Since 2004, UNDP Kazakhstan has been actively involved in promoting the UN Global Compact principles as well as expanding the local Global Compact network. As a response to the national priorities, UNDP began implementing projects aimed at increasing the understanding of the private sector, government institutions and civil society organizations of the role and potential of business in addressing social concerns. In order to understand the dynamics behind the CSR promotion in Kazakhstan, UNDP, jointly with the Forum of Entrepreneurs of Kazakhstan, decided to carry out a sociological study to research the current status and prospects for development of CSR in Kazakhstan.

Around 450 Kazakhstani entrepreneurs participated in the survey, mainly from the small- and medium-sized enterprises. Its results showed that more than half of business representatives were not yet ready to undertake significant responsibility for solving social problems, as they believed they should be socially responsible mainly to their employees. Moreover, they believe that social problems are of governmental concern, especially as companies make tax payments which are intended for social development in the country. However, most of the companies still undertake certain activities in the area of CSR, including not only activities on improvement of the social well-being of their employees, but also charity and sponsorship actions towards the population and their living standards.

Expectations of business regarding the state are also high in terms of the determination of a clear position of business participation in partnering with the government authorities. In this respect, businesses asked for seminars and courses on these new forms of activities, organization of surveys, as well as studies on the successful international practice of the implementation of social projects.

However, the sociological survey did not cover oil and gas companies of Kazakhstan which represent the main drivers of the economy. Therefore, a second survey was conducted to study the situation of social investments in, and originating from, the oil and gas sector. A total of 40 respondents from the government, NGOs and the private sector were surveyed with questions on the perceptions of corporate social responsibility (CSR), the drivers of social investment payments, priority areas for social investment payments and challenges to compliance with social investment obligations. Based on the results of the survey, social investment payments directed at infrastructure and other regional needs, including environmental protection, appear to have the highest priority, both currently and in the future. Moreover, support to vulnerable groups, especially children; education; environmental protection and healthcare were also high priority areas for social investments.

However, one of the most significant factors negatively influencing the development of social projects is their perceived lack of profitability. Despite the financial crisis, the level of social investment in 2008 did not decrease from previous years and some respondents noted increases. Taking into account the impact of the world economic crisis, respondents from government and NGOs believed that in the long run there would be a reduction in financing for social investment projects. Company respondents tended to believe that implementation of ongoing projects would not be stopped, but might be postponed until better times.

As a result of the surveys the following recommendations were developed:

-          To develop a rating system which will give incentives to the companies to become members of the UN Global Compact

-          To establish a Trust Fund in order to increase transparency of the business contributions as well as to increasingly promote a participatory approach in solving relevant problems. 

The future of corporate social responsibility activities of businesses in Kazakhstan is in increasing the regulatory role of the government in solving social problems. At the same time, the business community should express its willingness to participate in social projects. Most of the respondents are convinced that the government should elaborate measures to stimulate entrepreneurs to participate actively in important social activities which are needed in Kazakhstan.

For more information, please contact Botagoz Buralkieva, Project Manager, UNDP Kazakhstan.