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CSR consulting turns a corner

Some interesting new trends appear to be emerging in the field of CSR consulting. Instead of consultancies approaching companies to offer their services, it is now more often the other way around.

In 2004–2005, when CSR businesses were first launched in Hungary, it was mostly consultancies that approached companies with their offers for various services, Katalin Urbán, lead consultant and partner at CSR consultancy Alternate told the Budapest Business Journal. Today, however, this trend has reversed, although consultancies still have to recruit customers for group programs. The medium- and large-sized enterprise sector provides consultancies with most work. Top companies often seek out CSR advisory services, including firms that are usually the subject of social criticism, such as banks, multinational retailers and energy companies. However, consultancies say that SMEs are also now starting to address the issue.

Judit Németh, managing director of CSR consultancy MTD, explained that SMEs are “clearly becoming increasingly interested in CSR issues,” although they remain “rather careful” in investing in CSR programs. Small- and medium-sized enterprises show interest in equal opportunities and programs facilitating responsible corporate operations. Urbán noted that in the case of SMEs, it largely depends on the owner’s personal conviction whether CSR is considered to be important enough to spend money on in the midst of an economic crisis.

One of the most positive changes in the Hungarian market according to consultancies is that companies now – instead of making “obligatory” occasional donations and sustainability reports that serve mostly PR and marketing purposes – tend to choose long-term partnership programs where civil organizations provide professional services for them: health promotion and recreation programs, volunteering, or community cooperation, for example.

Companies also increasingly tend to pursue CSR activities in fields related to their original activity. There are some promising tendencies indicating that long-term strategic CSR is becoming more common and accepted. Companies choosing long-term programs tend to focus on economic sustainability and the employee side, and regularly publish sustainability reports. In these cases, image-building and PR is a less relevant issue, although parent companies may prefer to see that CSR programs and sustainability reports contribute to business results.

Companies that pursue long-term strategic CSR activities were less likely to cancel their programs as a result of tighter budgets during the crisis. On the other hand, companies that treat CSR as short-term action plans were more likely to withdraw money. All companies expect creative and economical solutions, Urbán added.

The local production facilities of many foreign multinational companies are motivated by the pressure of the parent companies, and they look at CSR as organizational development. Urbán noted that Hungarian units have limited independence in defining their own CSR activities, and are expected to follow the strategy of the parent company. These expectations may motivate the local firm to have a genuine and long-term CSR strategy, but can also be prohibiting.

In the countries of Western and Northern Europe, the motivations behind CSR are different, Urbán said. There is much bigger pressure from the public, and the people involved at companies have to react much better to this pressure. Also, as Németh explained, CSR in Hungary is still the “privilege of the big guys.” In Western Europe and the US, on the other hand, the voluntary attitude of focusing on a sustainable future is manifested in the everyday decisions of ordinary people.

In Hungary, it will take another eight to ten years to achieve this attitude, she added. “When construction waste is still thrown into nearby forests, there is great chaos in people’s heads,” Németh concluded.