Corporate Social Responsibility in MENA 

Corporate social responsibility CSR MENA

What is Corporate Social Responsibility (CSR)

Corporate social responsibility (CSR) is a business approach that allows companies to take into account the social, environmental, and economic impacts of their operations and decisions. It involves a company taking responsibility for its impact on society and the environment, and working to make a positive contribution to the communities in which it operates. 

Typically, CSR is tracked across four dimensions, these include:

  • Economic: this can include the impacts of hiring employees from local or underserved communities, financial spend on more R&D, procurement from partners that can support CSR efforts, and investment into new processes that can yield better CSR results. 
  • Social: this can include philanthropic and charitable spend, supporting charitable causes championed by employees, working with suppliers that support philanthropic and charitable causes, and sponsoring events.
  • Ethical: this can include ethical treatment of staff, potential hires, and stakeholders, assessing your supply chain to ensure the ethical treatment of supplier staff and stakeholders.
  • Environmental: this can include impacts of assessing processes to reduce resource consumption, and pollution, sourcing materials from more sustainable suppliers, and utilizing more environmentally friendly distribution channels. 

International best practices exist through case studies and standards. For example, ISO 26000 was developed to help companies effectively assess and address social responsibilities that are relevant and material to their operations and ethos.

It seeks to provide guidance to companies to ensure they implement CSR initiatives that support their mission and vision, operations and processes, customers, employees, communities, and other stakeholders as well as minimize their environmental impact.

Potential Benefits of CSR

There are many potential benefits of CSR for companies, including:

  • Improved reputation: CSR initiatives can help to enhance a company’s reputation and brand image, as consumers and stakeholders often view companies that engage in CSR activities as more responsible and ethical.
  • Increased customer loyalty: Companies that engage in CSR activities may be more likely to attract and retain customers, as many would prefer to do business with companies that have a positive impact on society and the environment.
  • Better employee engagement: CSR initiatives can help to increase employee satisfaction and engagement, as employees often prefer to work for companies that are socially and environmentally responsible.
  • Enhanced risk management: CSR activities can help companies to identify and mitigate potential risks related to social and environmental issues, such as reputational risks and regulatory risks.
  • Increased financial performance: Overwhelmingly, research suggests that companies that engage in CSR activities experience improved financial performance, as CSR initiatives can lead to cost savings and increased efficiency.

Overall, CSR can provide many benefits to companies, and is now seen as a must-have business philosophy. 

Corporate Social Responsibility in UAE

In 2018, UAE Ministerial Cabinet issued Cabinet Decision No. 2 for 2018, which formed CSR UAE Fund. The Fund is a federal authority whose responsibility is to set the framework and governance for Corporate Social Responsibility in the UAE. The fund will also manage and direct contributions from the business sector toward national priority initiatives. 

CSR UAE Fund has metrics in place to rank and reward active businesses in CSR on a country level. It is also an enabler for relevant authorities to enhance and regulate socially responsible practices within corporations and business entities.

The stated mission of this fund is to establish a platform that encourages the business sector to actively engage in socially responsible practices that lead to a positive economic, social and environmental impact in line with the UAE’s priorities and sustainable development goals.

The objectives of this fund include the following:

  • Increase community awareness of social responsibility
  • Activate sustainable development partnerships between the public and private sector
  • Develop social responsibility frameworks to regulate and enhance social responsibility
  • Create a reward system for corporations and business entities
  • Direct corporate contributions towards sustainable development projects in line with UAE priorities and sustainable development goals.

The creation of this fund demonstrates the commitment of the UAE to enhancing and supporting CSR implementation across the country. 

Corporate Social Responsibility in KSA

Though not as mature as UAE in this area, CSR is an increasingly important concept in Saudi Arabia, as companies seek to demonstrate their commitment to social and environmental responsibility in line with Vision 2030 and Net Zero 2060. The Saudi Arabian government has also recognized the importance of CSR and has taken steps to promote it in the country.

These steps include the development of environmental, social, and governance (ESG) reporting guidelines by the PIF in order to enhance reporting and drive the implementation of CSR initiatives. 

Corporate Social Responsibility and Sustainable Procurement

Sustainable procurement is the integration of Corporate Social Responsibility (CSR) principles into your company’s procurement processes. As such, sustainable procurement is a related concept that involves a company sourcing goods and services in a way that considers the procurement process’s environmental, social, and economic impacts.

It involves seeking out suppliers and products that meet certain sustainability criteria, such as those that are produced in an environmentally friendly way or that support local communities. In general, CSR and sustainable procurement are closely related, as both involve a company taking into account the impacts of its actions on society and the environment.

A company that is committed to CSR is likely to prioritize sustainable procurement as a way to reduce its environmental footprint and support social and economic sustainability. Similarly, a company that is focused on sustainable procurement is likely to be more attentive to the overall impacts of its operations, including those related to CSR.

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