SOCAR and Corporate Social Responsibility

Corporate Social Responsibility: An Age-Old Concept in Azerbaijan

Howard Bowen coined the notion of corporate social responsibility in the 1930s when he published one of the most influential books of the decade, “Social Responsibilities of the Businessman.” But the central philosophies and behaviors of this movement were present in Azerbaijan long before the concept was popularized in the West. A small, resource-rich country, Azerbaijan has long been known for its hospitality, idea-sharing, philanthropy and cultural exchange.

Azerbaijan was an important hub in the Silk Road, the vast, multi-pronged trade route between Europe and Asia. When oil was discovered and began to be exported, it became a center of innovation. Thanks to its abundant natural resources, Baku became a magnet for visitors as early as the 3rd Century.

By the 1870s, world-class engineers, entrepreneurs and inventors were seeking opportunity in Baku. The Oil Extractors Congress Council was founded to discuss mineral rights and extraction technology. Its director was Ludvig Nobel, a member of the family that would establish the Nobel Prize. That prize, of course, honors those who make contributions of “great benefit to mankind” in physics, chemistry, physiology, medicine, literature and peace. For decades a considerable chunk of the Nobel family’s wealth was generated by Azerbaijan’s oil resources, which at one point supplied 50% of global demand. The Nobel Prize is perhaps the prime example of Azerbaijan’s resources helping mankind.

Clearly, the philosophy of corporate social responsibility was alive in Azerbaijan well before the phrase was coined and began being embraced by business.

SOCAR’s Focus on Corporate Social Responsibility

Globalization has created a world in which policy, the economy and the environment have impacts far beyond countries’ borders.

As a multi-billion-dollar company with offices and projects around the world, SOCAR employs thousands of people and collaborates with many governments and organizations. Azerbaijan’s history as a hub of the Silk Road and a center for innovation have helped shape SOCAR’s view of how a business should be operated. With firsthand experience in how open, diverse and innovative practices can benefit individuals and businesses, SOCAR has made corporate social responsibility a key component of its business. The efforts are both internal and external. They affect employees, the environment, the local population and the company’s global partners.

Employees

Without healthy and happy employees, no business can enjoy sustainable growth. To attract and retain top workers, SOCAR provides them with both professional and personal development opportunities.

The company also reaches out to the local population, particularly in education. Key outreach projects include the Baku High Oil School and the Baku French School. Both institutions help develop human capital, empowering local youth by giving them skills for successful careers. On the other side of the coin, early exposure to quality education helps create a pool of talented candidates who will help all local companies, not just SOCAR.

SOCAR started the SOCAR Summer School to teach youth about business and help them plan their careers. This program, which includes a certificate program and internships, has helped acquaint youngsters with business culture in general and SOCAR’s in particular. A benefit for SOCAR is that the Summer School has helped the company identify talented youth who would make good employees.

Environment

Any natural-resources company knows the importance of the gifts from nature on which it bases its business. This is true of SOCAR, which has ratified the United Nations’ Framework Convention on Climate Change. As the company has grown, it’s committed to setting a good example for the industry. That includes adhering to ecological conventions. SOCAR created an Ecological Policy in 2008. It has been documenting its greenhouse gas emissions as a starting point for creating policies to address the issue.

The company has established partnerships with other governments and with international organizations on climate change, emissions and gas flaring. The international organizations include development banks that use their investments to foster sustainable development, including the World Bank, the Asian Development Bank and the European Bank for Reconstruction and Development. SOCAR has used its Ecological Measuring Center to assess vehicles’ impact on the environment. It has reclaimed areas long polluted by oil. And it has instituted sound waste management practices with the assistance of its Waste Management Center.

One of its crowning achievements has been construction of an Ecological Park in Baku. The park not only grows trees that will be replanted elsewhere in the city, but also promotes use of sustainable energy, including solar and wind. It has served as a research facility for the company but, more importantly, a recreational area for the public. Since the park opened, more than 574,434 trees, bushes and flowers have been planted on its 400 hectares of land.

Local and Global Efforts

SOCAR’s corporate social responsibility doesn’t stop with its employees, its community and the environment. It brings social responsibility to its dealings with its business partners as well.

SOCAR’s decision to begin developing renewable energy sources led to the company acknowledging that it needed to diversify the sources of energy that powered its operations. That meant working with other energy companies.

Although the oil and gas industry has always been competitive, SOCAR has long embraced collaboration. This cooperation extends far beyond development of renewables.

Current geopolitical realities have made it clear that diverse energy sources are a key to providing Europe with energy security. That’s why SOCAR sees an urgent need for a Southern Gas Corridor made up of three pipeline projects: South Caucasus Pipeline, Trans Adriatic Pipeline and Trans Anatolian Pipeline. The corridor will be a mega project that facilitates the delivery of gas from Central Asia and the Middle East to Europe. Over time it has the potential to double the amount of gas going to the continent. It will turn Greece and other European countries into transit nations. This will not only bolster their infrastructure and economies and develop their human capital, but also increase their geopolitical significance.

Social Responsibility Bottom Line

It’s clear that Azerbaijan has embraced corporate social responsibility long before it became a trend. As the country continues to develop, SOCAR will continue investing in its employees, the community and the environment. It will also continue engaging in corporate social responsibility outside Azerbaijan’s borders, helping create an even stronger international energy network.

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