ADA UNIVERSITY

SCHOOL OF PUBLIC AND INTERNATIONAL AFFAIRS BACHELOR

OF ARTS IN INTERNATIONAL STUDIES/PUBLIC AFFAIRS

CAPSTONE PROJECT SUBMITTED IN PARTIAL FULFILLMENT OF THE

REQUIREMENTS FOR THE DEGREE OF BACHELOR OF ARTS IN
INTERNATIONAL STUDIES/PUBLIC AFFAIRS

Azerbaijani Government’s Corporate Social Responsibility Related Expectations

from Private Sector Companies

Saida Mammadova

Mahbuba Gahramanli

Fidan Ahmadova

Vusal Gahramanov

Babak Mammadzada

Samad Samadli

Contact e-mail ssamadli@ada.edu.az

Baku, May 10th, 2021

 ADA UNIVERSITY

PROGRAM: Bachelor of Arts in Public and International Affairs

STUDENTS’ NAMES: Saida Mammadova, Mahbuba Gahramanli,

Fidan Ahmadova, Vusal Gahramanov, Babak Mammadzada

APPROVED:

Faculty Supervisor: Bakhtiyar Aslanbeyli

Organization Supervisor: Khalid Rajabov

Dean of School: Anar Valiyev

Date: May 10th, 2021

STATEMENT OF AUTHENTICITY

I have read ADA University’s policy on plagiarism and certify that, to the best of my knowledge, the
content of this paper, entitled (Azerbaijani Government’s CSR Related Expectations from Private Sector
Companies), is all my own work and does not contain any unacknowledged work.

Signed: Saida Mammadova

Signed: Mahbuba Gahramanli

Signed: Fidan Ahmadova

Signed: Vusal Gahramanov

Signed: Babak Mammadzada

Date: May 10th, 2021

Azerbaijani Government’s Corporate Social Responsibility Related Expectations from Private
Sector Companies

Saida Mammadova, Mahbuba Gahramanli, Fidan Ahmadova, Vusal Gahramanov, Babak

Mammadzada

Keywords: CSR, Legislation, Private Sector Companies, Social Partnership, Social Projects

Abstract:

This paper focuses on the concept of corporate social responsibility (CSR) and practices of both Azerbaijani

and foreign companies. It is noted that CSR culture is not peculiar to the majority of Azerbaijani companies

taking into account that currently, this sphere is under development. The main barriers are the lack of

legislation and scientific material in the Azerbaijani language about CSR. In this study, CSR activities of five

local companies, namely Pasha Holding, Azercell, Bakcell, Azercosmos, and BP Azerbaijan companies are

analyzed. Although CSR programs carried out by BP Azerbaijan are laudable, the company is recommended to

focus more on solving environmental issues by initiating tree-planting campaigns in newly liberated Karabakh

lands. Moreover, it would be pertinent to launch a program of refining the water of the Caspian Sea taking into

account that BP Azerbaijan is also involved in its pollution. The company may also consider participating in

the restoration of the Karabakh region by funding the construction and refurbishment of mosques located there.

1
 TABLE OF CONTENTS

1. Introduction.................................................................................................................................................................................3

2. The Concept of CSR...................................................................................................................................................................6

2.1. The History and Definition of CSR........................................................................................................................................6

2.2. Types of CSR............................................................................................................................................................................7

2.3. Principles of CSR Formation.................................................................................................................................................9

3. CSR in Europe...........................................................................................................................................................................12

4. CSR in Azerbaijan.....................................................................................................................................................................18

4.1. Problems Related to CSR......................................................................................................................................................18

4.2. CSR legislation in Azerbaijan..............................................................................................................................................18

4.3. The current situation in Azerbaijan in regard to CSR.....................................................................................................19

5. Pasha Holding..........................................................................................................................................................................21

6. Azercell.....................................................................................................................................................................................26

7. Bakcell......................................................................................................................................................................................28

8. Azercosmos..............................................................................................................................................................................31

9. BP Azerbaijan.........................................................................................................................................................................32

10. Recommendations to BP Azerbaijan...................................................................................................................................35

11. Conclusion..............................................................................................................................................................................38

References...........................................................................................................................................................39

2
 Part 1

Introduction

Corporate social responsibility (further CSR) is one of the most discussed topics in the business world

in recent times which is caused by the fact that the role of business in the development of society has

significantly increased, and the requirements for openness in the business sphere have risen. Many companies

have realized that it is impossible to conduct business successfully by functioning in an isolated space.

Therefore, the integration of the corporate social responsibility principle into business development strategy

becomes a characteristic feature of leading companies.

The modern world is living under conditions of acute social problems, and in this regard, the social

responsibility of enterprises and organizations associated with the development, manufacturing and supply of

products and services, trade and finance is extremely significant because they have the main financial and

material resources for tackling existing problems (Kadlubek, 2015). Hence, the concept of CSR can be

characterized as crucial not only for business but also for humanity as a whole.

The mission of a socially responsible company is a formally formulated position of the company with

regard to its social policy. Social programs, in turn, refer to activities voluntarily carried out by the company in

order to protect nature, develop personnel, create favorable working conditions, support the local community,

as well as charitable activities and good business practice (Guliyev, 2015). The main criterion is the

consistency of the programs with the goals and strategy of business development. The company's social

activity is expressed through a variety of social programs, both internal and external. The distinctive features of

social activity programs are their voluntary nature, systemic nature, and alignment with the company's mission

and development strategy.

Social programs can be different in nature including companies' own programs, programs of

informational cooperation with the media, programs of cooperation with public organizations and professional

3
associations, programs of partnership with non-profit organizations, and programs of partnership with central

or regional government bodies (Najafzade, 2017). Local community development is an area of the company's

social programs that are carried out on a voluntary basis and is designed to contribute to the development of

local society, namely to organize social programs and actions to support vulnerable social groups, support

children and adolescents, preserve objects of cultural and historical significance, sponsor cultural, educational

and sports organizations and events, support socially significant research and campaigns, and participate in

charitable actions. Socially responsible investing is not only about generating financial income but also about

achieving social goals by investing in companies that act ethically.

Thus, corporate social responsibility is not just a tribute to fashion, but a vital necessity. Social

innovations implemented as part of CSR strategies not only allow companies to demonstrate their civic

position but also become an important marketing tool, providing an opportunity to stand out, develop new

products and directions, create an emotional connection between the brand and the consumer, thereby

increasing loyalty (Guliyev, 2015).

The benefits that the implementation of corporate responsibility strategies brings to companies include

increased employee satisfaction, reduced employee turnover, and increased brand value. Companies that don't

join miss out on business opportunities, lose competitive advantage and fall behind in management. By not

implementing CSR strategies, they, firstly, do not monitor and control the impact of their production on society

and the environment and, secondly, do not realize their full economic potential (Kanji & Agarwal, 2016).

CSR is not just a public relations function, but an integral part of corporate governance. This activity,

reflected in a system of economic, environmental, and social indicators of sustainable development, is carried

out through regular dialogue with society as part of the strategic planning and management of the company.

Therefore, CSR decisions are made by all interrelated levels of corporate governance, namely company

owners, boards of directors, and management. The essence of this work is that any industrial and economic

decisions are made taking into account their social and environmental impact on companies and society.

4
Therefore, CSR turns into a powerful factor of strategic development, strengthening business reputation and

competitiveness, as well as increasing the market capitalization of companies (Najafzade, 2017).

In fact, CSR is the policy and implementation of the company's sustainable development strategy. By

responding to societal demands, a socially responsible company can take on additional commitments as part of

a voluntary set of attributes of social responsibility, which is in the interests of the company itself and society

as a whole.

The main objective of this paper is to consider CSR from a theoretical perspective, refer to practices of

European countries, and find out how local companies carry out their CSR policies. The paper will consist of

three major parts. In the first part, the concept of CSR will be examined and corporate social responsibility

practices in European countries as well as in the Republic of Azerbaijan will be discussed. The second part will

analyze CSR practices of five Azerbaijani companies with a turnover of over 1 million AZN, namely Pasha

Holding, Azercell, Bakcell, Azercosmos, and BP Azerbaijan. The third part, in turn, will include

recommendations to BP Azerbaijan in order to make their CSR practices better.

5
 The Concept of CSR

The History and Definition of CSR

The ideology of CSR emerged as a business response to pressure from growing leftist sentiments and

the trade union movement in the last third of the 19th century (Brin & Nehme, 2019). The institutions of civil

society that came into existence then demanded that entrepreneurs provide social guarantees to workers and

ensure the protection of their labor which actualized for business owners the task of maintaining the loyal

attitude and motivation of subordinates, which again forced them to turn to CSR. It was the time when the

concept became firmly embedded in the theory and practice of corporate governance in the United States.

At the first stage, it mainly covered the social security of the staff, as well as assistance to the local self-

governments on a partnership and sponsorship basis. Even then, much was already intertwined with the PR-

functions. At the beginning of the 1960s, the practice of the relationship between business and society began to

transform itself into some new form of social contract or a set of written and unwritten regulations and rules

about the patterns of behavior of various elements of society which included compliance with tax laws, health

and safety standards, consumer and customer interests, fair competition and respect for the rights and

responsibilities of others, acceptable pay and working conditions on the part of employers in "exchange" for

duties and responsibilities on the part of employees, etc. (Alhammadi, 2018)

In the 1970s, the concept of CSR, which implies the responsibility of companies to their shareholders,

became widespread. As to Milton Friedman who is a well-known neoclassical economist and the author of this

concept, the only social responsibility of business consists in using its resources and undertaking actions aimed

at increase of its profits, playing by the rules of free and open competition without any forgery or fraud (Ismail,

2009). Another definition of CSR can be encountered in the so-called participatory theory, which proposes a

range of types of responsibility of businesses to various groups of the public in one way or another:

government agencies, suppliers, business associations, trade unions, consumers, shareholders, company

6
personnel and even competitors (Brin & Nehme, 2019). The two concepts cannot be called completely

incompatible taking into account the fact that supporters of participatory theory also consider shareholders as

one of the CSR groups.

Thus, CSR emerged as a result of a profound transformation of the relationship between private

enterprise and society. In a post-industrial economy, the latter does not simply wish to purchase more good

goods, but also to know what their environmental and social cost is. The challenges of globalization have also

played a significant role in forcing companies to look for more and more sophisticated ways of positioning

themselves in an information-saturated world (Gahramanova, 2019).

Currently, the term "corporate social responsibility" is so popular that a search on this combination of

words in the English-speaking part of the Internet yields over a million links. According to the documents of

the European Commission, CSR is identified as a concept that reflects the voluntary decision of companies to

participate in protecting the environment and improving society. Moreover, as to Kadlubek (2015), CSR is the

voluntary contribution of business in the development of society in the social, economic, and ecological

spheres, directly related to the main activity of the company and going beyond the minimum defined by law.

Types of CSR

In regard to its addressees, CSR can be divided into internal and external. Internal corporate social

policy is a social policy carried out for the employees of the company and, therefore, limited to the framework

of the company. External corporate social policy can be characterized as social policy conducted for the local

community in the territory of the company or its individual enterprises. (Guliyev, 2015)

Internal corporate social policy is based on the established opinion of society about the company's need

not only to provide profits and pay taxes but also to take care of its employees. However, society does not send

7
very clear signals to the business regarding its wishes. Therefore, a company often shapes social policy based

on its own perceptions of this process. Usually, the programs of "internal" investments do not go beyond the

following measures: personnel development, improvement of professional and qualification level of employees

building a corporate culture, recreation and health promotion for employees and their families, involvement

and support of young people, including in educational programs, sports programs, rendering financial aid,

assistance to veterans, and the implementation of various children's programs (O'Riordan & Fairbass, 2008).

Internal corporate policy is generally aimed at both developing social capital by strengthening ties,

including informal ones, between employees, as well as between company management and employees, and at

increasing human capital (health, education) of employees.

More and more companies participate in various external social projects initiated both by the authorities

and independently. The main directions of a social partnership of business and authorities are supporting

disadvantaged groups of the population, supporting innovative projects aimed at community development,

conducting educational projects for the public, assistance in organizing cultural and recreational activities,

supporting the activities of cultural, educational, and medical institutions, maintenance of housing and

communal facilities, and participation in the financing of large-scale investments initiated by the authorities in

cultural, sports, medical, and religious facilities (van Marrewijk, 2003).

Programs of external social investments in single-industry towns are the most important and

widespread. They are carried out by city-forming enterprises, mainly with additional funds, besides tax

payments to local budgets. Taking into account the fact that city-forming enterprises employ the majority of

the population in the territories where large companies are present, the internal and external social policies are

actually intertwined.

8
 In some cases, a firm's external social policy helps to eliminate government failures in certain areas of

the social sphere. For instance, municipal and regional authorities quite often coordinate and even transfer a

significant part of the social burden to enterprises.

Principles of CSR Formation

The principles of corporate social responsibility define the main provisions expressing the nature and

essence of the organization and activities to implement corporate social responsibility in the company. Taking

into account that a principle is a basic rule reflecting the essence of CSR it can be inferred that non-compliance

with one principle of corporate social responsibility distorts the essence of this concept.

The principles of social responsibility are formed at the expense of public expectations. Recently the

public expectations addressed to the business have changed significantly, nowadays society is not indifferent to

how the company does its business, what it is guided by, and how it manages its revenues. Thus, it has become

necessary to develop principles for corporate social responsibility activities.

In order for a company to conduct its activities in a way that meets the expectations of society, it must

develop a program of actions related to compliance with social, commercial, environmental, charitable, legal,

and ethical principles. In other words, it is about becoming a worthy corporate member of civil society. One of

the groups of principles of CSR is related to openness. The principles of openness imply that a company

conducts its activities publicly, clearly, and accessibly, providing only reliable information and assuming

feedback from all interested parties. Moreover, as to the second group of principles related to consistency,

social programs should be regular. This group presupposes that the direction of social programs in the

necessary areas consistently and regularly.

9
 It is especially important that the social programs are executed in those spheres in which the society

feels the need at the moment. Thus, there is such a group of principles as the significance that determines the

relevance of the implemented programs, their effectiveness, and scope. Based on these principles, companies

include in their strategy the task of protecting human rights and assessing the impact of their activities on the

conflict, develop and take measures aimed at preventing or resolving the conflict. Hence, it is necessary to

distinguish the fourth group of principles, namely conflict avoidance.

The group of openness includes the following principles: transparency, publicity, credibility, and

dialogue. Transparency presupposes that principles of social policy, social programs, and mechanisms of their

implementation must be clear and understandable. As to principles of publicity, any information on corporate

social responsibility, with the exception of confidential information, must be available to the public. Moreover,

the credibility principle implies that it is inadmissible to conceal or falsify data on corporate social

responsibility. According to the principle of dialogue, the social policy should be based on a dialogue with all

interested parties, and feedback from the addressees of social programs is obligatory.

The group of consistency comprises the principles of directionality, unity in time, unity in space,

regularity, and integration. As to the principle of directionality, there should be the presence of priority

directions of implementation of social programs. Moreover, the principle of unity in time implies the

responsibility for current and past activities, as well as for the future impact of the company's activities on the

outside world. In turn, the principle of unity in space presupposes universal principles of corporate social

responsibility for all regional divisions of the company. The regularity principle presupposes the rejection of

sporadic and fragmentary actions in favor of systematic programs and projects within the fixed priorities of

corporate social responsibility. Finally, integration means that the principles of corporate social responsibility

permeate all business processes and decision-making at all hierarchical levels.

10
 The group of significance consists of the principles of relevance, scale, and efficiency. As to the

principle of relevance, the programs of CSR should be timely and in demand. The principle of scale

presupposes that the programs of CSR must cover a considerable audience and be noticeable for society as a

whole. Finally, according to the principle of efficiency, the means expended for implementation of the

programs must help to solve the problems, and the results of the programs are subject to regular assessment

and record.

The group of conflict avoidance includes the principles of political non-engagement (not participating

in electoral races or supporting political parties or individuals), distancing oneself from the church (refusal to

support clergy, churches, individual confessions, or religious movements), refusing to support nationalist

movements, and withdrawing from fan clubs.

The company has the right to call itself socially responsible, which means that the company acts in

accordance with the principles of social responsibility and implements a set of social programs in its priority

areas. The social activity of the company is expressed in carrying out a variety of social programs both internal

and external orientation. The distinctive features of social activity programs are their systematic nature,

voluntary nature, and connection with the company's development strategy and mission.

11
 CSR in Europe

In European countries, CSR has long been an integral part of both supranational and national policies.

However, since the 1990s, the approach and understanding of CSR have altered considerably. Until then,

guided by the principles of the "welfare state", the governments of most European countries had been setting

standards to protect employees' rights, labor and environmental safety, social security, etc. In addition, the

compliance of businesses with these norms was mandatory. On the one hand, this led to many positive changes

in living standards and quality of life. However, on the other hand, it also destroyed any incentives for

businesses to voluntarily undertake any additional social responsibility, thus undermining the fundamental

principle of CSR, namely the exclusively voluntary nature of programs.

Nevertheless, under the influence of increasing environmental and corporate scandals related to large

multinationals and intensifying competition, European businesses were increasingly drawn into CSR in the

modern sense. Initially, CSR was limited to the obligation for companies to invest part of their profits into

social and environmental projects. However, gradually, such a narrow interpretation was abandoned: annual

CSR and sustainability reports became an integral part of the management and reporting system, and CSR

principles became part of the general management of companies.

Hence, like many processes in the EU, the modern system of CSR system is the result of collaborative

efforts of businesses and supranational integration institutions. At the supranational level, the beginning of the

European CSR system was in 2001 when the European Commission published the EU Green Paper "Creating a

European CSR System" dedicated to the definition and concept of CSR (O'Riordan & Fairbass, 2008). Already

in 2004, the first report on CSR development based on this document was published.

This document comprises the main instruments of CSR, which are still relevant and supported by the

European Commission. These instruments include good business practices, environmental protection, the

12
development of local communities, responsible practices for consumers, and responsible personnel practices.

Besides, the document allows to identify four main areas of CSR, namely activities related to participation in

the life of communities and their development, activities related to the environment, activities related to

suppliers, consumers and competitors, and activities related to personnel.

Since 2002, the EU has been organizing international CSR forums, and the interest in this topic has

been growing every year. Thus, if the first forum was attended by 50 reputable stakeholders from businesses,

non-profit organizations, and consumers, in 2015 their number was more than 450 (Brin & Nehme, 2019). In

addition to European law, supranational factors contributing to the development of CSR in Europe include

such initiatives of international organizations as the UN Global Compact, OECD recommendations for

transnational corporations, the World Bank's Responsible Business Development Program, and others.

At the same time, European business and nonprofit organizations were actively developing CSR ideas

and practices from "below". In 1995 the Social Platform which was an organization uniting 40 European

nonprofit organizations was created. The main goal was to develop the social dimension of the European

Union and create an all-round developed society. Moreover, in 1996, the European business community

established the CSR Europe network, uniting about 60 transnational corporations. Further, in 2006, a European

CSR Alliance that comprised 32 companies and 26 business associations was created. The European CSR

Alliance supports the existing CSR programs and initiates new ones (O'Riordan & Fairbass, 2008).

While examining the European CSR practices at the national level, it is possible to find out some

commonalities between European companies. For instance, the most widespread areas of CSR for all EU

countries are employment, education, and health care. Typically, the European CSR focus is on consumer-

oriented industries such as food and pharmaceutical industries, retail, etc. At the same time, it should be

underlined that different countries demonstrate different CSR practices. For instance, companies from different

13
countries may have diametrically opposite approaches to the choice of tools and the scope of CSR programs.

Even though many researchers have repeatedly attempted to identify various national and regional CSR

models, there is no single classification of approaches. It is worth noting that, in practice, different approaches

to CSR may be combined in a single region or even a country and for this reason, it is useful to present at least

two typologies of CSR. The first one is based on geographical and cultural-historical principles while the

second one is based on the role and scope of state participation.

Under the first typology, the three models of socially responsible business behavior can be

distinguished, namely German, Anglo-Saxon, and Swedish (Brin & Nehme, 2019). Countries that opt for the

German model can be characterized by maximum social interaction. To make it clear, they actively involve all

the parties interested in the activities of the corporation in decision making and such participation doesn't have

to be direct. The main goal is to take into account the interests of the maximum number of interested

companies and persons. While observing the principles of the market economy this model implies the

participation of the company in the reduction of imbalance of welfare of different strata of population and

provision of social justice. An important distinguishing feature of the German model is the high degree of

government intervention in social and labor relations (Katharina, 2014).

The peculiarities of this model can be most vividly described by the example of Germany. Although the

leading role of the state as the institution that sets the vector for the development of socially oriented programs

in the country is preserved, industry associations and business unions play an important role. An example can

be the German Business Sustainability Forum "Econsense" which brings together leading companies that are

not necessarily German and some of these companies are Lufthansa, BASF, and Daimler (Bauer, 2018). In

addition, unlike some other wealthy European countries, the experience of Germany, as well as any other

country that opts for the German model is at least two centuries old. Thus, already at the time of the foundation

of Bosch company at the end of the 19th century the importance of considering the interests of employees,

14
consumers, and society in doing business was emphasized, and the company follows these principles until

now. A more recent example can be BASF's experience. In declaring its mission to work for a sustainable

future, one of its four goals is to find socially and environmentally sustainable solutions. The experience of

France that also implements the German model is interesting as well. In this country, corporations are legally

obliged to publish their CSR reports, and pension funds must consider social and environmental criteria when

forming investment strategies.

The Anglo-Saxon model is peculiar to Great Britain and as opposed to the German model, it is not

characterized by direct support from stakeholders or consideration of stakeholder interests. As to this model,

the interests of shareholders and investors have traditionally been placed above those of the other parties

involved (Brin & Nehme, 2019). The main goal of all socially oriented programs has traditionally been to

create conditions in which the maximum efficiency of all participants in the process is achieved. Therefore,

within this model, companies pay a lot of attention to professional development and retraining programs, the

creation of information networks, as well as support of any initiatives that lead to increased efficiency and

competitiveness of a particular addressee.

CSR is largely regulated by the company itself, while the role of industry associations and even the

government is limited to issuing recommendations and wishes. The government uses the taxation mechanism

as a major incentive. In the UK, tax exemptions are granted for investments made for public benefit purposes,

and what is more, charity donations are not subject to income tax.

When analyzing the scope of CSR in the UK, it can be noticed that it differs from other European

countries. For instance, while in Germany one of the most common forms of CSR is to solve the employment

problem, in the UK it is the development of local communities, and the employment problem, according to

British business, can be solved by financing retraining programs (Brin & Nehme, 2019). Special attention

15
should be paid to the system of corporate pensions established in Great Britain, which in fact shifts part of the

burden of old-age pensions from the state to private business. Traditionally, such a type of social responsibility

as philanthropy is popular within this model. All segments of the population from elementary school children

to members of the royal family are involved in this process, and the activities of charitable non-profit

organizations have long crossed national boundaries.

In turn, the Swedish model is characterized by the highest level of social responsibility. In particular,

IKEA is a leader in many ratings of socially responsible companies. However, the Swedish model cannot

always be applied in other regions. Firstly, most Swedish companies, even the largest ones, are family

businesses, and therefore, the choice of the object of social responsibility is often based on subjective

preferences of the family. Secondly, a distinctive feature of the corporate structure of Swedish companies is a

complex hierarchical structure: the family holding company controls a number of firms, which, in turn, control

the next group of companies, and, thus, all stakeholders are initially the participants of one rather closed group

(Brin & Nehme, 2019). Thirdly, the Scandinavian countries are quite small both in the territory and in the

number of populations, which increases the possibilities of "targeting" programs.

As it was mentioned earlier, another approach to the typology of CSR programs is based on the role of

the government in regulating and supporting CSR programs. This typology was first proposed by the European

Business Association and there are three models, namely a partnership model, business in society model, and

sustainability and citizenship. The partnership model is applied in Sweden, the Netherlands, Finland, and

Denmark and presupposes a partnership strategy in all areas including employment issues (Brin & Nehme,

2019). The business in society model which is popular in Great Britain and Ireland can be characterized by a

soft intervention policy directed to encourage companies to solve public problems. In turn, sustainability and

citizenship which is applied in Luxembourg, France, Belgium, Austria, and Germany presupposes a social

contract with a focus on sustainability.

16
 Hence, it can be seen that these two approaches do not exclude each other, but on the contrary, they

complement and clarify each other. It would be germane to underline that companies' choice of CSR methods

and forms is increasingly influenced not by the host country's belonging to a particular model, but by societal

expectations in the host country.

17
 CSR in Azerbaijan

Problems related to CSR

There are several factors that can be identified as causes of the unsatisfactory situation in regard to CSR

in Azerbaijan. First and foremost, it should be emphasized that there is no legislative framework to regulate the

CSR activities of companies in the country. In addition to being a stimulus to CSR activities, the legal

framework provides a basis for organizations to take special care of such activities. As a result of the lack of

legislation in this area, companies do not take social responsibility seriously and do not apply it in their work

because they do not consider it important. Apart from this, the lack of knowledge of entrepreneurs also

contributes to the slow development of this area. They are mainly interested in the financial side of the

business as well as expanding their businesses. Unfortunately, their understanding of CSR is limited to

philanthropic and sponsorship activity. Moreover, the activities of entrepreneurs are more of advertising

nature.

It should be also noted that the lack of local CSR staff also hinders the development of the sector

(Gahramanova, 2019). CSR is not taught in educational institutions in the country, and specialists are not

trained. However, this is not the only problem that exists for the training of specialists. The other side of the

issue is the lack of informative materials and books in the Azerbaijani language. One of the issues that

exacerbates this problem is that CSR companies do not engage in activities such as exchanging experiences

with each other. All this not only fail to contribute to the development of CSR but also thwart it.

CSR Legislation of Azerbaijan

As it was mentioned earlier, Azerbaijan does not have any legislative acts specifically devoted to

corporate social responsibility. However, it should be noted that certain issues related to CSR are regulated

18
with the help of various codes and laws. For instance, the issues such as regulation of employment, social

security of workers, and ethics in the workplace are within the scope of the Law on Civil Service. Moreover,

the Labor Code of the Republic of Azerbaijan should also be emphasized. This code is focused on the

employer-employee relationships and regulates issues emanating from these relationships.

The Environmental Protection Law is of special importance in terms of CSR as well. It should be noted

that this law sets rules for enterprises in regard to the protection of the environment, determines prohibited

practices, sets the threshold which cannot be passed by enterprises, and sets the punishment for the violation of

the law. The main objective of this law is to deter enterprises from environmentally dangerous activities and

inspire them to take care of the environment.

Moreover, the Tax Code also contains certain provisions about CSR. For instance, as to art. 106, of this

Code, enterprises who operate in the fields of culture, sports, health, education, and science will be exempt

from income taxes if they become involved in CSR practices described in the law (Caspian Legal Center,

2020). For each sphere the requirements are different, but it does not change the purpose of these provisions

that are directed to inspire companies to carry out CSR programs.

The Current Situation in Azerbaijan in regard to CSR

Nowadays, it is possible to observe examples of corporate social responsibility in Azerbaijan which is

undergoing a period of rapid development. In particular, taking into account that the economic development of

the country continues favorable environment is created for entrepreneurs. Business representatives earn income

and therefore, their social responsibility to the community emerges. Undoubtedly, companies and organizations

in our country are not compulsorily brought to social responsibility since there are no imperative provisions in

the legislation in this regard. However, a number of companies and organizations are currently implementing a

19
primitive form of corporate social responsibility. For example, companies are content to help low-income

members of our society on various holidays or important days. Some of these companies are Azersun Holding

and Veylesoghlu. However, taking into account that the demands of the globalizing world expand the areas of

corporate social responsibility of companies operating in Azerbaijan must change.

In his speeches, the president of the Republic of Azerbaijan Ilham Aliyev repeatedly stressed that social

responsibility should be taken into account, and companies should try to avoid redundancies. He underlined

that the state provides full support to businessmen and therefore, they must understand their social

responsibilities. Besides, the First Vice President of Azerbaijan Mehriban Aliyeva has repeatedly said that the

social responsibility of Azerbaijani companies and businesses involved in the implementation of major

infrastructure projects should increase, and business circles should participate in social projects.

It is noteworthy that Azerbaijani companies can see a real example of social responsibility in the work

of the Heydar Aliyev Foundation. More specifically, the Heydar Aliyev Foundation implements the basic

principles of corporate social responsibility, solves social problems, and implements projects to improve

people's living conditions, education, and health. Thanks to the initiatives of the Foundation, orphanages,

kindergartens, schools, residential buildings, health centers, treatment centers for dangerous diseases, cultural

centers for young people deprived of parental care, and graduates of orphanages are being built.

20
 Part 2

Pasha Holding

Pasha Holding is a company that can be identified as one of the leaders in the field of corporate social

responsibility. This holding consists of several subsidiaries and each of them carries out various activities

related to CSR. The main characteristic of Pasha Holding is that CSR activities of the company are

implemented in different directions including charity, care about the environment, public health, and care about

employees.

For instance, in 2018, Pasha Insurance within the framework of CSR program named "Yaşıl Bakı"

carried out an ecological action for planting trees in the capital to celebrate International Earth Day. Pasha

Insurance employees, as well as the customers of the "Yaşil Bakı" insurance product, took active part in

planting trees in the territory of Shikhov settlement. During the event, more than 200 trees were planted (Pasha

Insurance, 2018).

In 2019, in order to support low-income families and develop education, Pasha Insurance and Pasha

Holding implemented the "First-Graders" project in the regions of the Republic of Azerbaijan (Pasha

Insurance, 2019). Providing first graders from disadvantaged families with school uniforms and school supplies

under the corporate social responsibility project is a traditional action of Pasha Holding. The action that took

place on the threshold of the new school year in 2019 was directed to help more than 700 future schoolchildren

in 7 regions of the country (Pasha Insurance, 2019). Events with the participation of the representatives of

companies and state agencies were held in Terter, Balaken, Zagatala, Gakh, Sheki, Oghuz, and Gabala, and

children were provided with gifts. A magician illusionist shows, and other interesting quizzes were also

organized to create a festive atmosphere for each child entering a new stage of their life.

21
 Moreover, in 2020, Pasha Holding allocated 7 million manats to support the "Biz birlikdə güclüyük"

campaign initiated by the Heydar Aliyev Foundation and the "Regional Development" Public Association. The

project is aimed at providing food aid to more than 200.000 low-income families and representatives of other

vulnerable groups under the slogan "We are strong together".

As the COVID-19 pandemic situation started to exacerbate both nationally and globally, Pasha Holding

has focused much of its corporate social responsibility efforts in this area. Since the beginning of the summer

of 2020, the company has been involved in supporting the construction of additional modular hospitals in

Gabala and Gobustan, as well as providing the Hematology Center with the necessary medical equipment and

medications. In addition, in order to reduce the negative impact of the COVID-19 pandemic on the health

system of the country, the companies of Pasha Group financed the arrival of 115 doctors and medical

personnel from Cuba.

It should be noted that Pasha Holding has always paid special attention to the vulnerable segments of

the population. Thus, from May to July of 2020, the company organized training courses for university

entrance exams for applicants from low-income families, together with the Bravo supermarket chain provided

food for needy families and rendered financial support to the BOCCIA Sports Federation of the Disabled.

Apart from this, Pasha Insurance participated in a social project called "Growing up without fear" aimed at

settling family, women and children’s issues.

In June 2020, Pasha Holding always known for its innovative approaches, in cooperation with the

Center for E-Government Development organized a training for journalists aimed at raising awareness of the

"E-Government". The company also financed the publication of the book "Ours Abroad", which reflected the

stories of our compatriots who have achieved great success abroad.

22
 In 2021, Pasha Holding and its subsidiaries continue the activities of corporate social responsibility.

Since the beginning of the year, one of the main directions of Pasha Holding's activity was to support

rehabilitation activities in the liberated territories, as well as to support the victims of the Karabakh war.

Therefore, four subsidiaries of the holding, namely Pasha Bank, Kapital Bank, Pasha Life Insurance, and Pasha

Insurance donated 2 million manats to the Karabakh Rehabilitation Fund. Besides, in order to deliver the truth

to the world community, Kapital Bank has financed the production of a short documentary film "Return" based

on true events, describing the hard but proud feelings of the Azerbaijanis forced to leave their homes during the

First Karabakh War. (Haqqin.az, 2021)

For the same purpose, For the same purpose, Pasha Bank and Pasha Life in cooperation with

BeləBeləIşlər Media Company supported the production of video clips dedicated to the religious and cultural

heritage of Azerbaijan, the history of Karabakh, as well as the martyrs of the Karabakh war. The "Red Hearts"

Charity Foundation, established under Kapital Bank, continues its activities dedicated to Karabakh in the post-

war period. Together with an international community consisting of a group of professionals living abroad and

in Azerbaijan, the Bank and the Foundation organized an online event called "Voice of Karabakh". All

donations and humanitarian aid collected during the event were delivered to the respective addresses through

the "Red Hearts" charitable foundation.

The companies also implemented social projects in other spheres. For instance, it is noteworthy that

from the beginning of 2021, Pasha Insurance continues regular donations to the SOS Children's Village.

Thanks to the financial support of Pasha Holding, the unused office premises of SOS Children's Village in

Ganja were renovated and turned into a library for the community and residents of the village. At the same

time, the "Birgə və Sağlam" Public Association implemented the "Autism Volunteers" project with the

financial support of Pasha Holding. This project involved young volunteers, wishing to devote their future

23
careers to work with people with autism and the volunteers received the necessary knowledge and skills in this

field through the event.

In turn, Kapital Bank together with the "Red Hearts" charitable foundation has implemented the project

"Everything is possible!". The main objective of this project was to organize various trainings for children with

Down syndrome who are in the care of low-income families. Until April 10, 2021, users of the BirBank mobile

app had an opportunity to make donations for the rehabilitation of people with Down syndrome. (Haqqin.az,

2021)

Most of the projects carried out in March 2021 were holiday related. For instance, Kapital Bank

implemented the project "Women of Azerbaijan" on the occasion of March 8 - International Women's Day,

within which they developed a portal with interviews with famous women-entrepreneurs of the country and

shared it on social media. In turn, Pasha Bank undertook to give a prize of 10000 AZN to the female

participant, who represented Azerbaijan at the official Ironman competition, in case she completed the distance

in time and won the Ironwoman title (Haqqin.az, 2021).

In addition, the employees of Pasha Bank visited the elderly people living in Sumgait on March 18,

2021 and made them happy with the gifts. Within the frame of this charitable initiative jointly realized with the

Red Crescent Society of Azerbaijan 50 families were visited. On the eve of Novruz, Pasha Insurance and Pasha

Life conducted a similar campaign. Moreover, Pasha Life visited the families of martyrs and delivered them

holiday gifts. (Haqqin.az, 2021)

It should be noted that the financial subsidiaries of Pasha Holding functioning abroad also pay special

attention to the activity in the sphere of social responsibility. For instance, on March 21, 2021, Pasha Bank

24
Georgia joined the tree planting project organized by the Ministry of Environment and Agriculture of Georgia.

(Haqqin.az, 2021)

25
 Azercell

Azercell is a mobile operator the CSR strategies of which are based on long-term values. The corporate

culture of Azercell is permeated with the idea to organize various projects directed to solve environmental and

social issues. One of the main contributions of Azercell is the establishment of a charity organization named

"Azercell Volunteers". This organization is run by the employees of the company who provide help to

retirement homes and boarding schools for more than a decade and a half (Azercell, 2021). Members of

Azercell Volunteers are also involved in fundraising activities with the purpose to collect money for the

treatment of children with serious diseases. Apart from this, one of the most important activities of this charity

organization was the support of Azerbaijani soldiers during the Second Karabakh War. To be more precise,

Azercell Volunteers sent 420 boxes to the front and these boxes contained medical supplies, blankets, clothes,

and letters containing best wishes.

On May 20, 2008, Azercell together with the Alliance of Azerbaijani NGOs for Human Rights and the

UN Children's Fund (UNICEF) organized a conference named "Investment in the Future" dedicated to the

development of corporate social responsibility in Azerbaijan. The forum, held with the support of the Ministry

of Economic Development was attended by heads of large companies operating in our country, representatives

of NGOs, the diplomatic corps, and international experts. At the opening of the conference, the Vice President

of Azercell Ali Agan emphasized that CSR is essential for improving the well-being of society. During this

event, various topics related to CSR, namely the role of business in solving social problems, employers'

responsibility in the elimination of child labor, position of mass media in the development of corporate social

responsibility, and role of business in the fight against corruption was discussed.

It should be emphasized that Azercell takes an active part in the fight against the coronavirus infection.

Based on the initiative of the Ministry of Transport, Communications and High Technologies of the Republic

of Azerbaijan, in 2020, the company sent a monthly gift balance of 50 AZN to the mobile numbers of around

26
700 medical workers, standing in front of our nation in the fight against COVID-19. Azercell has donated 1

million AZN to the Coronavirus Response Fund. Moreover, the company has created an opportunity for its

customers to donate to this fund as well (Azercell, 2021). The other initiative was directed to ensure the

protection of the cohort of people who are 65 or older. Taking into account the government restrictions that do

not allow them to leave homes, the company made its mobile customer services free for clients who belong to

this cohort. Besides, in the pandemic period, the tandem of Azercell and the "Regional Development" Public

Union sent gifts to more than 5700 needy Azerbaijani families (Azercell, 2021).

The other laudable CSR initiative of Azercell consists in providing children of the martyrs of the

Karabakh war with a scholarship paid on a monthly basis. The monthly payment is 300 AZN which will be

paid until the moment of the graduation of these children (Azercell, 2021). Additionally, first-grader children

of martyrs were provided with necessary school accessories as well as tablets. Besides, Azercell also

implements other activities directed to support the educational field and inspire students to gain knowledge.

One of the CSR campaigns presupposes giving tablets to 10 university entrants who have got the highest score

at the entrance exams. Azercell also supports Paralympic sports and closely cooperates with Children's

Paralympic Committee and finance various events organized by this Committee.

27
 Bakcell

Bakcell is one of the Azerbaijani companies that have a clear CSR vision. To be more specific, the

company identifies itself as a part of the Azerbaijani community and therefore, constantly comes up with

different CSR initiatives. All the CSR programs are directed to get closer to customers as well as to pay back to

the community.

At the end of 2009, Bakcell came up with a CSR initiative named "My Dream SMS". The major

objective of this initiative was to realize the dreams of children from four orphanage houses. Initially, children

were asked to mention what exactly they wanted to get as a present for the New Year. Afterward, all the

wishes were collected, and all the necessary presents were purchased. On the eve of the New Year, Santa Claus

visited these orphanage houses, and children deprived of the parental care presents that they wished to have.

In 2010, Bakcell initiated an SMS campaign the main objective of which was to support the expansion

of the SOS Children's Villages project. During 14 days, customers of Bakcell had an opportunity to donate to

this project by sending an SMS to 1155. The initiative included an event organized by the company in the

Azerbaijan State Theater of Musical Comedy. During this event, both the dance group and the choir of SOS

Children's Villages showed their performance on the stage. The concert was devoted to the International Day

of Peace and was named "Children call for peace".

Besides, in 2017, together with UAFA, Bakcell continued the realization of the project named

"Communication via Art". During 2017, more than 110 kids with disabilities obtained new skills as a result of

attending study groups. Undoubtedly, this initiative has made a big contribution to the development of these

kids and their appropriate integration into society. Rehabilitation Centers of UAFA are located in Khachmaz,

28
Ganja, and Yasamal district of Baku city. Thanks to these centers, children with disabilities got an opportunity

to realize their potential.

One of the biggest CSR projects not only of Bakcell but also of the entire Azerbaijani business world is

the program named "Bakcell Stars" which was launched in 2009. The program is primarily devoted to children

with special needs and its main objective is to support such children and create all the necessary conditions for

their bright future. Bakcell is convinced that these children deserve to have equal opportunities with other

children and therefore, organize different events to help children with disabilities, children from orphanage

houses and boarding schools as well as children from low-income families. For instance, within the framework

of "Bakcell Stars", an event devoted to the international day of children was organized for children with special

needs in June 2019. Overall, 200 kids took part in the event that included entertainment activities as well as

competitions held among children. The winners of the competitions were given gifts.

Besides, it should be underscored that Bakcell also supported wounded soldiers and families of martyrs

who died during the Second Karabakh War. The company has donated 1.2 million AZN to the "Yashat"

foundation. Apart from this, the employees of Bakcell organized visits to 30 families of martyrs and financially

supported them.

It should be emphasized that Bakcell has won many awards for its CSR initiatives. Suffice it to say that

only in 2019, the company won two awards. To be more precise, the first award was "Milli KSM Mükafatı

2018″ which was given to the company thanks to its project named "Start and Improve Your Business". This

CSR initiative was carried out in tandem with SOS Children's Villages Azerbaijan had a purpose to encourage

young entrepreneurs. Moreover, on June 4, 2019, Bakcell was honored in the category "Corporate Social

Responsibility" at the event held by the Ministry of Economy of the Republic of Azerbaijan, National

29
Confederation of Entrepreneurs Organizations of Azerbaijan, and the Agency for Development of Small and

Medium Business of Azerbaijan.

30
 Azercosmos

Being the sole satellite operator in the region of Caucasus, Azercosmos constantly comes up with CSR

initiatives. Despite the fact that the company was established in 2010, the first CSR initiative took place in

2014. More specifically, on November 19, 2014, the blood donation campaign took place and the majority of

the employees of the company voluntarily partook in this event (Azercosmos, 2014). Apart from the employees

of Azercosmos, the representatives of Azerpost LLC also took part in this campaign. The major aim was to

help individuals that have blood diseases. The participants of this campaign were informed that blood donation

positively affects the immune system of the donator. It should be noted that such blood donation campaigns

became traditional for the organization. For instance, in 2015, a similar campaign with the motto "Donate

blood and save lives" was initiated by Azercosmos. That campaign was devoted to New Azerbaijan Party that

had the 23rd anniversary (Azercosmos, 2015). Additionally, it is noteworthy that identical campaigns took

place in May of 2017 and 2018 and were dedicated to the anniversary of Heyder Aliyev who is also known as

"the father of the nation". In turn, in 2019, this campaign was organized twice, namely in June and in

December. The earlier campaign was devoted to the National Salvation Day of Azerbaijani people while the

one in December - to the anniversary of the death of Heyder Aliyev.

Moreover, in March 2020, Azercosmos has made its contribution to the struggle against the COVID-19

pandemic that took away the lives of hundreds of Azerbaijani citizens. To be more specific, the company

donated 200000 AZN to the Coronavirus Response Fund which was created based on the decree of President

Ilham Aliyev with the purpose to protect public health (Azercosmos, 2020). Besides, after the end of the

Second Karabakh War, the employees of Azercosmos stepped up with an initiative to make monthly donations

and once a month visit the families of martyrs or soldiers who have got disabilities as a result of military

activities in Karabakh.

31
 BP Azerbaijan

BP Azerbaijan is also committed to its social responsibilities and advocates the idea of a sustainable

society. The company started the operation in 1992 and since then, it carries out different CSR activities. It

should be noted that in 2002, the Community Investment Program (further CIP) was adopted by the company

and the main objective of this program was to initiate activities directed to tackle socio-economic problems. In

2002, the first big project was carried out within the framework of CIP. It was the project named Sangachal

Terminal Expansion Programme the budget of which was equal to 6.7 million US dollars (Mishin, 2014). This

project was aimed at training of Azerbaijani workforce and as a result of a series of trainings, employees were

expected to gain new skills and improve their qualifications.

Moreover, in 2006, BP Azerbaijan came up with a new project which was directed to improve living

conditions in the Bibi-Heybat area. To be more precise, with the help of the financial help of BP Azerbaijan,

one hospital was constructed, a culture center and two schools were refurbished, and the electricity supply

system was restored (Mishin, 2014). Furthermore, the company initiated the establishment of agricultural

service centers in different regions of Azerbaijan including Ujar, Kurdamir, Samukh, and Agstafa. The main

objective of the establishment of these centers was the provision of farmers with input products necessary for

agriculture and with information. Suffice it to say that experts helped more than 2500 farmers with advice

(Mishin, 2014). Besides, in 2011, several CIP projects were implemented in Aghdash, Ujar, and Kurdamir and

the primary goals of these projects were to increase the income generation capacity of the local communities

and expand economic opportunities of the local population. For example, 14 individuals were provided with

the necessary funding in order to initiate their business projects (Mishin, 2014). The company also held

educational trainings which were aimed at upgrading the skills of the inhabitants of these regions.

It is also necessary to point out the agreement of the European Bank for Reconstruction and

Development and BP Azerbaijan according to which the company has undertaken the obligation to provide the

32
private sector with financial support. Suffice it to note that only in 2005, BP Azerbaijan spent more than 310

million US dollars on Azerbaijani-based enterprises. Besides, it would be pertinent to emphasize that thanks to

the micro finance programs of BP Azerbaijan, four Azerbaijani companies, namely Student Travel

International, Rapid Solutions, AzMetco, and Debet have managed to increase the number of their staff

members twice (Mishin, 2014).

One of the most successful CSR projects of BP Azerbaijan was "Sweet Gold" which was launched in

March 2017. In the beginning, it was planned to choose 100 individuals from Shamkir, Samukh, Goranboy,

and Yevlakh regions and help them to succeed in small farming and beekeeping. To be more specific, these

individuals were trained, provided with necessary consultancy and equipment. In 2018, it was decided to

prolong the program for three more years and what is more, Tovuz and Aghstafa were also included in the

program. In these three years, it was planned to provide more than 400 new individuals with the necessary

facilities and knowledge. In April 2021, the project was finalized, and all the objectives were attained. As a

result of the implementation of the project, 532 families from five regions of Azerbaijan have obtained the

knowledge and equipment necessary to run their beekeeping business. For instance, individuals have obtained

more than 6000 active beehives which allowed them to get 75 tons of honey. During the period between March

2017 and April 2021, BP Azerbaijan spent more than 1.4 million US dollars for the realization of the "Sweet

Gold" project (British Petroleum Azerbaijan, 2021).

It should be pinpointed that only in 2020, BP Azerbaijan invested approximately 4.3 million US dollars

in different social projects (British Petroleum Azerbaijan, 2021). One of these projects was "Yuksel" which

was directed to help the representatives of the youth to acquire or enhance their skills and redound to the

realization of their professional goals. The company invited various famous Azerbaijani people to lead

workshops and share valuable knowledge with young people. Additionally, BP financed the translation of ten

important textbooks from English to Azerbaijani as well as their publication, these textbooks were about

33
different subjects including ethics, political science, management, banking, human resources management, and

supply chain management. As a result of this initiative, the level of education is expected to increase since

more than 16000 students from 10 Azerbaijani universities will benefit from these translated books. The other

CSR initiative of BP Azerbaijan was the sponsorship of "Innovation Week 2020" which was the event directed

to promote the startup ecosystem in Azerbaijan, support young entrepreneurs, and create necessary conditions

for the emergence of innovative ideas. The scholarship program of BP Azerbaijan aimed at teaching advanced

English to second-year students of the petrochemical faculty of Azerbaijani universities.

Moreover, BP Azerbaijan helped the country in the struggle against the COVID-19 pandemic by

donating 3 million US dollars. As a result, the Azerbaijani government purchased 100 thousand testing sets,

PRC and biochemical labs, as well as three isolation capsules designed for patients with extremely severe

conditions. Hence, this donation has significantly increased the capacity of Azerbaijani healthcare in terms of

carrying out tests. It is also noteworthy that at the end of 2020, the employees of BP Azerbaijan have made an

additional donation of 100000 AZN.

34
 Part 3

Recommendations to BP Azerbaijan

Being one of the key players in the Azerbaijani oil industry, BP Azerbaijan is involved in the

extraction, transportation, and refining of oil. At each stage of oil use, the soil, water, atmosphere, vegetation,

and wildlife are harmed, often irreparably. Extracting oil is a complicated technological process since it lies in

the depths of the subsurface. Special solutions are used by the company to drill wells: employees clean the

bottomhole from the particles of crushed rock, lubricate the borehole and prevent collapse. However, the

problem is that various chemicals are added to the composition, which is dangerous for the environment. The

drilling process is accompanied by the formation of a mixture of rock and mud. This cocktail most often

contains petroleum products.

Moreover, in order to prevent leakage, the wastes are accumulated in the so-called sludge pits.

However, the main issue that the oil industry has not solved yet is how to deal with these wastes. The main way

to neutralize the pits, namely filling them with sand does not provide one hundred percent reliable

environmental protection of waste burial sites. Therefore, it can be observed that the extraction of oil is

accompanied by damage to the environment. Undoubtedly, BP Azerbaijan harnesses modern technologies in

order to minimize that harm, but that does not change the fact of the pollution of the environment.

It is also noteworthy that as a result of refining petroleum products, a huge number of hazardous

substances are emitted into the atmosphere every day. However, the most dangerous waste of the oil complex

is the oil itself since its leaks can occur at all stages of oil use. Oil storage tanks, pipelines, and cisterns are all

potential sources of spills of poisonous raw materials.

35
 Hence, it would be more appropriate for BP Azerbaijan to carry out CSR activities directed to either

protect the environment from pollution or clean it. For instance, one of such programs can be the campaign

named "Clean Caspian Sea" the main objective of which will be a refining of the water in the Caspian Sea.

Such a campaign will be appreciated by the community due to several reasons. First and foremost, BP

Azerbaijan is directly involved in the pollution of the Caspian Sea taking into account that a substantial part of

oil is produced there. In this regard, the refining campaign will be a beautiful gesture directed to redeem. What

is more, pollution of the Caspian Sea is one of the urgent ecological problems as a result of which, biodiversity

loss occurs. Thereby, the initiation of such a campaign will show that BP Azerbaijan cares about the

environment.

The other option of CSR initiative in the environmental sphere can be the organization of tree planting

campaigns in the newly liberated Karabakh territories. Such an idea serves several purposes at the same time.

Firstly, such a campaign will provide the employees of BP Azerbaijan to directly participate in the

rehabilitation of Karabakh. In addition, due to the barbarian conduct of Armenians who cut trees on a constant

basis (even when they were leaving the occupied lands), deforestation has become the major ecological

problem of the Karabakh zone. Therefore, planting trees will be helpful to tackle this issue and what is more,

deal with the problem of air pollution.

Moreover, BP Azerbaijan is highly recommended to carry out CSR activities that will be somehow

related to the culture of the Azerbaijani people. To put it otherwise, certain CSR initiatives need to be directed

to the satisfaction of the cultural needs of Azerbaijanis. For instance, BP Azerbaijan can finance the

construction and restoration of mosques in newly liberated lands. Such an initiative will show that the company

highly appreciates the Islamic culture. As a consequence, it will have a positive impact on the image of the

company in the eyes of Azerbaijani citizens.

36
 The other recommendation consists in the way how BP Azerbaijan should share information about its

CSR initiatives. Despite the fact that information about the events carried out by BP Azerbaijan is placed on

the official website of the company, it is not enough for informing the community. Nowadays, people prefer to

use mobile devices and visit accounts on social media. Therefore, BP Azerbaijan should create verified

accounts on all the popular social media platforms (Instagram, Facebook, TikTok, Twitter, LinkedIn) and share

information about its CSR programs. All these programs should be accompanied by a related hashtag that will

be used on all social media platforms. Thus, many more people will become aware of the CSR initiatives of BP

Azerbaijan which will undoubtedly affect the reputation of the company in a positive way.

37
 Conclusion

All in all, it should be noted that corporate social responsibility does not mean a simple responsibility

of companies to people and society. On the contrary, it is a philosophy of the company's or organization's

principles of ensuring decent living conditions for people, preserving the overall development of society

through the protection of the environment, and passing it on to future generations, which form the basis of

social and economic activity. More specifically, Azerbaijani companies have to share a part of their income

with the society that creates this income. Businesses should voluntarily spend part of their income on social

issues and only in this way, the social burden on the state will be reduced and societal problems will be

eliminated.

CSR activities have the most beneficial effect on the business practices of companies and therefore,

Azerbaijani entrepreneurs and executives need to realize that the social expenditures they make are not just

charity, but rather a long-term investment with a large social effect. Naturally, their payback period will be

much longer, and the net present value will be lower than that of conventional investments, but the return will

not only be in monetary terms.

After the comprehensive scrutiny of CSR practices of Azerbaijani countries, it can be stated that CSR

culture is at the stage of early development in Azerbaijan. Undoubtedly, big companies are constantly involved

in CSR practices, but it is not enough for the popularization of CSR. In order to promote the spirit of CSR in

the Azerbaijani business world, legislators should adopt the relevant law. This law can be prepared on the basis

of similar legislative acts of leading countries of the world, but it should also take into consideration the

peculiarities of the Azerbaijani business environment. The adoption of such a law will stimulate not only big

companies but also small and medium enterprises to carry out CSR activities.

38
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