Would there be a need for the creation of so-called “CSR” programs if we were simply empowering our employees to fulfill a role many of them are actively seeking? Aren’t these same employees the best representatives of the communities we purport to want to help? Are we in this so-called “decision makers” forum the people best placed to make the call on where the help is most needed? For what purpose are we engaging in CSR? Altruistic reasons? Business with a heart? To defuse popular opinion that we are self serving one-track-minded profiteers? 

Harsh? Perhaps, but let’s start with reality and work our way back. What follows is my story written in my words. It’s only one opinion based on my experiences but I hope it provides food for thought to perhaps open an honest discussion. I start by congratulating everyone who made time today, whatever their personal motivation, in order to participate in making our society a fairer, more thoughtful place for everyone.

So without further ado, my story:

I work for a multinational company that has resources and budgets set for these programs, but for some reason in my eleven years of working for them I never heard of such a thing or even a department that ran this program. All I ever knew was that I can bring any suggestion to help to the table and they can either accept or decline.

It started with a simple question to my general manager: could we help a family in dire need? From that day on I didn’t hold back and thankfully neither did my employers. 

When the July 2006 War started we had many staff members who were living in Beirut’s southern suburbs and other heavily affected areas. All I knew was that the company moved them with their families to a couple of hotels in Jounieh and we were fully supporting them. A week into the war I was approached by a good friend to help him import some milk from Jordan for some 30 families in need. I remember walking into our 200 square meter office in Jal al-Dib where about 80 out of our 120 employees were trying to keep the business going. I walked in to call our operations manager in Jordan to find the milk and send it on the next truck, hopefully making it to Lebanon safely.

We managed to get the boxes of milk and I felt great. Our commercial manager asked me to see what else they needed. I called my friend back and said to him, “Bring me a list of what you need other than the milk and let’s see what we can do.” I have a daughter and know the importance of milk for a child. Little did I know that this one action was to be the start of many wonderfully satisfying and fulfilling charity-based accomplishments with my company, colleagues and, to my great surprise, customers!

I had to move to Beit Mery a week later when things got really bad and there our country manager and commercial manager started asking where else we could help. Little did we know there were about 2,000 displaced refugees coming from all over Lebanon and being housed and taken care of by the Beit Mery Foundation, who seriously needed the help since the Red Cross was overwhelmed. These 2,000 displaced were in urgent need for food and medicine. When we passed by to see first hand the conditions these people were being subjected to I knew we had to do something.

We started the next morning emailing anyone and everyone we knew from Saudi Arabia to Africa, the US and elsewhere. We raised $240,000 that fed these families until the last day of the war. And then we still had enough to buy books for 3,000 children in the South, split evenly among each religious group. The whole company was involved; every colleague who knew anyone who could help came in without us even asking them to.

What I know now, and what became ever clearer to me throughout this process, is that my fellow colleagues and I have a significant role to play in this area. My company clearly understood, and has made me understand, that we do not need any formal program to know that our responsibilities as a company extend to our civil society. We are, after all, members of that greater society. We don’t live in a bubble. And only through collective and sustained effort led by us in civil society — representatives of our communities and empowered and entrusted with funds and resources from our employers — can we really make the investment in the necessary changes to make a better future for all. This is the most self-serving and fundamentally sound long term business investment any of us will make. How, you ask? These same people we put through school, these families we lift from poverty, these people with no hope today but given hope for tomorrow are our future customers, employees, managers and potentially business owners and allies.

What we are tackling here today as companies and employees is social justice. Every child we educate and take off the street and every student we put in a university will be a potential buyer or user of our services, generating future profits for our corporations. It doesn’t matter if it is $100 or one million — everything that we do today will ensure a future that maybe, if we had a magic wand, we would all have created in an instant. But of course there is no magic wand … there is only us and what we decide to do today.

Have faith in the general good of people, trust your employees, make available the funds and work collectively to get the help to where it is needed most. Call it whatever you want but get on it and do it and involve your employees and customers. You will be surprised at just how satisfying giving really is and how many wonderful people work for you and your organization.

 As we sow, so shall we reap…

Mariana Wehbe Alem is direct sales manager of DHL Express at Rafic Hariri International Airport

Corporate Social Responsibility (CSR) initiatives aim to contribute to sustainable economic development by working with employees, their families, the local community and society at large to improve their lives in ways that are good for business and for development.

Emerging market companies usually tend to focus more on short-term cost savings and revenue gains while companies in developed countries focus more on intangibles such as brand value and reputational issues.

The rise of CSR within the financial services industry has been significant over the past five years and some banks have introduced new guidelines for exercising corporate social responsibility within asset management and credit activity (e.g. Dnb NOR, Norway’s largest banking group).

The increasing focus on CSR initiatives has also been criticized. For example, Milton Friedman and others argue that a corporation’s purpose is to maximize returns to its shareholders and not to society as a whole. Some people perceive CSR as incongruent with the very nature and purpose of business, and indeed a hindrance to free trade. Some writers are questioning the motives for engaging in CSR, including concerns about insincerity and hypocrisy. These critics generally suggest that better governmental and international regulation and enforcement, rather than voluntary measures, are necessary to ensure that companies behave in a socially responsible manner.

At BLOM Bank we, like many CSR proponents, believe that the economy exists to serve human beings and consequently all economic entities have an obligation to society. We are convinced as well that a prosperous community creates a prosperous business.

CSR can improve long-term corporate profitability by enhancing the brand reputation and employee engagement. In fact, CSR plays a role in building the brand value on ethical values while enhancing the bank’s image in the community and improving the perception of the bank among its staff, particularly when staff is involved through payroll giving, fundraising activities and community volunteering. The bank also benefits from CSR by building a reputation for integrity and best practice, which improves the loyalty of its customers.

In response to those who are questioning the sincerity of CSR activities, we would recommend the rating of banks and corporations in Lebanon by specialized CSR international rating agencies and according to some indexes, among them:

• SAM, the Sustainability Asset Management agency which is the rating agency for the Dow Jones sustainable development indexes;
• “Accountability Rating”, which assesses the hundred largest companies in the world in terms of their sustainable development strategy, governance, degree of commitment vis-à-vis stakeholders and social and environmental impact;
• Indexes for assessment of CSR such as the Climate Leaders Index and the Merrill Lynch Carbon Leaders Europe index.

Based on our conviction of the importance of CSR initiatives, the integration of social and environmental considerations into BLOM Bank’s business has increased during the last five years and CSR is now an integral part of our bank’s corporate culture and fundamental business principles. By supporting charitable causes, educational programs, sports events, environmental projects and cultural events, BLOM Bank seeks to help people achieve their goals and to improve the quality of life of all its stakeholders.

BLOM Bank’s annual budget dedicated to CSR programs is growing every year in parallel to the growing needs of our society at large and to the local and international expansion of our bank, which is now present in ten countries in Europe, the Gulf and the Middle East. As BLOM is growing internationally, we strive to maintain a local presence in each market. For this reason, decisions regarding CSR initiatives in each country are put in the hands of members of the local general management who know better where the bank’s CSR activities can make the biggest difference.

BLOM Bank CSR culture starts with an ethics code and training for employees, which aim to help them make ethical decisions when the answers are not clear and thus increasing employee loyalty and pride in the organization. Another aspect of this culture is the implementation of a corporate governance code and rules.

Our main CSR activities are:

• Sports: We are the exclusive Platinum sponsor of the BLOM Beirut Marathon for the fourth year in a row.
• Environment: We are one of the major contributors to the Green Lebanon Book, whose revenues are dedicated to increase forestry and green areas in Lebanon.
• Health: We contribute to many NGOs active in this field such as the Red Cross, the Jaipur Foot Project, and The Children’s Cancer Center in Lebanon, which receives monthly donations from BLOM employees.
• Education: We donate scholarships to various schools and universities.
• Cultural activities: We contribute to many art and musical festivals in Lebanon.
• Contributions to NGOs: among these are Caritas, SKOUN, Islamic Orphans House (Makassed), Sesobel, Lebanese Autism Society, Ajyaluna, Enfants de Lumière, SOS Children Village and Cedars for Care

At BLOM Bank, CSR initiatives have become an integral part of our culture. We want the institution to look like a major player in the welfare of our community, the economic development of the country and enhance, through CSR initiatives, the peace of mind of all our stakeholders.

Gladys Younes is manager of communication & investor relations at BLOM Bank

Governments have specific functions: they are supposed to preserve and ensure law and order, properly represent the interests of their countries — both nationally as well as internationally — and most importantly, provide public goods and services to their people. One of the results of the different waves of globalization in the past decades is the outsourcing of government functions to different national, regional and international actors. Today, international peacekeepers are stepping in when a government fails to maintain its monopoly on the use of force. International judges are now capable of prosecuting national politicians for their abuse of power. After decades of expanding their public sectors and being the main economic agents, governments have transferred the responsibility of the provision of public goods to the private sector and assumed a more indirect regulatory or administrative role.

Public accountability occurs when during elections the people make their politicians accountable for their performance regarding the quality of service delivery such as education, health, public infrastructure and even the creation of job opportunities and ensuring reasonable economic performance. The privatization of the provision of public goods, in many countries, left private sector companies responsible for the quality of service delivery and restricted the role of governments to an oversight or regulatory one. As a result, this shift in responsibility from governments to corporations forced the latter to commit to a certain ethical corporate conduct. At the same time, corporations became aware that they are partners in development; hence they also became responsible for integrating business objectives with social development dilemmas.

In other words, Corporate Social Responsibility (CSR) is the product of the upgrade in profile and responsibilities of companies, particularly multinational ones, which set out to prove that good capitalism does indeed exist and business and sustainable development can be reconciled.

If the corporate responsibility movement is an attempt to ensure that businesses are essentially linked to the community and positive business and communal relations can be successfully developed, then this movement in Lebanon faces serious structural obstacles. After all, Lebanon is a confessional country whose society is highly divided. The confessional nature of the Lebanese state distorted the forms of national association and prevented the development of a unified national identity, which subsequently comes second to sectarian and family interests. Any identity, however, based either on socio-economic factors or ideology can be easily overridden by primordial identities. In other words, in Lebanon there are many communities and most of these communities do not represent socio-economic interests but rather sectarian ones. So, if corporate responsibility aims at strengthening the business communal relations, then in Lebanon the challenge is to identify which community, or communities, corporate responsibility should target.

The structure of the Lebanese private sector, dominated by small and medium-size enterprises (SMEs), most of which are family-owned, is yet another obstacle for improving corporate responsibility. Due to their size and spheres of influence SMEs have limited capacity to invest in corporate social responsibility and implement modern corporate governance principles. At the same time, SMEs are localized and even if they have better understanding of the local cultural context, they might risk being dragged into the mud of Lebanese communal divisions and competition between different communities. The complex structural make-up of Lebanese society therefore negates any benefit from implementing CSR. 

Another obstacle towards improving corporate responsibility in Lebanon is that the separation of the public and private spheres is impossible. Politicians in Lebanon are often businessmen at the same time. Historically, the Lebanese political elites have been composed of landlords, bankers, merchants, representatives of traditional families and professionals (mainly lawyers). This class has enjoyed access to state resources, to private and commercial financing and has been occupying seats in the legislative, executive and judiciary institutions. Perhaps there is no better example to illustrate this then to look back at the private sector contribution to the reconstruction of bridges and infrastructure that were destroyed during the 2006 Israeli war on Lebanon. Several businessmen committed to the reconstruction of bridges. However, it is important to note that most of these projects coincided with those businessmen’s regions of either influence or at least interests.

Any discussion about the importance of strengthening the corporate social responsibility movement should be synchronized with the other campaigns that aim to improve accountability, transparency and good governance in Lebanon. Corporate responsibility functions better in an environment where a strong legal system prevails and oversight institutions, protected by a democratic electoral law that has a clear ceiling on campaign spending, are fully developed. Proponents of CSR in Lebanon should also lobby to make the Lebanese economy more competitive by adopting anti-trust legislation, ensuring consumer protection, modernizing the tax system and enforcing conflict of interest regulations. Finally, and perhaps most importantly, the campaign to promote CSR should not disregard Lebanese civil society organizations’ initiatives to strengthen citizenship and reinforce social cohesion.

Dr. Khalil Gebara is the Co-Executive Director of the Lebanese Transparency Association (LTA)

Modern organizations are facing rising pressures to be socially responsible and sensitive to all stakeholders’ needs. The expanded global reach and influence of corporations coupled with rising governance failures, particularly in developing countries, have brought the concept of corporate social responsibility (CSR) center stage. The traditional focus in the CSR debate has been on the private sector, shedding light on its pivotal role and responsibility in leading the CSR movement. Nevertheless, in view of the immense complexity and magnitude of challenges in today’s global environment, promoting social development surpasses the sole responsibility of private corporations acting alone. In fact, even when corporate-led CSR initiatives are truly making progress in promoting development, there will still be gaps to be filled by other community actors. Thus a broader approach to CSR is needed, capitalizing on the active involvement, leveraging of resources and collaboration among four key actors namely the private sector, core governance institutions, the non-governmental sector, and the scientific and research community. This calls for a new definition and understanding of roles, boundaries and responsibilities of different community actors, and the exploration of innovative collaborative modes of dialogue and interaction among them for broader and deeper CSR impact.

Main issues

Corporations today are playing an increasingly influential role. The globalization process has allowed them to increase their reach and find new opportunities, but it has also created many major challenges, through magnifying the scope of their social, economic, and environmental impact. Competitive pressures, unfamiliar risks and growing social expectations are creating all kinds of new leadership challenges. The expansion of the global reach of the private sector has been coupled with increasing expectations of improved corporate conduct. The globalization process has further led to the exposition of national and global governance gaps, for which progressive companies are increasingly expected to compensate. All these drivers have undermined the proposition that the success of corporations hinges on generating economic profits alone. A more holistic view and understanding of value creation prevails today, with companies focusing on long-term CSR strategies as potential solutions for challenges faced at different levels.

It is increasingly accepted that the rising societal and environmental concerns and responsibilities of today cannot be tackled by the private sector — or anyone else — acting alone. As different community parties are inextricably linked to each other, unilateral CSR initiatives would only reflect one-sided efforts and would mostly result in fragmented low-impact activities and interventions. Sustainable development necessarily entails that new governance and business models are set and innovative patterns of dialogue and collaboration explored. CSR should gradually evolve from being conceived as a “business challenge” or problem, to extend to an ever-changing system of relationships and obligations among various key social actors, including the private sector, core governance institutions, the non-governmental sector and the scientific community through mobilizing and consolidating their respective resources and competencies.

The private sector

The role of business in society today has changed significantly and we have come a long way from the era of Milton Friedman, who considered that the one and only responsibility of a business is to “use its resources and engage in activities designed to increase profits so long as it stays within the rules of the game.” The rules of the game seem to have changed and corporations are faced with changing expectations with respect to their responsibilities. The business sector has the potential and the leverage to actively play a leadership role in addressing this paradigm shift and to be the ‘game-changer’ in the CSR movement. This role will necessarily entail a number of structural, operational, and cultural adjustments, changes that are often accompanied by various and sometimes significant costs. The private sector faces in this respect the challenge of evolving beyond a legitimacy driven, public relations or philanthropic CSR approach to a more integrated and strategic approach aligned with core values, competencies, and long-term strategic objectives. This entails moving from reactivity to pro-activity in way of taking the lead and initiative on various CSR activities and finding ways to link them strategically to core competence. It also entails the upholding at all times of a critical mass of core values revolving around integrity and accountability in guiding all CSR activities and stakeholder relationships. The private sector thus needs to sustain its key entrepreneurial and innovative role in leading the CSR movement while gradually anchoring a more institutionalized and systematic orientation.

The role of governments

The state or government is the entity that should take on the responsibility of protecting the public interest at large and ensuring the realization of societal welfare. Nevertheless, trends like globalization have affected state regulation, rendering it more problematic and less centered than before. While it is encouraging that an increasing number of businesses are beginning to voluntarily embrace CSR, it is nevertheless troubling that the business case for CSR is increasingly founded on the diminishing active roles of governments. Governments have every interest in reintegrating themselves into the CSR debate, with their roles lying in the creation of an enabling environment where CSR can mature and flourish and aligning the outcomes of business activity to public policy goals. The government can thus set the overall framework for corporate social engagement, through the promotion of public sector goals and priorities and associated principles relating to respect of human rights, alleviation of corruption, private property rights, and fiscal and market incentives. Besides attending to traditional governance gaps, governments can also catalyze CSR through gentle pressure and soft regulation. The concept of soft regulation as a complement to CSR has gained support across various European governments. The UK was quick to realize that direct regulation may be counterproductive in relation to CSR, adopting instead the concept of ‘alternative to state regulation’ as comprising “all arrangements that stop short of direct government regulation enforced through the courts.” Governments should thus play a more active role in shaping the CSR agenda through a strategy of soft regulation, coupled with the deployment of awards, funding and fiscal incentives.

Non-governmental organizations

While government involvement in the current global marketplace has diminished in recent years, the 1990s witnessed the heightened interest and engagement of civil society in CSR. Various NGOs and their networks are attracted to numerous issues including child labor, sweatshops, fair trade, poor communities, toxic chemicals, oil pollution and tropical deforestation. NGOs today have gained visibility and learned to exhibit a more favorable inclination in pursuit of CSR — specifically, they have been more willing to collaborate with businesses in pursuit of common goals. NGOs can capitalize on a distinctive set of attributes in influencing companies to act with socially responsible behavior. Their adaptability, flexibility, access to information and independence allow them to identify community needs and gaps and act as intermediaries among different social groups to institutionalize change for sustainable development. While it is generally accepted that business firms are differentiated by their managerial efficiency, technical expertise, creativity, dynamism and access to finance, NGOs have expertise and knowledge in what is needed to be done in the field and are better able to reach the impoverished. Through successful collaboration, these two groups can complement each other and better allocate resources for the common good. NGOs fill an important gap in relation to CSR and their nascent interest in CSR needs to be leveraged, reinvigorated and sustained.

The scientific and research community

As new business models and management skills are needed today to help companies respond to bottom line challenges, new demands have been placed on the scientific and research community. There is a growing need for the research community to play a more direct and involved role in the field of CSR to produce and disseminate relevant knowledge. This entails remolding content and delivery and ensuring that programs are tailored to current societal trends and needs. Sustainability concepts thus need to be integrated into business education to reflect the real challenges and strategic decisions facing business managers on a daily basis. In this sense, the scientific and research community has a pivotal role to play in laying a basic ‘cognitive roadmap’, or the ‘infrastructure for CSR’, improving the supply of knowledge, skills, insights and guidelines, while also bridging the gap between the various actors, and mobilizing fruitful interactions. In its function as a neutral and credible actor, the scientific and research community indeed has the vital capacity to act as a link or communications circuit between stakeholders and alleviating the barriers that have traditionally alienated the various actors, as well as reinforcing interactions among them in pursuit of an active and constructive CSR discourse. The research community will thus have to rise to the challenge through the systematic compilation and dissemination of relevant knowledge and the integration of CSR into mainstream business education, but also in terms of liaising actors, facilitating debate, dialogue, exchange, communication and a deeper exploration and wider promotion of CSR-related issues.

The road ahead

In view of the immense diversity and complexity of the CSR landscape at the turn of the 21st century and the current fragmentation of efforts and resources, there is a growing appreciation globally of the need for collaboration. A systemic approach to CSR is indeed likely to leverage opportunities, resources, competencies and networks, supporting in turn the scaling-up of CSR activities while broadening and deepening their impact. This need is even more acute in the context of developing countries in view of the complexity and interdependence of challenges, defying easy solutions and ready consensus and requiring more innovative interactions and interventions. A more systemic approach is thus likely to go a long way in taking CSR deeper and further in the context of Lebanon and the Middle East more broadly. This will require from each actor serious consideration of CSR coupled with a positive propensity to assume responsibility while initiating change in orientation. Beyond this, it will also necessitate that, as informed and sophisticated citizens, we all do our fair share in encouraging and demanding a proactive responsible orientation from our core societal actors and institutions.

Dr. Dima Jamali is Associate Professor of Management at the American University of Beirut.