Corporate Social Responsibility (CSR) awards and conferences are big business. Abu Dhabi has been hosting an annual event for years, as has Bahrain. Winners of these awards are a who’s who of the biggest companies across the GCC. From construction corporations, oil and gas companies, telecoms businesses and financial services organizations, many have been awarded accolades for their CSR initiatives.
Yet there is a backlash against traditional CSR. Unilever is reported closing down its CSR department, reviewing how to put sustainability at the core of the business. Allegedly the company’s senior executives are exploring the most effective way for Unilever to deliver meaningful impact with a more all-embracing way of operating ethically, socially and ecologically. The Arab CSR Initiative, instigated in 2004, encourages large corporations
and smaller companies alike to explore initiatives which are more sustainable, have greater engagement, help to build a reputation, be more strategic in their approach to philanthropy and stimulate long-term growth for the company. CSR is beyond compliance, where stakeholders are expecting more from corporations for the societies where they operate and then these corporations do the minimum legally required to satisfy social and ecological issues.
“Ensuring employees are treated well and suppliers’ bills are paid are positive first steps towards sustainable CSR.”
CSR is beyond philanthropic giving, where the tradition of Zakat, donating a percentage of wealth to charity, is deeply rooted in Islamic societies. Many in the GCC regard CSR as just being a corporate form of philanthropy; write the cheque and all commitments are complete. CSR is beyond good-works to be communicated by an active public relations department; reactive to short-term needs of both the company and the community but without any long-term
planning, therefore inevitably wasted effort and ultimately unsustainable. CSR needs to be more than just compliance, philanthropic-giving or good-works to gain some ‘earned-media’ positive-coverage in both traditional and social media channels. Many are focusing on CSR in terms of stakeholder marketing. This approach is driven by a sustainable strategic-plan targeting long-term best-returns, rather than being driven by short-term compliance, philanthropy and good works. This strategic-plan for stakeholdermarketing, effectively executed, forecasts tangible increases in the value of the business which comes from the reactions of all stakeholders who have interacted with the organization.Vital for success is the inclusion of all stakeholders. Stakeholders include employees; grand-gesture CSR initiatives announced by companies where there are salarypayment delays will not resonate well and will reflect negatively on the reputation and image of the company. CSR starts at home. A corporation’s employees are the most valuable asset of the company, particularly as we move into a knowledgedriven economic paradigm where their understanding of what is going on in the business is far greater than the information known to the owners, board or C Suite. Employees create the core competencies of the company, so the initial steps in a holistic CSR stakeholder-marketing driven strategy have to be, first and foremost, focused on investment in its own employees.
“CSR needs to be more than just compliance, philanthropic-giving or good-works to gain some ‘earned-media’ positive-coverage in both traditional and social media channels.”
Ensuring supplier-commitments are being met is also vital. CSR initiatives, driven by stake-holder-marketing, demand an ethical approach from the organization. Ensuring liabilities are being paid in a timely manner is a foundation of positive, ethical CSR activity. Otherwise, all the other initiatives will be rebound negatively on image and reputation. There are examples of companies undertaking CSR activities when they still owe many years rent for their business premises; better to first clear the outstanding bills and then invest in further CSR work. Clearly, the strategic plan for CSR activity needs to add value to the firm, delivering for shareholders as well as all other stakeholders. Owners and business people taking CSR seriously are recognizing the need for sustainable impact on these other stakeholders. An enthusiastic embracing of triplebottom-line accounting will go a long way in aiding such a broader, stakeholder approach. Companies voluntarily contributing to a better society and a cleaner environment will gain competitive advantages. By integrating social and ecological concerns in their business operations through triple-bottom-line management, companies will not just meet basic fiscal and economic needs as well as legal demands but will ensure long-term sustainability and impact on all stakeholders. Traditionally leaders and managers have been focused on short to medium term profits and driving up the share price of the company. They are, rightly, primarily concerned with increasing shareholders’ value; without this, there is no going-concern. Ensuring employees are treated well and suppliers’ bills are paid are positive first steps towards sustainable CSR. Stakeholder-marketing for CSR activity is about paying greater attention to social, ecological, and ethical factors, creating sustainable and tangible benefits. Business success now and in the future will depend on the consequences of decisions and actions affecting all stakeholders, gaining competitive edges and creating a wider range of opportunities.