Social investment. Social investment as an element of business social responsibility

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Social business investments are managerial, technological, material resources. This category also includes corporate funds.

Main direction

All the above resources are spent on the implementation of special social programs. They are designed according to the needs of external and internal stakeholders. It is assumed that based on the implementation of these programs, a certain socio-economic result will be obtained. Next, we will consider in more detail what applies to investments in the Russian Federation.

General information

Social investments are presented as a set of enterprise costs for special programs. It includes expenses for the development of staff skills: vocational training and retraining, he alth protection, labor protection, and so on. Social investments are aimed at improving the state of the environment, ensuring fair commercial practices, and contributing to local communities. Theoretically, the category under consideration should not include forced(regulated by law) program costs. Nevertheless, in practice it is quite difficult to distinguish between forced and voluntary costs. Social investment in Russia is closely linked to corporate responsibility. The larger the volume of the first, the higher the second will be, as, indeed, vice versa. Investments in the social sphere contribute to the formation of the image and improve business reputation. They act as long-term investments in companies' intangible funds.

Social investment performance

These investments, both in domestic and Western practice, have a very beneficial effect on the business activity of companies. Social investment stimulates positive changes in society. It must be understood that the costs of programs cannot be considered charity. Social investments imply a corresponding effect. They have a long payback period and a low present value. However, the return on these investments is expressed not only in cash. The result can be a strengthening of trust and the formation of a positive image of the enterprise among members of the community in which social investments have been directed. According to the results of many foreign studies, other things being equal, people prefer to choose the enterprise that, in their opinion, is most responsible to society. In the future, such a choice turns into direct actions. In particular, people buy stocks, purchase services, goods, and so on. ATThe direct business benefits of social investment are:

• Building a stable business environment.
• Increasing the market value of the enterprise in the long term.
• Reduce operational risk.
• Improve financial performance.
• Increased sales.
• Reducing recruitment costs.
• Increase in labor productivity.
• Expansion of the market sphere.

Investment structure

Labor-intensive industries are predominantly focused on domestic investment. This, in particular, he alth protection and staff development. At the same time, material and energy-intensive areas are more focused on external costs: environmental protection, resource conservation. The above fact reveals the provision on the dependence of the size of investments on the specifics of the enterprise in a broad sense. Thus, the light industry pays more attention to work with their own employees. Enterprises of the "heavy" sphere are forced to spend money on resource saving and environmental protection. It should be said that external directions are predominantly characteristic of the forestry, wood processing, chemical industries, as well as the service sector (including housing and communal services). Domestic costs, in turn, are borne, as a rule, by the electric power, engineering, trade, transport industries, as well as companies producing consumer goods.

Quality aspect

It is associated with the assessment and consideration of the level of complexity and completenessdirectly the process of implementing social investments. The qualitative investment index serves as an analytical and statistical embodiment of this aspect of the problem. It actually allows you to determine the level of investment diversification, the degree of information equipment, organizational support for planning and subsequent implementation of social spending.

Quality assessment criteria

In Russia they are grouped into three groups. They are based on the following metrics:

The first group of criteria is the institutional design of socio-political processes. In this case, accounting is provided for the following positions:

- the presence of a special document that fixes the actions of the enterprise in the indicated direction (normative centralization);

- the existence of a special unit that is responsible for the implementation of programs by the company (organizational centralization);

- use of a collective agreement (regulatory framework).

The second group of criteria is the accounting system of social events. Four positions are assumed here:

- annual preparation of financial statements, in accordance with international standards (standardization and unification of information);

- evaluation of the effectiveness of investments (ensuring feedback between the investor and investments);

- availability of examples of programs (informing the public to transfer positive experience, promote the reputation and image of the enterprise, self-promotion);

-introduction of world generally accepted standards into spending (information basis for socio-political activity).

The third group of criteria is the complexity of implemented social investments. Accounting for 5 areas of expenses is provided here:

- to develop staff skills;

- for occupational safety and he alth of employees;

- for environmental protection and resource conservation;

- for the development of local communities;

- to maintain good business practices.

In accordance with the directions related to the last group, the principle of maximum diversity of socio-political activity of companies is formulated, since the concentration of investments in the first two positions leads to disproportions in the development of the entire socio-economic system.

Information base for studying embeddings

The results of a survey of one hundred Russian companies serve as a source of quantitative measurements of investments. The implementation of the project was supported by the Government of the country, the Ministry of Investments. Funding was provided by the United Nations Development Program. General coordination was carried out by the Association of Russian Managers.

Main issues

The main one is the complexity of the performance evaluation process. First of all, the effect is rather difficult to express in terms of money. In addition, not in all cases it is possible to prove that this or that increase in indicators was the result of investments. Also today in Russiathere are no clear and distinct criteria for corporate responsibility analysis. There are no clear ideas in society about what the aesthetic principles of modern commercial activity should be and what are the benefits of socially responsible actions. There are no strict standards and requirements today.