Russian CSR - no longer a contradiction in terms?

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As average Russians have seen steady improvements in their income for almost a decade, they have gotten a taste for luxury goods - you can see many in Moscow flaunting their Gucci and Prada, recently returned from a trip to Milan. But this is not the only thing their improved incomes are buying, at least according to a recent article in the Moscow News:

Being socially responsible is not simply an act of selfless generosity but can also be an important PR device for companies. [Russian] consumers are now choosing brands depending on how socially responsible the company is.

However, the Moscow News article doesn't cite any hard evidence that Russians are really being persuaded they should spend their hard-earned roubles on socially responsible products. Another factor seems to be at play.    

The real motivation of Russian companies to improve their corporate social responsibility profile may be their increasing internationalization. Ethical Corporation explains:

What appears to be the key driving force in corporate responsibility in Russia is the growing need to play by internatioanl rules as Russian companies begin to expand globally, and to seek listings on western stock exchanges...Russian firms considering listings in London or elsewhere are worried about a "Russia discount" that they might suffer from western investors concerned about their corporate governance performance. Neev [a spokesman of TNK-BP, an energy company] says the development of corporate responsibility in Russia "coincides with its development on the international scene."

The Ethical Corporation article cites some 40 Russian companies that reported on CSR as of early 2007. It would be useful to analyze these companies to see what the correlation is between internationalization and the adoption of a CSR platform. Perhaps, contrary to the assertions of some critics, globalization is not a "race to the bottom" in terms of business practices.


Ryan Hahn

Operations Officer

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