v i e w p oi n t
The Middle East should nurture CSR For many years the approach to achieving long-term prosperity and stability in MENA has been economic growth. Instead, governments should be pursuing sustainable development. Unlike previous policies, sustainable development is a strategy for economic progress that aims to create jobs, alleviate poverty, provide education, and carefully manage the environment. What is also different is that sustainable development requires the participation of civil society organisations, academia and private enterprises.
Companies
have a particularly important role to play in sustainable development through corporate social responsibility (CSR) initiatives. Many MENA companies are increasing the scale and range of their CSR projects, as part of a global trend and an extension of longstanding cultural traditions. Unfortunately, too many companies conduct these initiatives on an ad hoc basis that limits their effectiveness. For maximum impact, companies need to align CSR projects with national development goals and coordinate with governments, academia and civil society. Such a coordinated effort is critical to tackle regional sustainable development, including the main challenge of training and educating young people for jobs. Just keeping employment at 2011 levels will require an additional 75 million jobs by 2020 – a 43% increase on the number of jobs in 2011, according to the World Economic Forum. Then there is the environmental impact of a growing population and increased economic output on a fragile ecosystem. The Arab states have over 60% of the world’s oil reserves, but just 0.5% of its renewable fresh water sources. They also have considerable problems with waste management and poor air quality in urban areas. Until recently, too many MENA companies considered CSR initiatives an optional extra and defined such work too narrowly, and too few governments fully comprehended how CSR can dovetail with national development. One sign that the tide is turning is the number of regional companies that have joined the UN Global Compact, a strategic policy initiative for businesses committed to ten principles in the areas of human rights, labour, environment and anti-corruption. The list of signatories from the MENA region has grown from just three in 2003 to 262 by the end of 2012.
3 4 Qatar Today
MARCH 2013
Best practices As more companies conduct CSR projects, they are establishing best practices that other companies can follow. These best practices include ensuring high-profile support and engagement of senior leaders, and practising more transparent corporate governance to encourage candid discussions and create clear guidelines for tackling CSR issues. These CSR leaders also integrate CSR with their operating model by, at the very least, coordinating the activities of their company’s businesses, functional units and partners. They also focus on a few CSR themes that leverage the company’s expertise, and they tap the credibility and expertise of civil society organisations, public-private partnerships and social business ventures. Finally, these CSR pioneers measure results to assess and refine their initiatives. In tandem with companies aligning their CSR projects with national development goals, governments need to help define these goals and create an environment in which CSR is encouraged and indeed expected from companies. Encouragingly, MENA governments have become more active in their promotion of CSR. Almost all GCC members now have corporate governance codes or guidelines in place for publicly listed companies, which are key enablers for CSR. Some Arab countries have also passed legislation on transparency and accountability targeted at state-owned enterprises. Set priorities Eventually, when the CSR environment is mature, MENA governments may not need to intervene, except to offer encouragement. For the time being, however, given the region’s substantial development needs and the undeveloped nature of CSR, governments need to play a more active role in setting priorities. At the very least, governments can define and mandate minimum standards for business performance through legislation. Governments can also facilitate CSR by naming a ministry or department to coordinate strategies and policy-making. The