“Leaders of Corporate Charity” are growing in Russia
The winners of the competition and participants in the Leaders of Corporate Philanthropy rating by the Donors Forum association of grant-giving organizations in 2021 moved from charity to social investment, focusing on the UN Sustainable Development Goals and weaving social projects into companies’ strategies. This opinion was reached by the experts of the competition, having ranked the companies and assessed the level of their corporate charitable and social activities, as well as having considered more than 100 competition programs and projects. The competition experts interviewed by Kommersant talk about the formation of “corporate citizenship” among business structures, indicating that they responded in a timely manner to the new challenges of the time – many programs related directly or partially to the elimination of the consequences of the COVID-19 pandemic.
The Leaders of Corporate Charity project is supported by the Federation Council, the partners of the project are ANO National Priorities, Kommersant Publishing House and EY in Russia. The partners of the nominations of the project competition are the Ministry of Economy, the Ministry of Education and Science, the Ministry of Culture, the Council of the Eurasian Women’s Forum under the Federation Council, the Presidential Grants Fund, the UN in Russia, the RSPP, the Fund for Regional Social Programs “Our Future” with the support of SIBUR and the organization “Public Forum “Ecology”” .
Thus, companies that were potential participants in the rating were asked to formulate the goals and objectives of their charitable activities and social investments, indicate whether it takes into account the UN Sustainable Development Goals (for example, eradicating poverty, good health and well-being of the population, preserving ecosystems, reducing inequality, combating climate change). ) and the national development goals of Russia until 2030 (preservation of the population, health and well-being of people, a comfortable and safe environment for life, opportunities for self-realization of people, decent and efficient work, digital transformation). However, the organizers of the competition noted that if a company does not correlate its activities with the Sustainable Development Goals or national goals, it does not lose points.
Also, the project participants had to list how and where the policy and strategy of social and charitable activities were formulated, indicate all its directions and beneficiaries, describe how the charitable activities management system is built and how the company goes through the process of selecting projects for financing in this area. “And for us, the blocks on the interaction of the company with stakeholders at different stages of the implementation of their corporate charitable activities and social investments, as well as how the company itself evaluates the results of its activities, were extremely important for us,” notes Ms. Sarkisova. “We, as organizers, of course, want to so that there is more systemic activity related to the strategy and mission of the company, continuously developing, not dependent on the change of company management. I think this is what our project encourages companies to do.”
In general, in 2021, 66 companies participated in the Leaders in Corporate Charity project, 44 of which are participants in the rating. More than 100 applications were submitted for the nominations competition, of which 36 winners were selected by the partners of the nominations. According to the Donor Forum, based on data from 25 companies participating in the project, which disclosed the amount of their social investments (participation in the competition does not oblige), such investments in Russia increased from 57.3 billion rubles. in 2018 to 80.4 billion rubles. in 2020 for a comparable sample. But in 2021, 39 companies disclosed this data, and social investments and spending on charity for 2020 approached 105 billion rubles. According to Chief Executives for Corporate Purpose’s latest annual Giving in Numbers survey, 117 of the top 230 global companies surveyed saw their respective spending rise from $26 million in 2018 to $37 million in 2020, adjusted for inflation.
Consistency and clear results
In the rating, participating companies are divided into six categories: A+ (Leaders), A (Best Practice), B+ (Best Practice), B (Good Practice), C+ (Evolving Practice) ), C (“Emerging Practice”). Six companies entered the A+ category this year, while last year there were only two. Now this group includes Gazprom Neft, Metalloinvest, MTS, Norilsk Nickel, Rusal and SIBUR.
“This year, the results of the rating, namely the significantly increased number of companies in the A + category, show that companies continue and intensify the trend of transition to a meaningful, systematic and efficient conduct of activities in the social sphere,” believes the contest expert, CEO of the Strategic Communications Agency ” Ekaterina Vereshchagina. – The transition from charity to the format of social investment is also obvious. The main difference between social investments and charity is the focus on a long-term social effect, and not just on helping those who need it in a difficult situation.” According to her, it is the concept of “social investment” that more accurately characterizes what big business is doing now: “And this is very cool, because the business approach allows you to use resources more rationally, combine efforts and achieve really significant results.”
The number of companies that entered category A has not changed since last year – there are still 12 of them: Coca-Cola in Russia, Amway, AFK Sistema, Philip Morris International affiliates, EVRAZ, United Metallurgical Company, Rostelecom, Sakhalin Energy Investment Company Ltd, Severstal, SUEK, TMK and Exxon Neftegaz Limited. Category B+ includes 14 companies, including JTI Russia, Polymetal, X5 Group, VTB Bank and VimpelCom, while only one company, Janssen Russia (a division of Johnson & Johnson), was in category B.
As Ekaterina Vereshchagina noted, the same trends were observed in the competition of social projects as in the rating: a focus on consistency and embedding such projects into the company’s strategy. She also drew attention to the fact that this year many companies have demonstrated new approaches to evaluating their charitable and social programs. “We saw the results not only in the number of events held and the number of participants covered, which characterizes the process more, but directly in the assessment of the final results for the target audience and for the regions as a whole,” she noted. “The companies indicated what changes their project entailed, what innovations brought in how it affected the lives of those people who are the stakeholders of the companies. For example, we saw the exact number of new jobs created as a result of the implementation of supported projects, and this is a very significant result for the regions.” She added that social investments are implemented on a long-term basis: “And for society, this is very important, because changes in the social sphere do not happen quickly.”
The expert of the competition, the head of the project office “Strategies and Practices of Sustainable Development”, senior lecturer at Plekhanov Russian University of Economics Svetlana Gerasimova also believes that the topic of companies’ assessment of their activities this year was very strong: “This is a feature of this particular year. Companies are using international methodology and are starting to think about external expertise of their projects, which, of course, is very gratifying. It is possible to look at these projects from the outside. And the competition itself helps them to see what they are doing, to look at their activities in a complex way. “As for approaches to charitable activities, there is clearly a systematic approach, a connection with the business development strategy and the theme of sustainable development,” she says. “This is already a complex cascaded system, like a nesting doll: business strategy—sustainable development—social investment. Leading companies accurately understand the results and effects of a systematic approach to corporate charity, demonstrate long-term complex recognizable projects with long-term significant results.”
Transformation according to the principles of sustainable development
The winner in the nomination “Best Program Promoting the Professionalization of the Non-Profit Sector” was Norilsk Nickel with its NPO Accelerator project. Alfa-Bank with its Alfa-Chance scholarship program and RusHydro with the Energy of Development student project contest took first place in the nomination “The Best Program in the Field of Science and Education Support”. In the Best Program Supporting Culture and Art nomination, OMK took first place with the City of Amazing People project. In the nomination “The best corporate social investment program in the territories in the context of sustainable development and business strategy”, Metalloinvest won with a comprehensive program to support the regions of presence during the pandemic and MTS with the project “Tourist audio guides from MTS”. The best program to promote gender equality was the project of Polymetal International – the association “Women in the Extractive Industry of Russia”. And the best program promoting sustainable development through grant competitions was Metalloinvest, the founder of the grant competition TOGETHER! with my city. SUEK’s “We Choose Health” program became the best program contributing to the implementation of the UN Sustainable Development Goals.
Marina Vashukova, executive director of the national network of the UN Global Compact in Russia, believes that the projects of companies are showing more and more clearly that the transformation of their strategies is based on the principles of sustainable development: “Now this is a framework for business, and it will not go anywhere.” According to the expert, more than half of the applications went beyond charity: “Here you can talk and argue for a long time what corporate charity is, but what the leading companies are now offering is most often such corporate citizenship, and their projects in the field of sustainable development show how the company thinks about itself in this area, how it connects its projects with the mission. Promotional, episodic projects are becoming less and less.
Svetlana Gerasimova notices that the quality of the projects submitted to the rating is higher every year: in the group she evaluated, there were six participants with high marks, and earlier there was traditionally only one leader. She also noted the influx of participants from industries that were not previously interested in the competition: “Retail has been added, with a meaningful systematic approach to sustainable development and social investment, logistics and ports, the number of FMCG companies and banks has increased.”
Experts note that a new element of the programs of almost all companies has become assistance to the healthcare system in the fight against the consequences of the COVID-19 pandemic. Last year, a separate nomination was allocated for such projects, but this year there was none – such projects were evaluated in all nominations. “Healthcare is an area that business tries to touch as little as possible,” explained Ekaterina Vereshchagina. “This is a complex, costly story that not every company can do. But the pandemic has shown that this area is critical, and many companies that used to be wary of the topic have realized that they are ready to consider healthcare as one of the areas of their social investments. And this is a major change.” As Marina Vashukova noted, speaking about the situation with the pandemic and the reaction of business companies to it, “it is one thing to quickly respond to some daily and urgent needs, and another to realize that the situation affects the entire environmental and social balance”: “ And the business as a whole, if we talk about the trend, is deeply aware of its role in this balance.”