Social Investments of Russian Businesses Abroad
The article discusses the current state of socially oriented investments of Russian business abroad, in order to assess the role of corporate social responsibility (CSR) in the activities of companies. Academic literature encompasses various explanations driving enterprises to assume social responsibility. Such pluralism as well as difficulties in identifying of long-term consequences of social investments makes it hard to assess their effectiveness. Nevertheless, CSR has become the generally accepted standard of business behavior, and in some cases, the mandatory requirement of national regulators. In Russian practice, this recognition is often less pronounced than abroad. As a result, Russian enterprises are also less inclined to implement CSR projects than Western companies. A similar trend is also characteristic of foreign businesses operating in Russia. However, when entering foreign markets, Russian corporations adopt international rules of the game. In particular, when they operate in developing countries, they often imitate practices of foreign competitors, investing in social infrastructure in areas of their activities, in formation of local human capital, and in compliance with high environmental standards. Moreover, CSR activities carried out by Russian companies abroad demonstrate sectoral specificity. Real sector enterprises focus on the development of physical infrastructure and human capital, while representatives of the financial sector implement their social responsibility through supporting and lending projects that meet a range of environmental and social international standards. In conclusion, the author draws a number of recommendations to Russian businesses regarding adoption of CSR in operations in foreign markets. First, in the context of high competition from foreign players, CSR should be integrated in a systematic manner by Russian businesses and implemented as part of a overall business strategy in foreign countries. Second, in order to increase direct commercial benefits for business in the framework of socially-oriented projects, it seems necessary to reconcile social and environmental goals with financial ones. Third, in the context of expanding the scale of a ‘lean’ economy and growing environmental responsibility, investing in CSR projects should remain a priority for companies.
corporate social responsibility; social investments; Russian business; investment climate; business risks; return on investments; foreign projects.
Authors: Yury Zaytsev
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