Corporate Social Responsibility As Key Criteria For Investment Of Pension Funds In Croatia

Fierce changes in the labor department, the pressure to achieve higher flexibility and deregulation of the labor market narrow the base and coverage for retirement insurance. Longer periods of unemployment and work pursuit are already almost a rule, rather than exception, and as new technologies lower the need for real workers, it is easy to imagine the reality where economic growth will not necessarily be positively correlated with the growth on the labor market. In those conditions, the need for social solidarity and government social responsibility should be higher. Corporate social responsibility, especially the area of employee rights, serves as guidance for further growth and development of the company, at the same time taking into account the social, ecological and other components. While completing the process, one must not forget fulfilling the needs of not only the employees, but also the needs of the shareholders that will surely endorse the growth of the company, as well as the correlated increase in the value of the share that is directly stimulated by the phenomenon of corporate social responsibility. This paper elaborates on the possibility of including corporate social responsibility in the decision-making criteria when mandatory pension funds consider investing in Croatia. Within current market opportunities, those pension funds are becoming majority owners of large joint-stock companies, which creates the possibility of their crucial influence as big market protagonists in decision-making related with corporate social responsibility. This paper gives some examples from practices of pension funds in developed countries, as well as ways of including corporate social responsibility in the main flows of how joint-stock companies are run.