Social aspects of existence led by the jewelry industry in Russia are a rare topic for detailed discussion in the domestic mass media. If any, such a discussion is in many ways different from a similar one in foreign mass media. Incongruity of notions is also coming to the fore. The Russian notion of “social responsibility of business,” although to a large extent identical to “corporate responsibility,” in fact comprises a wider scope of business conduct rules preferable from the point of view of the society and the state (once rudely but succinctly worded by Alexander Livshits as “Share your profits!”). On the other hand, the English-language phrase “ethical jewelry” has no analogues in Russia in the first place due to the absence of a substantial stratum of people in the society who would be worried about compliance of jewelry production and sales with the “green” consumption concepts or who for instance would take close to their hearts the problems of Burmese rubies and “blood diamonds.”
Nevertheless, there is certain coincidence in positions on social aspects of jewelry industry activity between Russian and foreign jewelry companies and mass media discussing this subject.
The Jewelry Russia bulletin has made an attempt to delineate the problem in a generalized way. According to its data, Russia occupies the last place in terms of social responsibility of business in the recently published results of a survey undertaken by the Institute of Management Development in Switzerland. In the JR’s opinion, such a conclusion looks strange on the background of other evaluations provided by European analysts, who believe that Russian companies are setting the pace in Europe as far as the scale of social investments and charity is concerned.
Again, some surveys performed by domestic analysts and in particular by RosYuvelirExport prove that things in Russia are not so much in a bad way with social responsibility per se as with the extent this kind of information is available. Indeed, the attitude of entrepreneurs to splurging their social activity is ambiguous. Today we can see approximately equal numbers of those who believe that business should amply inform public of social programs improving its standing and those of quite the opposite opinion.
The vague understanding of what is concealed behind the notion so far unusual for the Russians projects onto survey results. Thus, early this year the All-Russian Public Opinion Research Center (VTSIOM) furnished information of what Russian entrepreneurs and people mean to be social responsibility of business.
According to business people, the essence of social responsibility is in implementation of their major business functions (paying decent salaries and taxes and creating new jobs) and not in taking up the burden of social problems existing in the country and its provinces (this opinion is backed up by 60 percent versus 39 percent of those polled).
Thus, the majority of surveyed entrepreneurs named creation of new jobs (58 percent) and offering additional social guarantees to their workers (51 percent) as well as advanced vocational training and re-education of their employees (44 percent) as the most important lines of business participation in solving social problems. The second echelon of business-relevant kinds of social activity comprised tacks with a traditionally high level of PR gain: welfare assistance to socially vulnerable groups of population; development of social and cultural facilities; and financial stimulation of gifted scientists and artists (30-41 percent). On the periphery of business interests there are those aspects of social work, which are related to development of civil society institutions (improving the human rights situation, supporting social initiatives put forward by population and public organizations), as well as activities, which are a visiting card for many socially responsible foreign companies, like diminution of discrimination in the labor sphere and abolishment of compulsory and child labor (5-7 percent).
On the part of the population it turned out that it expected from business welfare assistance to the poor, disabled and other socially vulnerable groups (53 percent) in the first place and only after that came new jobs (43 percent) followed by development of facilities in the public health service, education and science, culture and sports (39 percent) and then by social guarantees for workers (28 percent).
The jewelry business has a social responsibility concept of its own, which is manifested in its activities, the bulletin writes.
For example, within the frames of its corporate activity AK ALROSA is implementing ecological programs, commissioning education establishments and infant schools, rendering support to culture, science and sports. ALROSA’s major social programs are being accomplished primarily in the Republic of Sakha (Yakutia). In view of this, the Russian Government awarded the title of “Organization of High Social Responsibility” to this company on repeated occasions in the course of the last five years.
OAO PO Kristall is providing its assistance to several institutions all at once. In the beginning of 1999 the Administration of Smolensk asked the company to be a sponsor for orphaned children. The company immediately decided to take 65 orphaned children under its guardianship and to give them its permanent recipient-oriented assistance.
There is one more orphan asylum under Kristall’s close attention – the Kadymovo Residential School. This children’s institution is given permanent material assistance by the company, which buys for it necessary equipment and supplies New Year gifts whereas its employees organize really grand holidays for the children.
“In the West they were ahead of us in understanding there should be done something for your city, not just for your company. This depends on the company’s resources – the bigger the company the more it can do. For instance, we are trying to do something to improve the prestige of Smolensk and to make people living there feel better. It is not enough just to give jobs. If employees see that their company is not wholly focused on deriving profit, but is trying to sow something good and useful, they change their attitude to their work and get proud for their company strengthening its corporative spirit. When a company is positioned as a leader it feels responsible towards other strata of the society; as they say, the more rich people around, the richer is the country,” D. Kuntsev, Marketing Chief of Kristall, believes.
The Nika Company took an orphan residential asylum under its patronage and currently it is being repaired and reconstructed at the company’s expense. Charity is not always expressed in money and financial assistance.
For example, Nika’s employees used to organize festivals for the children in foster care. Apart from that, managers and factory workers buy toys, sports equipment and game accessories, as well as stand-up scooters, educating table games and many other things for their own money. Kristall’s employees collect money and warm clothing for orphaned children and for children brought up in a specialized children’s asylum.
Any almsgiver may also “give freely” his or her time and money taking part in programs and actions. For example, Jewelry House Zolotoye Sobraniye held a charity concert and an auction sloganned “Zone of Hope” in support of the Fund “Centre of Therapy and Rehabilitation of Children with Infantile Cerebral Paralysis” chaired by Gosha Kutsenko. The aim of the concert was to attract public attention to ICP children’s problems and to collect money to complete the construction of a therapy centre providing all necessary equipment.
After animal jewelry was displayed at the New Russian Style Exhibition, the “Lisa” Charity Fund protecting animals held a charity auction where it sold the first limited collection, whose proceeds were remitted to an asylum for stray animals.
But does it worth powder and shot? This question posed by the Jewelry Russia is of interest, as we know, not only to Russian but also to foreign jewelers.
Many of the companies surveyed by RosYuvelirExpert declined to publish anything about their charity actions saying this was their own private business not related to corporate events or national interests and stressing that this spiritual need should not be made public. Of course, this kind of attitude inspires respect, but one may look at it the other way around.
There is no sense in balancing between the two allegedly opposite poles: the pursuit of maximum profit and the policy of socially responsible business, the JR says. On the contrary, such a policy brings evident advantage for all market participants. The consumer as a society member meets his or her concernment in a higher living standard and accommodation of sharp social problems. And what kind of advantage goes to the company? If we speak of inner corporate relations, there are more opportunities to attract and retain employees (because people prefer to work with companies whose values match their own). There are also more loyal customers sticking to such a company since they, as the bulletin believes, deem it important that products they buy are manufactured with understanding the responsibility towards environment and other social aspects. This entire complex in its turn steers the company to greater profits, higher competitiveness and less claims from regulating authorities.
As we have repeatedly noted, the only Russian jewelry company, which placed the matters of social responsibility and charity into the foundation of its image, is Altyn.
In Altyn’s latest press release published in the federal and Saint Petersburg issues of the Komsomolskaya Pravda there is a detailed enumeration of charity actions performed by this company, while the press release proper is timed to coincide with the visit of Grand Duchess Maria Vladimorovna to Russia:
“The official delegation of the Imperial House, which accompanied Grand Duchess Maria Vladimorovna during her regular visit to Moscow, included Antonina Babosyuk, Knight of the Order of Saint Princess Olga and President of the Charity Fund “Altyn.Our Children.” The charity fund initiated by Antonina Babosyuk takes an active part in social actions aimed at supporting the growing generation of this country.
The fund sponsored such large-scale projects as the Moscow All-Russian Festival “Childhood World” and Moscow International Forum “Gifted Children.” The fund was a participant in the charity program “Let Us Save Our Children!” and assisted in seeking talented boys and girls holding contests among opera signers under the auspices of Elena Obraztsova, as well as rendered support to many other projects.”
However, despite the zealous advocacy of their achievements on the charity floor Altyn remains under permanent criticism of their counterparts. Sometimes (as in this case) these are joined in their invectives by experts on consumer market.
“There is an enormous number of questions to one of the largest stores in the city,” reports the chairman of one of the Omsk societies protecting consumer rights in the provincial issue of the Rossiiskaya Gazeta. “The gold they offer there is far from perfect. Sometimes a gold chain may fall to pieces or an earring’s fastener may break. There were claims to their watches. And what can you expect from a jewelry boutique whose name literally means “three kopeks” and not at all “gold” as some people think? I would like to warn the residents of Omsk from buying jewelry at this store.”
And finally, an example of quite the opposite attitude towards publicizing charitable activities is displayed by Maxim Shkadov, General Director of Kristall, in his interview to the Smolensk News biweekly:
- Under Alexander Shkadov Kristall was famous for its charitable activity. How are the things now?
- Certainly, we are not oblivious of this. Because social responsibility of business is not mere words. To arrange this kind of activity in a proper way we established the Charity Fund named after Alexander Shkadov, which is a non-for-profit organization straightly engaged in distributing funds.
Actually, this is where the company’s top executive draws bridle.
