Many companies have turned to Corporate Social Responsibility (CSR) programs as a means to try to mitigate what is increasingly accepted as a set of global issues with local impact. This approach is gaining ground in the West, with NGOs and other non-profit organizations taking the lead on raising awareness about CSR. Moreover, private sector companies are starting to genuinely embrace CSR, beyond the PR rhetoric, simply because it makes good business sense. Research shows that companies worldwide are starting to implement CSR voluntarily for two reasons:
• Commercial arguments (competitive edge through brand and reputation protection, business sustainability, etc.)
• Moral arguments (contributing to resolving global problems, e.g. carbon footprint reduction, contributing to local communities, etc.)
Closer to home, some companies in the Middle East have started to apply CSR. Still, the evolution of CSR faces important challenges:
• External drivers such as legislation that drove early CSR in the US are slow to come about in the MENA region
• Internally, many companies either misuse CSR (“CSR is a great PR tool!”) or think “CSR is simply philanthropy.” In many cases it is viewed as an unnecessary expense.
At Saraya, we view CSR as an investment in the sustainability of our business as well as sustainability of the CSR initiatives we implement. The challenge lies in trying to strike a balance between society’s needs on one hand, and on the other hand what private sector companies can offer while remaining competitive when delivering CSR initiatives to a range of stakeholders. Our approach has been extremely practical and was based on three guiding principles:
1. Ensure top management championing
Not only is CSR a new concept in the Middle East, but the impact of the changes it brings to a corporate environment ranges from adopting good corporate governance to the transformation of individual employees’ behavior. Best demonstrated practices have proven that managing change cannot succeed without unwavering senior management support.
Saraya’s CSR department benefits from the support of the entire senior management team and our CSR manager reports directly to the Managing Director of our management arm (the Saraya Development Group), to ensure effectiveness.
2. Understand, prioritize and balance your stakeholders’ needs
When we started to develop our CSR initiatives, we tended to focus on the communities in the cities in which we operate. We have since redirected our CSR efforts to ensure that we are addressing the needs of a broader set of stakeholders.
One group that often gets neglected by CSR programs is a company’s internal set of stakeholders (the employees), and that is where a lot of our effort has been focused with the help of our HR department. Other internally-focused initiatives include corporate governance systems, safety programs, business continuity, etc.
Part of the balancing act mentioned earlier also involves keeping a close eye on the bottom line. CSR initiatives could easily cost millions of dollars, and as a private, for-profit company, we need to ensure that the financial objectives set by our shareholders are met.
It has been our experience that the best approach to balance the needs of multiple stakeholders and get as close to the Pareto frontier between society’s needs and our company’s needs is to define a clear CSR strategy that is fully aligned with the company’s vision and mission and then to diligently implement that strategy.
3. Leverage your core competencies in delivering CSR programs
Finally, Saraya strives to only take on CSR initiatives that can leverage our core capabilities and strengths. It is our belief that for a CSR initiative to be truly credible, it needs to leverage our company’s unique internal capabilities. Examples range from leveraging our construction management expertise when redesigning schools in Aqaba, to sponsoring and supporting students with their tourism and hospitality studies.
We expect our CSR program to continue to grow in parallel with Saraya’s growth. This will enable us to take on increasingly ambitious CSR programs that will allow us to contribute more broadly and more effectively to our local communities in particular and the planet in general.
Ali Kolaghassi is vice-chairman and CEO of Saraya Holdings
