By Ola al Haj Hussin, Corporate Citizenship Manager, Crescent Enterprises
“Creating a strong business and building a better world are not conflicting goals – they are both essential ingredients for long-term success.”
William Clay Ford, Jr. Executive Chairman, Ford Motor Company
In the volatile world of today, businesses like never before are required to forge the development of their surrounding societies. Their role has to be comprehensive in connecting with and serving their various stakeholders including the society at large. In today’s world, an organisation needs to do well and do good at the same time.
However, the prevailing business norm still seems to indicate that companies consider corporate social responsibility (CSR) a voluntary act rather than a centrepiece of their strategy. But corporate citizenship is no longer the nice-to-have disposable add-on it once was; it is an elementary contributor to any company’s sustainability as the world grows more interconnected and fast-paced.
But corporate citizenship is no longer the nice-to-have disposable add-on it once was; it is an elementary contributor to any company’s sustainability as the world grows more interconnected and fast-paced.
The United Nations Global Compact clearly outlines the areas that can benefit from private sector involvement in its Sustainable Development Goals (SDGs) – a list of priorities outlined in the 2030 Agenda for Sustainable Development. It is encouraging to note that globally, some of the biggest corporations are stepping up to the plate, and dedicating their time and resources to address these issues, whether it is improving education and healthcare, providing water and electricity to cities, fighting human trafficking, or supporting action on climate change. A great example is ‘We Mean Business’ coalition, where big companies including Nike, Unilever, General Motors and IKEA are jointly forming goals, setting targets, and pushing for policies to battle climate change.
In the Middle East, Dubai’s Mohammed Bin Rashid Global Center for Awqaf and Endowment is a very promising platform. It has a useful interactive tool called Social Needs Map on its website, which shows an overview of some of the most predominant social needs in the Arab region, making it easy for companies to identify key development issues that their CSR initiatives should address. The availability of national and regional development frameworks also helps in avoiding duplication, creates partnership opportunities and, most importantly, provides a benchmark to measure impact.
The 2013 report by Booz&Co, titled ‘The Rise of Corporate Social Responsibility – A Tool for Sustainable Development in the Middle East,’ highlights that while CSR activities among companies in the Middle East have increased over the past decade, they are rarely aligned with national and regional development priorities. As a result, these initiatives tend to lack focus and are not comprehensive enough, resulting in an insubstantial impact on society.
There are extensive untapped opportunities in long-term strategic CSR planning and collaboration in the private sector to achieve sustainable growth and development for our societies. The private sector of the Middle East is characterised by a high prevalence – over 80 per cent – of businesses owned by families. A considerable number of them are already engaged in various charity and philanthropy activities. By adopting a more structured approach towards CSR benefiting from strategic alliances and partnerships, family businesses, no matter how small, can play a pivotal role in the social and environmental development of the region.
There are extensive untapped opportunities in long-term strategic CSR planning and collaboration in the private sector to achieve sustainable growth and development for our societies.
Such efforts must be well-designed and tackle the most pressing issues relevant to our region, such as growing humanitarian needs, youth unemployment, gender inequality in the workforce, sparsity of quality education and weak environmental management among others.
It can be argued, that making a conscious effort to align CSR strategies with the real issues affecting our societies can have a beneficial effect for the company itself. Private companies, or rather family businesses, who take genuine responsibility for the development of their environment and societies differentiate their brands, improve the private sector at large, and can garner respect and loyalty of their stakeholders and customers. More importantly, in the long term, a more systematic and collaborative approach to CSR will contribute to sustainable growth of the region’s economy, which translates into a win-win for everyone.
A good example of this is when companies collaborate with organisations that can contribute towards job creation, a national and regional development priority, by either providing mentorship, capacity building, internship opportunities or encouraging startup businesses. The value of such an initiative goes beyond addressing the unemployment challenge. It encourages innovation, connections with the market and spurs similar programs that stimulate the local economy, which in turn has a positive impact on the company’s bottom-line in the long-term.
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Other benefits of CSR as a core component of business strategy include:
- Solidifying the company’s presence and roots within the community.
- Institutionalising family business values and disseminating them throughout the workforce.
- Affirming the company’s commitment to sustainability by addressing social, environmental and humanitarian issues.
- Improving employee motivation and commitment
- Leaving a legacy for future generations that will take over the company down the line.
There is an urgent need for family firms in the region to come together, and initiate more productive and focused steps towards social investment in the environment. It is time for a shift in focus from sponsorships that are merely promotional in nature, to deeper shared value through partnerships and collaborations.
There is an urgent need for family firms in the region to come together, and initiate more productive and focused steps towards social investment in the environment.
Here are five steps that can get a company started in CSR in a meaningful way:
- Consider CSR as an essential long-term profitable investment with a focus on shared value rather than non-profitable philanthropic giving,
- Focus on specific areas based on the needs of surrounding communities and in alignment with business nature.
- Allocate a specific budget for CSR strategy that would help in achieving high impact results.
- Implement a CSR governance framework to enable decentralised and strategic decision-making.
- Build long-term relationships with stakeholders that go beyond financial profit.
Responsibility does not only lie with the private sector, however; governments also have an important role in creating a favourable environment for businesses to enhance their CSR impact. They need to foster corporate citizenship among the private sector by further encouraging the private businesses to innovate in key development sectors such as education and employment- for instance, increasing awareness, and allowing a policy shift to facilitate change. An example of a governmental policy-led intervention that created a sizeable impact on the economy is India’s Companies Act 2013, which mandates that businesses of a certain size donate two percent of their net profits to social initiatives.
With a noticeable shift towards a more holistic and fully integrated form of CSR, corporate citizenship will continue to evolve within the region. Focusing on the right areas of improvement will be crucial for businesses to contribute to long-term sustainability not only within the societies they operate in but in the regional economy and the world at large.