Insights and pioneering in corporate social responsibility

Ten years ago, corporate social responsibility (CSR) was a term largely unheard-of in Uzbekistan and Azerbaijan, but that is changing thanks to two John Smith Trust Fellows

Malika Sharipova and Gunel Isakova are two trailblazers promoting and implementing socially and environmentally responsible corporate practices across Central Asia and Azerbaijan.

For Malika, the motivation to pursue a career in CSR stemmed from early childhood experiences. As a child, Malika dreamed of filling up the Aral Sea, which was once the fourth largest lake in the world but had largely dried up as a result of Soviet irrigation systems. The shrinking of the Aral Sea, as well as the death of her grandfather from pesticides used in Soviet cotton fields, served as powerful motivators when it came to developing her career.

“When I grew up, I realised there was little we could do to refill the Aral Sea, but what I could do was improve businesses’ awareness of their responsibility towards the environment and society,” Malika says. Today, she is doing just that as founder and director of Central Asia Responsible Environment and Corporate Social Responsibility (CARE CSR).

Journey to becoming a CSR specialist

Gunel is a CSR specialist for LU-MUN holding in Azerbaijan, an investment company focused on agricultural projects, currently involved in several innovative, socially responsible business practices. However, she came to her role in CSR through a career in health promotion.

“Through my work at LU-MUN Holding, I saw how they were approaching business in a different way, taking into account the environment and actively giving back to the community through social projects,” Gunel says. She is currently coordinating a plethora of innovative projects, including one delivering beehives and the necessary equipment for single women in remote villages of Azerbaijan to start a honey business, make a sustainable income and become financially independent.

Gunel quickly realised that CSR was an all-encompassing field that could contribute to health promotion too. “It’s such a field that it touches every other field, including health,” she says.  Now she feels impassioned to contribute to the recognition and implementation of responsible corporate practices in Azerbaijan and believes this will make a big impact in her initial field of interest.

 CSR as uncharted territory

When Malika began her work in Uzbekistan in 2017, there was little understanding of the term. She says: “It was hard for me to explain what it was to government authorities, businesses or other related stakeholders. They didn’t understand the point of practising CSR.”

Gunel had a similar experience advocating for CSR in Azerbaijan. Most businesses didn’t take the environment and sustainability goals seriously in their operations, often conflating CSR with philanthropy.

“A company would visit an orphanage and say, ‘we have CSR’, but they wouldn’t have any proper corporate governance or meet any environmental obligations,” Gunel says. “Many companies in Azerbaijan still take this approach of giving a man a fish, rather than teaching him how to fish for himself.” However, Malika and Gunel have both played a key part in transforming perceptions.

 A wave of change in Uzbekistan  

In Uzbekistan big changes occurred with the launch of the Uzbek Cotton Pledge. In 2010, 331 brands and retailers pledged to end the practice of forced labour in the cotton sector in Uzbekistan by boycotting Uzbek cotton. This forced the government of Uzbekistan to take resolute steps to eliminate forced labour in the cotton industry. The Uzbek Cotton Pledge was finally lifted in March 2022 after the Uzbek Forum for Human Rights found no state-imposed forced labour during the 2021 harvest.

The end of forced labour in the cotton sector helped improve Uzbekistan’s image abroad and created new opportunities for Uzbek businesses to start exporting their goods internationally.  With these new opportunities and external demands came the need to establish socially and environmentally responsible business practices, contributing to big transformations in attitudes towards CSR.

Malika says: “If you compare 2014 and 2022, there have been huge changes and the government is playing a huge part in that change.” The Uzbek government has provided incentives for companies to implement CSR by covering the expenses of certificates and audits. According to Malika, CSR is just the initial stage on the road to greater corporate responsibility, with environmental, social and governance (ESG) strategies forming the crucial next step. As a consultant for GIZ, EBRD, Amfori and the Uzbek government, Malika is currently involved in in developing both CSR and ESG strategies.

Progress  in Azerbaijan

The Azerbaijan government recognises the important role and ethical value of ESG policies and is incorporating such policies into regulations. Progress is occurring slowly, but surely, although Gunel says: “CSR implementation is still voluntary but when it will be mandatory, it will be too late. We will lose lots of resources if we don’t start today.”

The main obstacle is the lack of government incentives and protocols to encourage the implementation of CSR and ESG practices.

The working group within the Presidential administration, however, gives great reason to be optimistic. At least within government circles, discussions around ESG and corporate responsibility have become more common, although Gunel is working hard to promote the concept more widely. Gunel says: “Some company executives struggle to understand the benefits that incorporating CSR and ESG practices can bring to their businesses. More awareness raising needs to be done to change attitudes in Azerbaijan.”

A look to the future

 For Gunel this means stepping up her advocacy work to make an impact on policymaking in Azerbaijan, as well as targeting sports teams she hopes will play a key role in promoting CSR. She says: “One of the objectives of LU-MUN holding is to advocate and inspire our partner organisations and other companies in Azerbaijan to take their environmental and social responsibility seriously.”

Looking to the future, both Gunel and Malika stress the significance of international collaboration in CSR implementation and call for greater cooperation. Gunel says: “Whatever we do in Azerbaijan, it affects the entire globe in the end. It is very crucial for us to unite all efforts and resources and support each other by knowledge sharing.”

Currently Malika is involved with organising an international CSR conference on 29 November at the Management Development Institute of Singapore in Tashkent to exchange international experiences on CSR and ESG development in emerging markets and discuss social responsibility, sustainability and ethics in business.

And in January 2023, Malika will take part in a collaborative project that could prove a useful blueprint for international cooperation in this field. The Uzbek government will work with the European Bank for Reconstruction and Development (EBRD), as well as the Asian Development Bank (ADB), the United Nations Development Programme (UNDP), the Swiss Embassy and the German development agency GIZ to develop a roadmap on CSR and ESG practice in Uzbekistan.

Knowledge sharing and cooperation

Malika and Gunel may have taken different paths in their journeys to becoming CSR specialists, but they share the same determination to contribute to an environmentally sustainable, fair and socially responsible world.

The John Smith Trust network facilitates the cooperation and knowledge-sharing essential for strong leadership on governance, justice and sustainability issues. Malika and Gunel were connected recently through the Fellows network, giving them a unique opportunity to exchange insights, perspectives and strategies.

Gunel says: “Meeting with like-minded people is crucial. We can always learn from each other and adapt certain strategies which have been successful in other countries around the world.”

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Photo credit: Quang Nguyen Vinh/Pexels