Opportunities and options for governments to promote corporate social responsibility in Europe and Central Asia - evidence from Bulgaria, Croatia, and Romania

Corporate social responsibility is the voluntary commitment by company managers to integrate social and environmental considerations in their business operations. This commitment goes beyond normal compliance with the legal, regulatory, and contractual obligations, which companies are expected to meet. Corporate social responsibility business practices complement rather than substitute for state actions that promote social and environmental development. While corporate social responsibility practices contribute to the realization of social, economic, and environmental goals, promoting them should not be a pretext for shifting public responsibilities to companies. To strike a balance between the expectations and potential for making their respective contributions to overall social well-being, companies, governments, and spokespeople for societal interests need to engage in an inclusive and evolving dialogue. That dialogue must be followed up with incentives and resources to translate the results of dialogue into action. This paper focuses on the Europe and Central Asia Region, where a dynamic process of social and economic change is occurring, mainly through the process of European integration. Within this dynamic, the corporate sector is already encouraging suppliers and customers to practice responsible business behavior. This report is divided into five parts. Part two summarizes the basic concepts of corporate social responsibility. Part three reviews how corporate social responsibility is perceived in three Central and Eastern Europe countries: Bulgaria, Croatia, and Romania. Recognizing that the corporate social responsibility movement has been driven largely by business, part four examines issues governments have to face in adopting a policy-driven approach to encouraging corporate social responsibility, and making an operational strategy sustainable. Part five discusses the possible instruments through which the Bank, as a substantial source of advice and financial support, could contribute to the design and implementation of a country's corporate social responsibility strategy.