In the context of the Association Agreement with the European Union, Ukraine has an obligation to establish corporate social responsibility and accountability (Art. 422). Social responsibility of businesses is also referred to as one of the means of implementation of the Strategy for Sustainable Development “Ukraine – 2020”.
Ukraine does not have a separate CSR strategy development, although there have been attempts to develop it, or a separate state agency that would be accountable for responsible business conduct. However, adoption of the Concept of CSR has been included in the plans of the Ministry of Economic Development and Trade for 2016-2018. Additionally, it is important to note that the process of Ukraine’s accession to the OECD Investment Committee includes accession to the OECD Declaration on International Investments and Multinational Enterprises. The approval of CSR national standards in Ukraine is considered.
In Ukraine there are two organisations that unite businesses around CSR: the Global Compact Local Network (currently includes 18 active companies, as of 22 October 2016, according to the Global Compact website) and the CSR Development Centre which unites 40 companies in Ukraine (22.10.2016). The European Business Association and the American Chamber of Commerce have CSR Committees.
Reform of state enterprises
Reform of state enterprises, which also implies transparency of public companies, has given impetus to the implementation of a social responsibility policy in public companies. During 2015 the number of public companies which had business strategies and reported non-financial performance and environmental policy, had increased. Additionally, public companies are required to have anti-corruption policies in place.
Social responsibility of municipalities
Social responsibility is not limited to business. In Ukraine, it is actively implemented by municipalities. City Councils implement many projects aimed at the policy of city resource efficiency and environmental protection, municipality transparency, compliance with public procurement transparency, providing residents with quality services (water supply, electricity, waste recycling, urban greening, etc.) and others. In 2015 the first competition for the best socially responsible practices of municipalities was held and the first 5 non-financial reports of the municipalities of Vinnytsia, Ivano-Frankivsk, Lviv, Sumy and Irpen were prepared under international accounting standards. This practice should be acknowledged and spread across the country.
CSR practices are developing in Ukraine. According to a review of the 500 largest companies in Eastern Europe, 90 companies in the region prepare non-financial reports and measure their environmental, social and economic impact and 21 of them are from Ukraine (Deloitte, 2015).
Ukrainian companies are moving from charity to the implementation of the CSR strategies and projects; these projects are becoming more ambitious and systematic and are being actively integrated into business strategies. The number of companies which prepare non-financial reports is growing, though slowly. In 2012, 9 companies out of 100 of Ukraine’s largest companies prepared and published such reports on their websites and in 2015 their number almost doubled to 17 companies. The transparency level of Ukrainian companies is growing. The transparency index of the largest Ukrainian companies showed an increased average level of disclosures of social responsibility information on the company websites from 14% in 2012 to 21.5% in 2015. One third of the companies have transparency levels higher than average.