Explaining corporate social responsibility (CSR) in the GCC is quite a daunting task — while the definition is globally uniform, its role across the Middle East is not. Although the Levant has a lot of work to do before it can reflect the textbook definition of CSR, in comparison to the Gulf the public and private sectors there seem to be a bit more CSR-savvy. This may be quite surprising to most, as the GCC is generically viewed as more organized, better informed, and overall more up to date with the latest business trends. Think again. Yes, the oil rich countries of GCC are awash with liquidity and have a wider range of large local and multinational companies — but unfortunately most of them have turned a blind eye to the growing importance of CSR. Those companies or organizations that have not are still warming up to the idea, and those practicing CSR — few and far between — are actually setting quite a good precedent for the rest to follow suit.
Common to both regions though, is the misconception of what CSR truly means. This is largely due to lack of regional awareness and overall unavailability of in-depth research, statistics, reports, etc on the presence and progress of CSR in the Middle East. By engaging with top managers across all industries in the GCC, Executive was able to uncover the most significant issues faced by the underdeveloped field of CSR in the Gulf. Although findings indicate that CSR still has a long way to go, the private and public sectors of the Gulf are optimistic that it will start to gain momentum across the GCC. In this special report, Executive follows-up with its September special report on CSR in the Levant and examines the role, presence, as well as the issues and concerns of CSR throughout the GCC.
Defining CSR
It is important to note that while there is a widely accepted definition of CSR, its interpretation remains subjective, especially in the Middle East. Overall, CSR is defined as a concept whereby organizations consider the interests of their stakeholders including society, employees, suppliers, regulators and respective governments by taking accountability for their corporate activities and even taking a step further by creating their own CSR initiatives to ‘give back’ to and to fulfill their responsibilities to the aforementioned parties. Furthermore, CSR is the general obligation of corporations to be held accountable to all of their stakeholders throughout each of their activities, with the core aim of achieving long-term, sustainable development — be it economic, social and/or environmental. CSR in the GCC has a long way to go before fully manifesting this definition, but it possesses plenty of potential for the region to flourish in the coming years.
Understanding CSR
Known for its exceptional wealth, the GCC is having trouble differentiating between philanthropy and CSR. As a Muslim region, the Gulf is no stranger to the idea of giving — known as zakat, this culturally institutionalized notion is usually illustrated through philanthropic acts in the GCC. While the concept of philanthropy is of good nature, especially on an individual basis, nowadays it is not enough for the corporate world to get by. Most importantly, in order for CSR to truly bloom in the Gulf there needs to be a comprehensive division between zakat and CSR. The private and public sectors of the GCC equally need to understand the corporate aspect of CSR. As highlighted by the founder and CEO of H2O New Media, Steve Vaile, CSR is “very misunderstood in the UAE” as “many are still stuck in a charity mindset.”
Similarily, Mahmud Mohammed Al-Turkistani, head of the CSR unit at the National Commericial Bank of Saudi Arabia, feels that both the private and public sectors of the region “need more awareness on CSR and how it’s different from philanthropy.” CSR should not be an add-on to a company’s operations. Rather, it should be expected that all members of the private sector are responsible businesses and, most importantly, that CSR is at the core of a company’s programs and strategies. To be fair, there are some companies that understand this (see CSR Initiatives section) and who are involved in CSR. The National Bank of Abu Dhabi (NBAD), for example, consciously chose CSR “as a way to do things differently through changing our practices to improve our impact on an economic, environmental, or social level,” according to Belinda Scott, CSR officer at the bank. One way for companies to catch a similar drift is by comprehending the basic benefiting character of CSR, which is a method to properly manage business responsibly and sensitively for long-term success, and overall sustainable development. Thus, the need to make CSR synonymous with sustainable development has never been more of a necessity than it is now. The key to such progress and eventual success of CSR is for businesses, big and small, to actually believe in sustainable development through being socially responsible — it is not just the right way to do business, it is also the most advantageous. Ultimately, there needs to be a cultural change where it becomes second nature for everyone to view business from this perspective and for CSR to flourish in the most natural manner possible.
What to do?
Without a doubt, the presently dim light of CSR needs to shine much brighter in the Gulf in order for it to really make any sort of impact. According to the Dubai Center for Corporate Values (DCCV), “Businesses can no longer avoid the [CSR] issue anymore, because information is easily accessible and consumers are ready to reward to the ‘good’ companies by buying their products over products produced in an unethical, unsocial, or unsustainable manner.” As noted by the DCCV, companies involved in CSR have realized that it benefits them in a number of ways: by improving the relationship with their employees — and thus strengthening their motivation and retention rate; improving relationships with suppliers — they made transactions and operations run smoother and acquire more control over their own supply chain. There really isn’t anything to lose with CSR; it is a win-win equation: participating in CSR initiatives creates positive brand awareness, and thus consumers will respond emphatically to the brand and the company as a whole. Also, employees and stakeholders will be satisfied and generally more content. It’s time to stop avoiding and start acting.
One way to move forward is by creating a tailor-made learning program on CSR, encompassing everything from basic awareness and comprehension to applicable knowledge. Whether this task is the governments’ or the private sector’s responsibility, a campaign needs to be initiated. Once ignited, businesses will be able to look at their strategic decisions through a sustainable development lens, and thus fuel the CSR fire that needs to erupt around the region. If three crucial criteria are evaluated by the private sector through this ‘lens’, a significant step will be made. First, there needs to be an understanding of the triple bottom line — i.e. society, environment, and employees — and economic impacts, and managing them thereafter as part of normal day-to-day operations. Second, companies need to balance their short-term priorities with long-term needs. And last, companies should be seeking out the views and opinions of others (i.e. stakeholders, employees, legislatures, etc.) before taking final decisions.
