ME firms ‘recognising the value of CSR’
Dubai, July 17, 2010
Regional businesses are increasingly recognising that corporate social responsibility (CSR) is a business imperative rather than a philanthropic add-on, said a report.
The second annual CSR Middle East Survey conducted by Sustainability Advisory Group (SAG), an international alliance of sustainability strategists and specialists, added that a large number of executives now agree that properly conceived and managed CSR will result in a wide range of benefits including business reputation, innovation and growth.
Maria Sillanpaa, founding director of SAG, said the survey covered public and private sector organisations in eight countries in the region.
More than 60 per cent of the respondents were based in UAE and the rest in Saudi Arabia, Bahrain, Oman, Qatar, Yemen, Jordan and Egypt.
The survey drew a balanced response from organisations in terms of size, and a 50-50 split between public and private sector companies. The largest respondent group according to industry sector was energy, followed by utilities and agriculture.
Over 90 per cent of respondents expressed the opinion that credible CSR programmes can enable companies to build and maintain a strong reputation, over 80 per cent asserted that CSR can attract new customers and foster innovation, and over 70 per cent believed that CSR can help capture new markets and market share.
“We are clearly witnessing a shift in attitudes towards CSR in the region – previously CSR was perceived as a bit of a fringe issue, perhaps a ‘nice to do’ activity if time and resources allowed,” Sillanpaa said.
“Now executives are increasingly agreeing that it should be integral to their business strategies. We see this reassuring level of sophistication in the regional understanding of CSR as a sign of maturity and a desire to keep up with the powerful international trend,” she added.
These positive findings are tempered by worrying signs that businesses are still complacent about some of the critical issues facing the region, she said, adding that a relatively high number of business leaders continue to rate water conservation, climate change and waste as unimportant to their business.
“As we indicated in our report last year, given current predictions for the region in relation to water scarcity and climate change, this is an alarming result, which continues to suggest that a number of regional businesses are not yet fully prepared to deal with the shifting business context,” Sillanpaa noted.
The figures related to poverty alleviation have also become more worrying compared to last year’s findings, with an increase of 10 percentage points in the number of business executives regarding poverty as unimportant to their business (up to 38 per cent from 28 per cent last year).
Sillanpaa, who is internationally recognised as a leading CSR and sustainability practitioner, and has been ranked number three in CSR International’s Global Top 100 CSR Leaders advisory category, listed five key findings of the survey, most of which are in line with the international thinking on the subject:
• Executives in the region are struggling to relate environmental issues to profitability and long-term business impact
• CSR is becoming increasingly important for business
• The attitude to CSR in the region is maturing
• The need for effective CSR should be driven from inside rather than by governments and regulators
• CSR is gaining increasing recognition as a framework for future growth
“People issues such as employee well-being, health and safety, recruitment and retention, ethical practices, governance and transparency continue to be rightly recognised as the critical CSR issues businesses within the region must tackle,” Sillanpaa said.
“However, environmental issues such as water conservation, climate change and access to resources are much lower down the corporate radar although these issues have gained considerable media attention in recent times.”
“For us at SAG, this is one of the most important lessons from the survey. There have been considerable efforts in this part of the world from governments as well as civil society to strengthen awareness about environmental issues and relate them to practical business risks that will have an increasing impact on business performance and profitability,” she added.
“Considering the fragile ecology and the geo-political context in which we live, SAG as well as many of the survey respondents believe that these issues require urgent attention in the coming years,” Sillanpaa said.
Elaborating the other key findings, she noted that the responses to the survey clearly showed that CSR is increasing in importance, year on year, to businesses in the region.
Compared to last year, the number of respondents who believe that CSR is more important in a difficult economic climate has gone up from 50 to 60 per cent.
The results of the survey suggest that the general business understanding of CSR is moving away from that of traditional approach of ad hoc goodwill gestures, charitable giving and philanthropy, to a more comprehensive understanding of the benefits CSR can offer a company as part of its overall business strategy.
Less than 8 per cent of respondents viewed community investment as the core definition of CSR, down from 17 per cent last year.
“This maturing attitude is also evident in businesses’ perception of the government’s role regarding CSR. Contrary to last year’s results, there is a considerable increase in the number of organisations which say that CSR is not just a government agenda, one for them to comply with, but an internal one, which will ensure the sustainability and long term success of their business,” explained Sillanpaa.
Businesses in the region have also begun to realise that effective CSR programmes can help in attracting new investment and capturing new markets as well as strengthening existing market share, the report said.
Supporting this growing feeling that CSR can be used as a framework for future growth are the 86 per cent of respondents who either agree, or strongly agree, that CSR can foster innovation and the 82 per cent who believe it can help to attract new customers.
Although over half of the respondents claimed that they have a clearly articulated CSR strategy signed off at the highest level, these numbers go down dramatically when it comes to systematic management of the agenda.
Only 14 per cent of the responding organisations have formal CSR-related key performance indicators (KPIs) in place and 11 percent consider CSR performance as part of their bonus schemes.
A total of 151 organisations participated in the survey, which was conducted over a period of six weeks in May and June. Significantly, the number of respondents who described their role and title as CSR or Sustainability related almost doubled this year to 37 per cent from last year’s 19 per cent; 36 per cent were from the general management category against 14 per cent last year; 30 per cent described their role as strategy and business development, up almost three times from last year.
“These figures clearly suggest that regional businesses are taking the corporate responsibility agenda seriously, and is paying more attention to creating relevant positions in their organisations,” Sillanpaa concluded. – TradeArabia News Service