If Turkey’s corporate responsibility movement is to drive real organisational change, companies need to see that sustainability is more than philanthropy
Turkey, one of the fastest-growing emerging economies, is in the midst of major transformation. Since the 1980s, market deregulation has boosted foreign investment. The Turkish economy experienced boom-and-bust cycles throughout the 1990s, culminating in an economic crisis in 2001. Since then, structural reforms have brought political and economic stability. Now Turkey is the world’s 16th largest economy and is expected to grow at a rate of about 5% until at least 2015.
With a population of 71 million, Turkey is a huge potential market.While its economy is much smaller than the Bric countries (Brazil, Russia, India and China), Turkey’s unique geopolitical position gives it a particular importance on the world stage.
Turkey’s sights are focused on achieving membership of the European Union. While the accession process is likely to create adjustment costs and regulatory risks for business, it is expected to raise environmental, ethical, and social standards in areas such as participative democracy, anti-corruption, human rights, and the importance of civil society.
The EU is Turkey’s biggest trading partner, so there is a lot riding on getting it right. As it integrates its economy with developed countries, Turkish companies are competing on a much larger playing field. The notion that a strong sustainability profile is a competitive advantage is only just taking root in Turkey, where corporate responsibility is often regarded as synonymous with philanthropy.
Traditional values
The reasons for this lie in a centuries-old tradition.Since Ottoman times, institutionalised philanthropy, in the form of the “waqf” (a form of charitable foundation from Islamic tradition) was the main basis for the provision of public services such as education, social security and healthcare.
Waqfs generally belonged to wealthy families who used these foundations to share their wealth in the form of public goods. Waqfs are still active in Turkey today and most family-owned conglomerates in Turkey have an associated waqf. In fact, Turkish society has come to expect companies to play an active role in society, especially in education, health, culture, sports and the arts.
Sustainability and corporate responsibility have become mired in this tradition, where philanthropic donations and community involvement are seen as much the same thing. The idea that sustainability is a way to earn competitive advantage through new opportunities, new markets, and new business models, or to minimise risks, is still novel in Turkey.
“Most companies still consider CR as an add-on, not core to the business,” says Melsa Ararat, a professor in strategic management, corporate governance and business and ethics at Sabanci University and the director of the Corporate Governance Forum of Turkey.“Doing good should start with avoiding harm and understanding your full impacts and Turkish companies are not there yet. CR is still about marketing and PR.”
That view is shared by Atila Uras, manager of the UN Joint Programme to Enhance the Capacity of Turkey to Adapt to Climate Change.
“Planting some trees was enough for the private sector until the first part of this decade,” Uras says. “Then the concept of CR became more familiar and they began to understand that CR requires partnership, not just providing funds or charity work.”
He describes Turkish companies as generally following global trends – not leading them – saying that theirs is “not a strategic approach, but mostly reactive”.
But there are some signs that things are changing. The proximity to Europe, exposure to energy risks exacerbated by growth, Turkey’s reliance on external finance, and the increasing importance of sustainability globally are moving corporate responsibility up the corporate agenda.
Among the developments since 2010: the launch of the Istanbul Stock Exchange’s Sustainability Index; the first Turkish signatories to the United Nations’ Principle of Responsible Investment programme and Carbon Disclosure Project (to date, 20 companies have joined); an increase in the number of Global Reporting Initiative reports published; and a growing number of Turkish companies signing up to the UN Global Compact.
The pressure exerted from external institutions and market forces will probably continue to be bigger drivers for better sustainability practice in Turkey than either government policy or civil society.
“There is no pressure from Turkish society or government for the private sector to improve its corporate responsibility practices, and that is not likely to change,” says Serdar Dinler, president of the CSR Association of Turkey, an NGO.
Change must therefore come from within. And while there is still a long way to go, Dinler is cautiously optimistic.
“A growing number of companies recognise the competitive and reputational advantages of CR and some are implementing better practices,” Dinler says. But only a few are making it a strategic part of their business, and none are taking it to the next level by integrating CR throughout their supply chain. “In Turkey, most leading companies are at the implementation level.”
Consumer demand
Turkish society and its millions of consumers also need to drive sustainability, says Engin Guvenc, executive director of the Business Council for Sustainable Development Turkey.
“It is not only companies who should be making society aware of sustainability, consumers are also being affected. If there isn’t a demand for products produced in a more socially and environmentally responsible way, there will be less action from industry,” she says.
It comes down to changing corporate culture, she adds. “We have a culture handed down over the generations, so it is difficult to change the mindset.”
As Turkish markets become more competitive, civil rights are better respected, the legal and judicial system improves, and the intensified political and economic interaction with Europe affects social values. Against this backdrop, Turkish business has no choice but to take on a long-term perspective – and that bodes well for sustainability in Turkey.
Amy Brown, based in Washington DC, has written extensively for the International Herald Tribune on sustainability issues and was editorial consultant for the World Business Council for Sustainable Development’s 10thanniversary publication Walking the Talk. Brown is a partner in One Stone.
Turkey corporate responsibility factsheet
