IRI in Azerbaijan

The Islamic Reporting Initiative (IRI) welcomes the Center for Economic and Social Development as its latest member in Azerbaijan and spoke to Mr Vugar Bayramov, Chairman of the Board.

How would you describe Corporate Social Responsibility (CSR) in Azerbaijan?

CSR is at an early stage of development in Azerbaijan. A lack of conceptual studies and information in the field lowers both public perception and commitment towards it. Most companies, with the exception of banks, telecommunications and oil companies, consider CSR to be philanthropy, a perception that has created misunderstanding and limits CSR principles to occasional charity activities by local organizations, government bodies and a few representatives of the private sector. These activities do not follow a formal CSR strategy, and they are not reported on a regular basis.

What are some of the key social and environmental concerns in Azerbaijan which businesses could play a role in addressing?

Key concerns in Azerbaijan related to its oil and gas sector include the possible environmental impact of the industry, such as oil spills, the social impact of the industry on local communities and macroeconomic difficulties created by the inflow of oil revenues. Moreover, the UN Global Compact’s strategic policy has been addressing its key fields within human rights, labour standards, the environment and anti-corruption in Azerbaijan. Businesses could focus on important aspects of environmental performance, energy management and labour conditions in Azerbaijan.

What do you see as key benefits to businesses in Azerbaijan when implementing CSR?

CSR allows businesses to respond quickly to the emerging needs of a society, whether these are economic, environmental, or social problems. The government is a secondary beneficiary, as successful corporate responsibility practices reduce the government’s burden for responding to a wide range of issues. Moreover, businesses that engage in CSR can benefit in establishing a positive image of themselves,including in the eyes of society, which may help in advertising their products.

Please say a few words on the correlation/compatibility between CSR and Islamic principles and values.

Inspired by Islamic principles to help the poor, following the oil boom of the 19th century, shareholders and oil magnates such as Haji Zeynalabdin Tagiyev, Murtuza Mukhtarov and Aghamusa Nagiyev engaged in philanthropy by setting aside money for the public good. In the past, oil magnates and millionaires contributed substantially to the development of a national press, education, public welfare, and architecture in Azerbaijan, which in a way represented the first steps to CSR in the country.

What do you see as the greatest outcomes the IRI could achieve by effectively integrating Islamic principles and values into a framework for implementing CSR?

As I mentioned, some positive steps have been taken towards the formation of CSR in Azerbaijan, yet the majority of SMEs (accounting for 79.6% of total business entities in the country) are very passive in taking up CSR. Challenges that remain for the development of CSR in Azerbaijan include lack of information, the absence of awareness of international experience in the field, indifference to its impact on communities, and the inadequacy of government incentives. Neither governments nor businesses have a CSR strategy and the position of civil society in promoting its concerns are also weak. Generally, IRI could have an impact in encouraging companies to report activities that could be considered CSR, which currently may be hidden or unexplained to the public.

Please explain how your organization will support the development of the IRI?

The CESD holds regular conferences, seminars and workshops on social and economic topics. As one of the leading thinktanks in the region it also formulates research and policy papers.

What do you see as key benefits to organizations in Azerbaijan that join the IRI?

Being part of the IRI will allow local organizations to address issues specific to Azerbaijan and to progress with the development of CSR by raising awareness and possibly encouraging businesses to create a strategic plan as well as to report projects that are linked to CSR.

Established to lead the creation of a reporting framework for CSR based on Islamic principles and values, the not-for-profit IRI has members in more than 40 countries. It has been commended by the Organisation of Islamic Cooperation (OIC), the second-largest inter-governmental organization after the UN.