on green trends and

CSR/SR, campaigns and networking.

Among the dedicated awards we can list: Awards for a Cleaner Environment22

rewarding CSR/SR

projects of initiatives aimed at protecting the environment through waste management and recycling of

wastes and electric equipments; Civil Society Gala23

promoting and rewarding the Romanian civil society

sector; People for People Gala24

recognizing and rewarding community involvement projects; Public

Participation Awards25

rewarding citizens, organizations and public authorities who implement change or

adopt a public decision in the benefit of the community which they represent. Other types of events and

14 http://www.responsabilitate-sociala.org 15 http://www.actionamresponsabil.ro/ 16 http://www.stiriong.ro/ 17 http://cccro.org 18 http://csrlessons.eu/ 19 http://www.actionamresponsabil.ro/ 20 http://www.zilelebiz.ro/ 21 http://www.bizforum.ro/greenbiz5/ 22 http://www.hotnews.ro/gala_premiilor_pentru_un_mediu_curat 23 http://www.galasocietatiicivile.ro 24 http://gala.arcromania.ro/ 25 http://www.ce-re.ro/g3p/



awards have dedicated specific days/sections to CSR/SR and CSR/SR related topics. Such examples

include: Romanian PR Award26

comprising the award categories “Social Responsibility and Stakeholder

Engagement Dialogue” and “Non-governmental organizations. Civil Society”.

5.4. Education institutions

Another aspect which reveals the level of growth of the field of CSR/SR in Romania refers to the

development of educational initiatives. These are not only conferences or seminars on the topic, but also

study programs (graduate or postgraduate), research projects, continuous learning and professional

courses on managing socially responsible businesses and projects. Education and research institutions are

those most suitable to contribute to a better understanding of CSR/SR at a national level and to the

development of knowledge and abilities of professionals, supplying the information and working tools,

encouraging debates, disseminating results and ensuring increasing legitimacy and professionalization of

the field.27

The desk research revealed that, though increasing importance is paid in recent years to education,

research and training on CSR/SR, education and research institutions have not fully exploited their role in

the advancement and promotion of CSR/SR in Romania. The topics of CSR/SR or sustainable

development do not form the objective of standalone study programs. Specific components of the topics

(such as environment protection, quality management, business ethics of employment relations) are most

often included in the curriculum of other higher education programs, such as management,

communication or marketing studies, or can sometimes constitute programs themselves (environment

protection studies). Even in the latter case, more attention is paid to the technical aspects of the topics

than to business’ impact on the environment or business’ contribution to sustainable development through

responsible business conduct. This finding confirms the findings of previous research.28

The situation is characteristic for research initiatives as well- though many research studies addressing

one of the components of CSR/SR have been conducted (i.e. environment research, employee relations

research, equality and non-discrimination research), few CSR/SR have been conducted in recent years at a

national level and those were under management, communications of marketing departments. Two types

of research have been identified to date:

Complex research programs which span few years and involve a series of (collective) activities

and initiatives (among which debates, workshops etc. One such example is the study concerning

the transformation of corporate social responsibility policies as levers for achieving sustainable

development in Romania, conducted by the Faculty for Public Relations and Communication,

National School for Political and Administrative Studies, during 2007 – 2010. The study makes

use of secondary data (analysis of legislation and national environment, as well as field research

among companies, decision makers and beneficiaries) with the purpose of producing a

comprehensive analysis of CSR/SR in the context of public interest, company competitiveness

and sustainable development29

.

Specific individual researches conducted over a short period of time, usually few months.

Examples of such studies identified are:

26 http://www.praward.ro/ 27 Analiza tendintelor si bunelor practici in materie de RSI la nivel european si national, report as part of the project “PRO.CON

Promoting the concept of social responsibility of enterprises”, 2009 -2011 (http://procon.ccib.ro) 28 H. Csafor (2008) 29 http://www.comunicare.ro/rsc/index.html



- Veronica Ioana Ilies (Lumperdean), “Public Relations and Corporate Social Responsibility:

Theory and Social Action”, PhD Research Study, Babes-Balyai University, Cluj-Napoca,

Faculty of Sociology and Social Assistance, 2011

- Catalina Silvia (Crisan) Mitra, “Contribution of Social Entrepreneurship and Corporate

Social Responsibility in solving social problems of community”, PhD Research Study,

Babes-Balyai University, Cluj-Napoca, Faculty of Economic Science and Business

Management, 2011

- Irina-Eugenia Iamandi, “Corporate Social Responsibilty and multinational companies’

performance. Romania”, PhD research study, Academy of Economic Studies, 2008

In 2011, the first academic research network in the field of CSR was launched – ROnet SRR (The

Romanian Network for Social Responsibility Research), within the Faculty of Marketing, Academy of

Economic Studies of Bucharest. The purpose of ROnet SRR is to facilitate collaboration towards

developing support materials for a dedicated curriculum and to implement research projects, workshops

and trainings, as well as to disseminate information and support the development of the field at both

national and international levels30

.

30 http://www.mk.ase.ro/csr/



6. Responsible practices in Romanian SMEs

From a small local market shop to a multinational enterprise, every business entity has its stakeholders

and its impacts on society, both positive and negative. But when CSR is discussed in policy circles, the

media and wider civil society, the focus tends to be on the largest companies. Small- and medium-sized

enterprises (SMEs) are often overlooked. Although they play an important role in the economy of a

country, most tools, frameworks and justifications for responsible business activity tend to cater for large

companies.

Case box 2: The role of SMEs in development

For developing countries, integration into the global economy through economic

liberalization, deregulation, and democratization is seen as the best way to overcome poverty

and inequality. Crucial to this process is the development of a vibrant private sector, in which

SMEs play a central part. SMEs make up over 90 per cent of businesses worldwide and

account for between 50 and 60 per cent of employment. However, their importance in the

development process goes beyond their strength in number. There is a rich body of research

on the development contribution of small enterprises. While not entirely without some

controversial areas, there would appear to be widespread consensus on the following points:

SMEs (partly because of the industrial sub-sectors and product groups covered by

them) tend to employ more labour-intensive production processes than large

enterprises. Accordingly, they contribute significantly to the provision of productive

employment opportunities, the generation of income and ultimately, the reduction of

poverty. It is through the promotion of small enterprises that individual countries

and the international community at large can make progress towards reaching the

global target of halving poverty levels by the year 2015.

There is ample empirical evidence that countries with a high share of small

industrial enterprises have succeeded in making the income distribution (both

regionally and functionally) more equitable. This in turn is a key contribution to

ensuring long-term social stability by reducing ex-post redistributional pressure and

by reducing economic disparities between urban and rural areas.

SMEs are key to the transition of agriculture-led to industrial economies as they

provide simple opportunities for processing activities which can generate sustainable

livelihoods. In this context, the predominant role of women is of particular

importance.

SMEs are a seedbed for entrepreneurship development, innovation and risk taking

behaviour and provide the foundation for long-term growth dynamics and the

transition towards larger enterprises.

SMEs support the building up of systemic productive capacities. They help to

absorb productive resources at all levels of the economy and contribute to the

creation of resilient economic systems in which small and large firms are

interlinked.

Such linkages are of increasing importance also for the attraction of foreign

investment. Investing transnational corporations seek reliable domestic suppliers for

their supply chains. There is thus a premium on the existence of domestic supporting

industries in the competition for foreign investors.

SMEs, as amply demonstrated in information and communication technologies, are

a significant source of innovation, often producing goods in niche markets in a

highly flexible and customized manner.

Source: UNIDO (2002)



Though large organizations have been the drivers of CSR/SR in Romania, it doesn’t mean that CSR/SR is

not practiced by SMEs. A continuous focus on large organizations risks fueling the assumption that, while

large multinationals and large Romanian companies have started to gradually develop a culture of social

responsibility, the concept of CSR/SR is less familiar to SMEs and that their engagement in CSR/SR

initiatives or processes is weak.

Our organization has experience collaborating with SMEs. They usually support causes with funding

and being smaller than multinationals, the process is more direct, flexible and easier. Some even

seem more open to the idea of getting involved. Their support usually consists of ad-hoc

sponsorships for causes that they don’t support by themselves, but which attract more than one

donor. SMEs contribute even with in-kind donations, services or volunteers because often it seems

easier. (Simona Serban, Cluj Community Foundation)

We’ve had collaborations with small local businesses that wanted to develop a relation in the field of

ecology and environmental protection, from kindergartens to private schools developing educational

programs, to a publishing house developing an ecology book, to small shops or producers (i.e.

bicycles or bio products) aiming to support common causes and develop their brand. Collaborations

with SMEs are very diverse. They each aim for something and we meet half way, building a win-win

initiative, either short or long term. (Doru Mitrana, Mai Mult Verde Association)

At a local level we collaborated with SMEs, though they seem more difficult to engage because they

don’t have the same image policy and CSR strategy as a large organization with dedicated

departments. With SMEs it’s the director who is open to discuss or not. We’ve had good

collaborations with Moldova Mall and Felicia Carrefour who supported and promoted our social

campaigns to collect food and clothing for underprivileged children. Another example is our

communication agency which provides pro bono expertise for our campaigns. There are diverse

mechanisms for collaborating with SMEs and according to their interests and possibilities, we can

work together. (Diana Paius, Bethany Foundation)

Recent studies at European level have started to pay close attention to SME’s way of doing business and

impact on society. The premise is that SMEs are a major economic force, upon which large numbers of

people in developing countries depend for their livelihoods. SMEs are the biggest employers, and the

joint impact of their operation is considerable.31

Another unfounded assumption is that SMEs tend to organize themselves based primarily on economic

imperatives rather than societal considerations, given their resource constraints. However, this seems very

much influenced by two general perceptions: that SMEs are ‘little big companies’ and CSR/SR should be

scaled down to ‘fit’ their size and that of CSR/SR representing only voluntary social or environmental

programs, differentiated from company core business.

I do believe SMEs have the resources to be responsible, but at a much smaller scale. What is

important though first of all is for them to understand the concept, the importance and to have the

will to engage. CSR is after all knowing how to ensure a connection between what you want to do,

what you need to do it and the people you address. It’s about understanding how to do things. And

one cannot copy when it comes to CSR. No matter what you do, it’s a field in which you cannot

copy what others are doing. Large and small companies need to understand the difference they

make and identify their own “ways”, according to their own strengths and capabilities, their own

budgets and human resources. In our community, there are two big organizations, Transgaz and

Romgaz, which constitute the economic engine of the city. But many smaller companies get

31 H. Csafor (2008)



involved in the community as well, to a different level, as they can. Examples I know of are Armax,

Dafora and Conmag. They are open and, as much as they were able, they took part in various

initiatives. (Elisabeta Ghidiu, Transgaz)

Many of the pioneering environmental practices that are now part of mainstream CSR/SR were pioneered

by small enterprises or community groups and were driven by strong values and ethics. One of the most

renowned examples is The Body Shop, begun in the UK as a small values-driven SME, which currently

comprises over 2500 shops worldwide, including six in Romania32

. Other examples of social and

environmental innovation in Romania are demonstrated in the organic farming industry, recycling and

recycled products or wind power.

There are two approaches to business. There is the classical approach in which the single most

important thing is profit. Most companies are built on this philosophy and they are not doing badly.

And there is a second approach which I personally felt is more suitable for my business. It’s a ‘green’

approach to doing business. Of course we have to ensure a profit to support our activity, but profit

alone is not the only thing that matters. The impact of business on the people we work with, the

influence on clients and suppliers, the influence on society, the manner in which we get involved in the

welfare of society, how to direct money towards social activities, how the community sees us – all

these are things that matter. (A. Dobre., PointMax Solutions)

The focus on SMEs’ SR is welcomed and overdue in Romania, as well as analyses of the different

dynamics, issues, pressures and drivers facing SMEs, their potential to implement strong responsible

businesses and the benefits that might follow.

6.1. Challenges and benefits

6.1.1. Business links between SMEs and large organizations

Increasingly large companies are being held responsible not just for their own operations but also for the

practices in other parts of their sphere of influence. Part of the reason for this is that large companies now

outsource much of their production processes. In response, large organizations are seeking more and more

to identify and mitigate negative social and environmental impacts in their supply chains, seeking

efficient technologies and best practices from suppliers and contractors. Translated, this means that

CSR/SR policies, principles and practices of large organizations both in Romania and abroad are

beginning to have direct and indirect influences on Romanian SMEs, bringing both benefits and new

requirements.

Large organizations engaging in responsible practices seem to increasingly source locally, where possible,

in order to improve community relations, increase business activity and contribute to local development,

leading to benefits for SMEs. Similarly, there is an increasing trend to pass on responsible principles and

practices throughout the supply chain by incorporating relevant social and environmental criteria in

procurement, outsourcing or contracting, leading to new demands and preconditions for doing business.

SR as a condition of business with large organizations: the challenge

Outsourcing products, processes or services translates in effect into a transfer of costs necessary for

improvements and certification down the supply chain, while continuing to gain the reputational benefits

32 Source and more information: http://www.thebodyshop.com/_en/_ww/services/aboutus_company.aspx



for these improvements. Through outsourcing to local suppliers, large organizations are pushing the costs

of compliance and monitoring down to their suppliers, most often SMEs already dealing with more

constraints. In this sense, the term “voluntary” associated with engaging in SR and alignment to best

practices can be misleading, as standard implementation seems to resemble more of a market entry

requirement or an economic “must” than a competitive reward/premium.

This type of business link can exclude SMEs from markets as the challenges mentioned seem to relate

mostly to affordability and applicability. The process of complying with standards can become a barrier

itself as SMEs are less likely to have formal systems for monitoring, measuring and recording impact and

might not have the capacity (financial and human resources) to deal with significant paper work. The

costs of complying can be prohibitive themselves. Often the costs of implementing a standard are the

same no matter the size of the organization. While large organizations can spread the costs throughout

their operations and benefit from economy of scale, SMEs are faced with smaller operations and lower

volumes.

Other difficulties in implementing responsible business in SMEs can relate to: getting employees

engaged; allocating time to building closer relations with communities or NGOs, business partners or

contractors; a lack of information and best practices concerning SMEs; measuring the intangible benefits.

When SR (i.e. certification) acts as an entry ticket to specific markets, such as for environmental

management systems or labor practices, and is not affordable for SMEs, it can become a burden and

infringe business, especially when SMEs are producing for a number of companies, each with their own

social and environmental criteria and requirements. Given the importance of SMEs to employment and

development, this poses a particular challenge in trying to improve the social and environmental

performance of large organizations, while ensuring a supportive environment for SMEs’ alignment,

without cost increases to the point of infringement. This means engagement in CSR/SR supports SMEs

development and does not undermine it, thus meeting its goal of improving the impact of business on

society33

.

SR as a condition of business with large organizations: the benefit

When large organizations provide support and advice to SMEs to adhere to specific standards, ensuring

that supply chain requirements do not unnecessarily discriminate against SMEs, the business link can

prove to be beneficial.

Support for responsible SME growth can be an important part of the CSR/SR commitment of large

organizations and improvements in social and environmental impact can go hand in hand with

improvements in quality and management34

. Investing in community development through support for

business development, such as access to markets, training, knowledge or technology transfer, can prove to

be one of the most significant strategies to contribute to meeting the UN Millennium Development Goals,

ensuring sustainable livelihoods.

These situations relate only to those SMEs directly or indirectly involved in markets in which such supply

chain mechanisms have been introduced or are being introduced.

6.1.2. Market trends: increasing demand for standards

The increase in the prominence of CSR/SR at a global level has led to an increase in the use and

implementation of standards and certifications predominantly among large organizations, driven by a

33 UNIDO (2002) 34 UNIDO (2002)



need to institutionalize a new area of business performance. Even though SMEs are less visible to the

public, less likely to attract the attention of NGOs and thus less interested in codes of best practice, they

are still impacted by the increasing demand for standards, even those which do not have business links

with large organizations. This is because more and more consumers increasingly seem to pay attention to

specific alignments with international codes of conduct or sector certification systems (i.e. with reference

to animal testing, Fair Trade and Organic certifications), regardless of organization size.

It appears that increasingly more as a condition of doing business than a voluntary activity, standards and

certifications are sought from all sorts of enterprises, large or small. And if large organizations may

benefit from scale economy, SMEs tend to work with tighter margins and may be less able to absorb

increases in costs associated with better labor or environmental conditions or standards. For some SMEs

SR can become a significant expense, even a barrier of entry that can undermine economic activity in

some markets. Costs for Romanian SMEs can be further increased by the difficulty to access technology

or environmentally friendly input materials, environmental infrastructure (such as waste treatment plants),

information and training on social and environmental management, and even because of the geographical

region of the operations. All these factors appear to be challenges for an SME that seeks to implement

responsible business practices and could imply that SMEs are less likely or able to implement standards

or certifications, unless sound economic judgment dictates. Especially when CSR/SR is becoming more

of an industry standard and does not lead to competitive premiums, as should be the case of voluntary

initiatives.

A recent UNRISD report showed that “Firms in developing countries, which produce for developed

country markets, have a somewhat ambivalent attitude toward codes of conduct. On the one hand,

where their customers require them to meet certain labor or environmental standards, they need to

comply in order to keep their markets. On the other hand, they are likely to perceive such measures as

increasing their costs, either directly or indirectly.”35

I would like to be able to introduce a monitoring and reporting mechanism in my company [SME],

even certification, which I think will soon be a must, but this depends on our ability to organize

ourselves and manage our activities differently, of allocating resources differently. I don’t think we

have the necessary resources to do this […] We have done many actions, discrete, but numerous, and

in addition to a procedure and a project management team, a PR person would also be necessary to

communicate what we do better. Projects can grow with the help of improved communication. New

partners can join, new clients. […] But our biggest challenge at the moment is financial resources

necessary to employ dedicated people, to allocate the necessary working space. And these people will

further work with suppliers. This is a commitment we cannot take before being certain of having the

necessary financial resources. (Interviewee)

As an SME we have our own responsibility – we recycle, we support initiatives. But being a small

company, we don’t have tools or a monitoring system, for example to measure our energy

consumption of emissions. Large companies, multinationals, have to and they use a diverse range of

tools to measure their investment in community, employee health and safety or environmental impact.

[…] For an SME it is also important to measure its impact according to internationally recognized

indicators and according to the ‘size’ of the impact and field of activity. (Interviewee)

The increase in the demand for standards and certifications in Romania, without benefiting from the

necessary infrastructure and support for small producers, has led to some SMEs cutting corners:

complying with standards on paper, but taking shortcuts in practice or falsely promoting their products as

35 R. Jenkins, UNRISD (2001)



socially and environmentally responsible, without having the required certification, label or the minimum

of information on the packaging.

I have seen ‘false’ CSR. It is hard, if not impossible, to be a company focused only on profit, for this to

be noticed in every activity or decision (human resources policy, sales policy etc.) and at the same

time to be one of the most visible actors in the field of responsible business, because of nicely

marketed activities. We all see these cases and in all honesty I think of them as nice bandages over

ugly scars. But I have also seen genuine cases, especially small family owned businesses which

approach the topic of profit and business responsibility in a totally different manner. I think this

happens because the people running these companies are more involved in the community in which

they operate. I think that real responsible business is conducted in medium enterprises. (Interviewee)

On the other hand, when benefiting from infrastructure and support, the increase in the demand for

standards and certifications can lead to market opportunities and business growth.

Case box 3: Romanian market for BIO products

Opportunity

„For the next 5 years, the Romanian market for BIO products has the greatest growth potential

in the (European) organic industry” (Amarjit Sahota, European Organics Monitor Consultant).

Challenges36

Romanian market for BIO products is generated by the presence of the products on the market

raising consumer interest. The growth of the market depends on informing and educating

consumers’ attitudes and life styles.

Among the biggest challenges for the ecological products market is that there are no processors

in Romania. Raw materials are being exported, products are made and packaged abroad and

come back in the country four times more expensive. This is because of the high costs of

industrial and packaging installations aligned with ecological agriculture standards.

Over 90% of BIO production goes to export.

Development support Agricultural producers have benefited of compensatory payments to cover losses during the

period of conversion from conventional to organic agriculture.

36 http://biosens.ro/



Among others, support has been given for:

inspection and certification costs, for land in the conversion period.

conversion of vine orchards and bee growth to ecological standards and processes.

purchasing equipments specific for ecological agriculture, for the construction and

modernization of practices to ecological Communautaire standards.

applied research (through the Competitive Grant Scheme)

Support has also been given from the European Commission, professional organizations and

Romanian Government for the promotion of ecological products.

6.1.3. “Business Case” benefits

SMEs are often forced to prioritize short-term profitability over longer-term strategic measures, and they

often have few managerial and financial resources to invest in long term measures, without external

support. Many of the investments that SR requires might not be taken into consideration by an SME that

is not confident it will still exist in the near future. As previously highlighted, SR requirements may even

be counterproductive, where their implementation threatens SME-based livelihoods.

Focusing on long-term incentives to promote SME engagement in SR might be of little use without

necessary attention to measures that create financial gains in the short-term too or that help to mitigate

SMEs’ vulnerability in the market. Linking social and environmental responsibility to financial success

and placing responsible principles and ethics at the core of everyday business decisions can lead to SR

being perceived less of an add-on that they don’t have time and resources for, and more of ‘the way we do

things’.

Among the business benefits that can accrue UNIDO37

lists:

operational cost savings through environmental efficiency measures (i.e. waste reduction, energy

efficiency etc.);

enhanced reputation through positive responses to stakeholder concerns (even when enterprises

are not nationally or internationally recognized brands, they can benefit from improved

relationships with local (potential) employees, suppliers, customers or local authorities);

increased ability to recruit and retain staff;

sharper anticipation and management of risk;

and improved capacity to learn and innovate (i.e. find new ways to work, develop new skills).

In addition, the following can be mentioned:

new business opportunities and access to new markets (i.e. new contracts, exports, new

consumers, for example through eco labels);

greater degree of customer satisfaction through improvements in quality38

ability to access specific types of funding;

and increased public exposure.

37 UNIDO (2002) 38 SMEs involvement in Social Responsibility projects, Association for the Implementation of Democracy, www.responsabilitate-

sociala.org



However all these business benefits differ across enterprises and industries according to specific

characteristics: enterprise size, location, products, industry, and/or service in question. For each firm the

business case needs to be carefully developed and relevant for the specific characteristics.

Similar to large organizations, the ways in which SR affects SMEs have the potential for creating positive

social, environmental but also importantly economic benefits that go beyond the SME itself, to include

wider local and national communities.

We’ve had experience with SMEs, not much, but we did. In 2003-2004 for example, we supported

Telezimex, a Romanian enterprise, to implement a salary donations program. They had 70

employees at the time and, monthly, for years, most of them donated to support underprivileged

children in their community. That constituted an example that other organizations followed, even

big ones. In our experience, if CSR is strategic and seen as part of the core business, it can be

implemented in such a way as to contribute to increased profits, improved organizational culture,

better relations with customers etc. It can lead to developing new products, partnerships with new

suppliers. I believe there is a connection between company success and responsible behavior, when

CSR is not just CSR, but becomes sustainable business. When a company is managed according to

specific responsibility principles, chances are the company can become a leader in its field. It is

not easy to implement a responsible business model, significant efforts are needed, but there are

Romanian companies aiming to do just that. Genuine efforts in this field are commendable. (Ioana

Szatmari, Asociatia de Relatii Comunitare)

6.2. Level and characteristics of responsible practices

Social responsibility should be an integrated part of SMEs’ way of doing business, stimulating growth,

without jeopardizing its ability to operate.

Motivations to engage or implement responsible practices or programs vary from altruism or personal

interest, to commercial acumen, competition or a combination thereof.

The overwhelming motivating factor for SMEs to engage in responsible practices does not seem to be

external pressure or the need to diminish/reduce an impact or risk, but an internal drive to ‘do the right

thing’, ‘put something back’ or show ‘entrepreneurial spirit’.

While not disconfirming the “business case” argument, the majority of SMEs seems to make use of the

moral and ethical arguments to describe why SR is important to them. Most seem to prefer calling SR

‘common sense’ or ‘the right thing to do’. Even when the business case argument is used and even in the

face of the current economic crisis, the departure point seems to continue to be the ethical argument. The

research revealed that it is because each owner-manager believes in the principles of responsible business

and because they have the ability to influence enterprise practices and transfer personal ethics into

enterprise activity, that SR has become central to some SMEs. The owner’s values seem to be essential

and a powerful driver of ethics and standards in the organization.

In the case of SMEs, there are for sure many owners or entrepreneurs who participate at various

activities, make donations, but I don’t believe we can talk about a strategic direction. It’s more of

an emotional involvement of the owner trying to help or improve his/her relations with a business

partner or a local authority. […] There is also a ‘hidden CSR’ in the case of SMEs with clients in

developed markets, like Germany or England. There are companies producing honey or bolts that



sell their products on markets more sensitive to ethical or environmental aspects. These SMEs must

obtain specific certifications which prove their ethics towards employees, their impact on the

environment etc. Many Romanian small producers have an SA 8000 certification. (D. Dehelean,

ResponsabilitateSociala.ro)

Forms and Types of CSR/SR

One of the existing approaches to classify SR initiatives refers to the motivation/objectives followed by

launching respective activities39

:

Compliance: managing business operations to create benefits for society in conformance with

legal standards

Best practices: managing business operations to create additional benefits to society due to the

motivation of the owner or the expectations of society

Innovation: developing new products or services that offer benefits to society as a specific part

of the customer value proposition

Voluntary support: voluntary contributions of money, time, products or services that are either

(a) acts of good citizenship that do not address elements of the competitive context, or (b)

contextual investments that strengthen the future competitiveness of the company

Another type of classification is based on the “target group” of SR activities, i.e. the beneficiaries of the

initiative.

Figure 3: Classification based on the “target group” of SR activities

It is argued that by nature SMEs are closer to and more dependent on their customers, employees,

neighbors and other key stakeholders than larger, more impersonal enterprises, and so need to be more

responsive to those stakeholders. For example, SMEs are likely to be more reliant on a handful of key

employees who are required to carry out a larger number of tasks, which means that preventing rapid

turnover of staff is a high priority, creating an incentive for responsible labor practices.

SMEs live in the community, with the community, are influenced by the welfare of the community and

in their turn influence the welfare of the community.

SMEs might be more reluctant to fire an employee when he/she has family health problems and might

allow 3, 4, 6 months to solve those problems. The cycle is different. (Interviewee)

39 KMU Forschung Austria (2007)



SR initiatives that focus on employees can deal with the improvement of working conditions, pay and

benefits or job creation. Others could address work/life balance, equal opportunities and diversity, job

satisfaction, training and staff development, health and safety and labor rights.

Case box 4: Caring for employees - PointMax Solutions

Set up in 2006, PointMax Solutions is an SME in the field of production and creation of

promotional products.

For few years it implemented a support system for employees, a financing fund for personal

needs. Employees needing a financial loan would borrow from the company fund, interest free,

agreeing with the accounting department upon reimbursement conditions (amount of the

installment, period of reimbursement).

The idea appeared naturally and was welcomed by employees, especially in mid national

economic crisis during which employees found it difficult for example to meet bank mortgage

payments when incurring a family health problem. The fund has generally been used for

consumption credits (vacuums, refrigerators, television sets).

Initiatives that address market demands and expectations can comprise improvements in the quality and

safety of products, innovation, fair pricing and advertising or timely payments of contractors or partners.

Case box 5: Meeting market expectations - Apidava SRL40

Begun in 1992 as a small family business with 2 employees and 50 bee hives, the enterprise

currently employs 35 and is on the Ministry of Agriculture and Rural Development list of

ecological producers.

Turnover

2006 2007 2008

7 million Ron 9 million Ron 13 million Ron

At the beginning, the entire honey was produced, packaged and labeled manually by family

members and personally delivered to few stores in some of the big cities of Romania. In 2001

they began to export while the boom of large supermarkets and hypermarkets in Romania

influenced the enterprise’s national growth as well and imposed new production and quality

demands, as per EU norms and regulations.

Among its products we can list natural honey (Roua Glorilor is the first Romanian honey

brand), ecological honey (Di Melio), therapeutic products made of honey and honey related

ingredients.

In 2005 the small Romanian enterprise partnered with Dutch investors Honey International B.V.

and Trichilia who invested 700.000 Euro in equipments necessary for business development.

The enterprise exports to Holland, Germany, Austria, England, Poland, Macedonia, France,

Italy, Sweden, Canada, USA, Japan and Singapore.

40 www.apidava.ro



Certifications

In 2002 Apidava implemented the Quality Management System ISO 9001 and in 2005 it

obtained the HACCP certification (Hazard analysis and critical control points). These

certifications are proof of implementation of food safety processes, based on prevention and

avoidance of risks that compromise food quality. The enterprise recertified based on the new

ISO 22000 for food safety.

The enterprise is among the few in Romania having a sanitary-veterinary authorization for intra-

communautaire commerce RO H2 EC, after having met EU requirements concerning the

processing and commercialization of products of animal origin. The specific label can be found

on its products.

SR initiatives of SMEs concerning the protection of the environment focus on an efficient use of

resources and the reduction of waste and pollution. They can make use of environmental management

systems, eco design tools, eco labels or cleaner production techniques and technologies.

Case box 6: Caring for customers and the community – Cortina BioProd SRL41

Cortina BioProd SRL is a poultry breeding farm set up in 1999 which raised bird for meat in a

conventional system. Through efforts and continued investments the SME transitioned to

ecological breeding practices, implementing a health and safety management system of birds.

The construction of the new farm began in 2002 as part of a World Bank project, and the first

ecological egg was produced in 2004. The investment comprised 1000sqm shed, 16 000sqm of

farm grazing land and 150 000 – 200 000 euro. Conventional systems would allow 30 000

poultry to be raised in that space, but the farm’s ecological practices allow 4000 poultry

producing 1 million ecological eggs per year.

At the moment, the enterprise is the first and largest ecological poultry breeding farm in

Romania, producing ecological certified eggs. Certification is verified by a Romanian company,

under a Swiss company’s supervision.

Turnover

2005 2006 2007

990 054 Ron 781 478 Ron 1 178 915 Ron

The main perceived aspect of SR by SMEs appears to be community involvement. Initiatives in this area

focus on supporting the education and health of underprivileged children or the elderly, humanitarian

actions and volunteering. The primary means of support appear to consist of sponsorships, in-kind

donations, providing free services or products and are addressed to NGOs, schools and hospitals.

41 www.bio-cortina.ro



Case box 7: Community orientation – PointMax Solutions

Since set up, PointMax Solutions has been involved in diverse social activities in support of

disadvantaged groups, especially children. Their involvement results from a desire ‘to do good’

and it is either based on long term tradition with specific causes or hearing about a specific cause

with which they relate and which that they can support.

For the past 4 years the firm has provided expertise and support for the NGO Hospice Casa

Sperantei for organizing and implementing events and occasionally sponsorships. The NGO

deals with providing care for children with serious palliative disease.

In 2010 it supported the activities of the Foundation Principesa Margareta with voluntary work,

for example by organizing a story telling evening for children. They have sent invitations to

their business partners to participate with in kind donations for children (toys and sweets) and

network of acquaintances which comprised national celebrities such as actors and TV presenters

(to read stories, draw and sign). Over 200 children with their parents participated at the event

which benefited of TV and media attention.

Twice a year they organize a collection of in kind donations for orphan children. At Valea

Plopului orphanage there are 300 children in the care of a priest. The SME communicated with

business partners, collaborators and friends to gather the in kind donations comprising clothing,

toys, medicine and computers. Two trucks with goods were sent during 2010. The second

donation was also accompanied by a team of 4 pediatric doctors from Bucharest who performed

medical evaluations on all the children, made each of them personal medical charts and issued

recommendations.

Though responsible business practices are considered to be the ones that consider all aspects of operations

and are situated at the intersection of all four fields, it is most likely that SMEs address one or more of

them, but rarely all.



7. Conclusions and recommendations for further study

In recent years, Romanian companies made progress in developing and implementing decisions and

activities addressing environmental and/or social problems, in an attempt to minimize the externalities of

their economic activities. Despite an increase in strategic CSR/SR integrated into core business practices,

the majority or organizations, large or small, seem to continue to base their CSR/SR on sponsoring and

ad-hoc charity projects. While the role of sponsorships, donations and ad-hoc initiatives is unquestionably

beneficial for addressing social and environmental problems and for the development of communities, as

the European Commission clearly states, the responsibility of organizations lies in the voluntary

integration of CSR/SR principles and practices into core business activities and into the relations with

stakeholders, leading to their proactive and regular application. Strategic integration of CSR/SR into core

business makes responsible behavior less vulnerable to external factors (i.e. cost cutting during economic

crisis) thereby becoming part of business as usual.

SMEs’ CSR/SR decisions and activities also seem based on ad-hoc decisions, not formally integrated into

overall business strategy. Nevertheless, the case studies presented have shown that there are also SMEs

that have made a business case out of responsible behavior and have experienced a positive economic

outcome of their CSR/SR activities. Further research is needed into the relationship between Romanian

SMEs’ enhanced competitiveness and engaging in responsible business.

Information gathered and interviews conducted as part of this study revealed that CSR/SR tools and

standards are still not broadly used by organizations operating in Romania to plan, monitor and evaluate

their CSR/SR efforts and the impact of their initiatives. One potential reason for this, in addition for an

identified need for more data, could be a lack of awareness of the benefits of CSR/SR upon core business

activities and business performance. Education and research institutions can significantly contribute to

covering significant gaps in information by supplying quantitative and qualitative data necessary for the

planning of decisions and activities, as well as on the benefits and impact of implementing CSR/SR upon

company profitability and competitiveness. Particular attention can be paid to the environment in which

SMEs operate, their specific motivations and potential benefits that could incur.

In addition, there is a need for robust quantitative and qualitative information concerning CSR/SR and

SMEs that can contribute to:

Developing an understanding on the applicability of current CSR/SR standards, models and tools

for integrating responsible behavior into SMEs core business (i.e. structures and processes that

worked well for multinationals and their effectiveness for SMEs, if scaled down to ‚fit the size’).

Developing an understanding of the impact of current CSR/SR requirements (i.e. supply chain

requirements), standards, models and tools on SMEs and their accessibility to SMEs (i.e. do

requirements or standards lead to protectionism or restrictions, such as acting as barriers for

specific markets?).

Developing an understanding of SMEs environment and drivers to engage in responsible

business, as well as of favoring and hindering factors influencing Romanian SMEs’ decision

making with regards to engaging in responsible business (i.e. Are Romanian SMEs negatively

impacted by the Sponsorship Law, as highlighted by participants in the study?).

Developing an understanding of the needs for support to develop SMEs’ capacity/capitals to

engage in and promote their responsible business (i.e. training, infrastructure, knowledge transfer)

and to develop specific programs, policies, mechanisms and tools (i.e. mechanisms that allow

SMEs’ coordination and collaboration on CSR/SR issues), as well as of the role that existing

structures and institutions can play in developing this support by integrating social and



environmental issues into their agendas (i.e. the role of employee and employer representatives,

public institutions, companies etc.).

Developing an understanding on what Romanian SMEs are doing already in terms of responsible

business practice, how they are contributing to their communities, their environmental efficiency

measures, their engagement with stakeholders etc.; promoting the business responsibility and best

practices already existent in many SMEs.

Besides the scientific research, the education system has an important role in ensuring proper educational

programs on CSR/SR at high school and university levels and integrating sustainability and responsibility

issues into more subjects of the curricula.

Increasing the engagement in responsible business behavior in Romania implies among others a common

effort of all interested stakeholders, better dialogue between all actors and a robust understanding of the

business environment, business impact, the causes of societal problems and the role of each actor in

reducing barriers and threats while strengthening opportunities and drivers regarding the development of

CSR. Examples could include:

understanding the roles in ensuring that adequate infrastructure is in place for businesses to

engage in responsible practices (i.e. that robust information is made available on the causes of

social problems and on the impact of decisions and activities, products and services; legislative

environment is supportive etc.)

We have some challenges for example at the level where we need to understand the needs. We don’t

always have data we can use, a research to understand needs. Little if any robust and recent data or

research exists for example on alcohol consumption in Romania and its impact. If we want such

data, we need to develop it ourselves, to conduct the necessary studies and obtain relevant and

reliable actual information. We also have not identified any NGO working in this field, alcohol

consumption. There are some NGOs dealing with alcohol dependency, but not for preventing

excessive use. We often find ourselves collaborating with organizations having a scope of work

“adjacent” to our needs. (Diana Klusch, Ursus Breweries)

When we attempt to engage SMEs, we face a challenge concerning the lack of knowledge with

regards to CSR. Most are not open to the idea because they don’t understand it. Knowledge seems to

be the missing link between collaboration with SMEs. Big companies already have the knowledge,

the people, the budget and the structure for it. SMEs need capacity building concerning most of these

aspects. Especially when I fully believe that SMEs here in Craiova have the capacity to become

active members of the community. (Viorel Ofiterescu, Habitat pentru Umanitate)

understanding the roles in promoting cooperative approaches in addressing common issues (i.e.

between the private and public sector in identifying the causes and reducing road accidents)

understanding the roles in stimulating reporting on social and environmental performance

understanding the roles in supporting and promoting best practices, in developing campaigns and

raising awareness on CSR/SR.



References

‘Analiza tendintelor si bunelor practici in materie de RSI la nivel european si national’, report as part of

the project “PRO.CON Promoting the concept of social responsibility of enterprises”, 2009 -2011

(http://procon.ccib.ro)

Csafor H.(2008) ‚Challenges of CSR in some recent accesion countries of the EU: Hungary, Poland,

Slovakia, Romania’, CSRPaper 48.2008

Dittel L., Bilova M. and Simkova K. (2007) ‘The way it works:CSR in the Carpathian Region’

European Commission ‘Green paper - Promoting a European framework for corporate social

responsibility’, COM/2001/0366 final

European Commission, COM 2006 136 final, ‘Implementing the Partnership for Growth and Jobs:

Making Europe a Pole of Excellence on CSR’

European Commission (2009) ‘Review of EU Sustainable Development Strategy’

European Commission (2011) Communication on CSR for the period 2011-2014

European Council Resolution of 6 February 2003 on Corporate Social Responsibility (2003/C 39/02)

Iamandi, Irina-Eugenia (2008) “Corporate Social Responsibilty and multinational companies’

performance. Romania”, PhD research study, Academy of Economic Studies

Iamandi, Irina Eugenia (2011) ‘Application of Corporate Social Responsibility Models in Romania in the

Context of the Post-Accession to the European Union’, Economic Transdisciplinarity Cognition Vol. XIV,

Issue 1/2011 27-35

Ilies (Lumperdean) V.I., “Public Relations and Corporate Social Responsibility: Theory and Social

Action”, PhD Research Study, Babes-Balyai University, Cluj-Napoca, Faculty of Sociology and Social

Assistance, 2011

ISO 26 000 International Standard of Social Responsibility (2010)

Jenkins R. (2001) ‘Corporate Codes of Conduct: Self-Regulation in a Global Economy’, United Nations

Research Institute for Social Development, Technology, Business and Society Programme Paper No 2,

April 2001

KMU Forschung Austria (2007) ‘CSR and Competitiveness: European SMEs’ Good Practice,

Consolidated European Report’

Lisbon Treaty (2009)

Miles, M.B. and Huberman, A.M. (1994) ‘Qualitative data analysis: an expanded sourcebook’, 2nd

edition, Sage: Thousands Oaks



Mitra C.S., “Contribution of Social Entrepreneurship and Corporate Social Responsibility in solving

social problems of community”, PhD Research Study, Babes-Balyai University, Cluj-Napoca, Faculty of

Economic Science and Business Management, 2011

National Strategy to Promote Social Responsibility 2011 – 2016

Noke, H. (2006) “The creation of a new product development capability in UK manufacturing small and

medium-sized firms’, PhD Thesis, Cranfield University

Stancu A. and Olteanu V. (2008) ‘Corporate Social Responsibility in Romania from a EU Perspective’

UNIDO (2002) ‘Corporate Social Responsibility: Implications for Small and Medium Enterprises in

Developing Countries’

Walker, R. (1985) ‘Applied qualitative research’, Gower publishing: Aldershot, UK

National laws and regulations:

Romanian Labor Code

Fiscal Code 84(2)

Law 57 of 1992

Law 32 of 19 May 1994

Law 246 of 18 July 2005 for the approval of Government Order 26 of 2000

Law 195 of 2001

Law no 544 of 2001

Oder 439 of 21 May 2002

Law no 52 of 2003

Law 481 of 8 November 2004;

Government Order 138/2004.

Order 718 of June 2005

Government decision 1317 of 27 October 2005

Decision no 1579 of 8 December 2005

Decision 160 of 14 February 2007

Order 160 of 23 February 2007



Websites:

www.actionamresponsabil.ro

www.apidava.ro

www.bio-cortina.ro

biosens.ro

www.bizforum.ro/greenbiz5

www.boussolecsr.eu/ro/index

cementnet.ro

www.ce-re.ro/g3p

cccro.org

www.ccir.ro

www.comunicare.ro/rsc/index.html

csrlessons.eu

www.csr-romania.ro

www.hotnews.ro/gala_premiilor_pentru_un_mediu_curat

implicat.info

www.iso.org

gala.arcromania.ro

www.galasocietatiicivile.ro

procon.ccib.ro/procon/web/guest/home;

www.mk.ase.ro/csr

www.mmediu.ro/casa_verde.htm

www.praward.ro

www.responsabilitatesociala.ro

www.responsabilitate-sociala.org

www.stiriong.ro



www.thebodyshop.com/_en/_ww/services/aboutus_company.aspx

www.zilelebiz.ro

List of tables

Table 1 - Sample description of research participants (page 20)

Table 2 - SWOT Analysis regarding CSR/SR development in Romania (page 21)

Table 3 - Romanian Chamber of Commerce and Industry (CCI) initiatives on CSR/SR (page 24)

List of figures

Figure 1 – Key actors and strategies in the field of CSR/SR (page 18)

Figure 2 – Motivations for CSR/SR implementation (page 20)

Figure 3 – Classification based on the “target group” of SR activities (page 37)

List of case boxes

Case box 1: CSR/SR approaches in Europe (page 17)

Case box 2: The role of SMEs in development (page 30)

Case box 3: Romanian market for BIO products (page 34)

Case box 4: Caring for employees - PointMax Solutions (page 38)

Case box 5: Meeting market expectations - Apidava SRL (page 38)

Case box 6: Caring for customers and the community -Cortina BioProd SRL (page 39)

Case box 7: Community orientation – PointMax Solutions (page 40)

Documents

Corporate) Social Responsibility in Romania - UNDP Situatiei... · (Corporate) Social Responsibility in Romania Situation Analysis and Current Practices Review ... Cristiana Anca,