Corporate social responsibility
As the UAE strives to be the number one business and tourist destination in the world, Becca Wilson reports on the business case for Corporate Social Responsibility (CSR) and the region's commitment to it.
Corporate Social Responsibility (CSR) is a well known and established term in the developed Western world. But in a region such as the Emirates, where the last five to 10 years has only just seen the impact large scale development can have on a country, businesses have still to fully understand the strategic concept.
However, attitudes are now changing and there are initiatives and resources available for companies to take part in to start understanding the economic, environmental and sustainable positive impact CSR can have.
In May, Cityscape Abu Dhabi will see the presentation of the Cityscape Real Estate Awards to celebrate excellence in real estate development and investment. The development field will have a special CSR award - another sign CSR is raising its game in the region.
Back in 2004, the Dubai Ethics and Resource Centre (DERC) was established by the Dubai Chamber of Commerce and Industry to actively promote and raise awareness of CSR to the wider business community. The organisation fully understands why the region should start complying with international CSR best practice and start using it as a tool to drive sustainability, rather than one that will create expense.
"It is a management tool that people need to apply. A strategic concept that one needs to integrate into the company operation for the long term goals, plans and sustainability of the organisation," says Vineetha Sarju Mathew, corporate responsibility training specialist, Dubai Ethics Resource Centre.
She went on to explain that many companies in the UAE are aware of CSR but are unsure of how to implement CSR policies and procedures. Their levels of CSR also need to be broadened as currently, most businesses class philanthropy and Emiratisation as fulfilling their CSR requirements.
"A lot of people still think that giving money or sponsoring some event, giving some funding, is CSR. This does fall into CSR but it's not like the strategic CSR that we are talking about. Giving money doesn't hold water anymore," she adds.
The DERC conducted a research project last year with the aim to establish what levels of CSR knowledge businesses in the Emirates currently have. The results were published in a report titled 'Corporate Responsibility Awareness in the United Arab Emirates'.
Nearly 500 businesses responded to a survey the DERC sent out. The report states that 72% of managers of local companies are 'highly' or 'very highly' aware of corporate responsibility concepts, 93% are 'much' or 'very much' committed to it and 86% believe that ignoring it will have a negative impact on the company's bottom line.
However, in the executive summary, it states that 'it becomes increasingly apparent that companies are saying one thing and doing another. For example, in spite of the strong recognition that ignoring corporate responsibility causes a direct, negative impact on the bottom line, only a mere 24% of local companies undertake any form of corporate responsibility related reporting and of these, not one provided a link, extract or copy of a report and only 17% consulted any form of international standards that provide best practices and guidance for effective reporting'.
With more and more FDIs (Foreign Direct Investments) presenting themselves in the UAE, local company's need to start aligning themselves with international best practice standards if they are to retain investment and attraction.
"There's a lot more FDIs coming into the region and a number of the institutions have CSR policies, they have ethics," states Mark Prior, regional managing director of international consultancy, EC Harris.
"They (international standards) are not necessarily compatable with here so I think there will be a shift over time as efforts continue to grow. The challenge for Dubai and other Emirates is raising awareness."
CSR can be anything from making sure staff have the right ergonomic chair at work, to strategic development of a sustainable business, introducing best practices or giving something back to the wider community. With the UAE still learning and coming to terms with being a city under extensive development, it is understandable how international concepts like CSR will take time to fully establish themselves within businesses, government and the general public.
Prior blames the rate and speed of development growth on companies not having the time to dedicate to issues like CSR. "There are so many pressures on resources here, people just can't physically commit the time to worry about issues like sustainability when the pace of growth is going the way it is. That is actually a defence to what is happening."
However, he is also concerned with the lack of time being spent on these issues and states that the UAE will not see the detrimental effects of pushing these issues to one side for a while.
"It's not short or medium term, it's long term. Will people look back at what's happened to Dubai and say, "actually, it's an environmental disaster". A lot of things are being done here that pushes technology and innovation to the absolute limits - the Palm Island is a magnificent engineering achievement but does anybody know what the long term impacts of the marine eco-culture of the Gulf is going to be?
"The continued desalination of water out here and pumping salt back into the Gulf, are we creating a dead see in 100 years time?" he asks.
The general consensous is that awareness and education are key to ensuring companies fully understand the positive business case of implementing strong CSR policies.
Like the UK, the DCCI want to shy away from implementing strong legislation for CSR. On the UK's government website it states that, 'specifically we see CSR as the voluntary actions that business can take, over and above compliance with minimum legal requirements, to address both its own competitive interests and the interests of wider society'.
Dr Belaid Rettab, executive director of DERC, agrees with this statement and explains that: "It's a parallel thing, complimentary. If the community will behave in accordance with best practice we don't need much regulation to support CSR. If businesses are only concerned with their profits and short term utility functions, of course the law has to interfere, but that intervention is not one that is welcome in the eye of the DCCI."
There is certainly a strong business case for the Government to introduce legislation to make sure businesses comply with international standards.
"Legislation is the best tool for raising awareness," states Prior. "Unless people see there is a commercial benefit or they are breaking the law then it's very difficult to create awareness.
"In the UK you have building regulations like Part L, a bit of compliance to force people to make buildings more environmentally friendly."
It seems international best practice, limited legislation and a shift in priorities for businesses is the best way to tackle corporate social responsibility. Seminars and courses are a great way to inform the business community why they should buy-in to the concept.
"What is of concern here is the need to develop strategies, guidelines and how they are implemented in conformity with those guidelines. We need to see best practices developed and benchmarking within sectors," concluded Rettab.
- 72% of businesses are very highly or highly aware of CR
- 93% of businesses responded to be very much or much committed to CR
- 86% of firms agreed that ignoring CR will harm its commercial/financial performance
- 82% of companies have a health & safety management system
- 74% of firms systematically review this system to benchmark and improve performance
- 72% of companies have rules in place to prevent discriminatory behaviour
- 47% of companies have policies related to discrimination
- 65% of companies think it is legitimate to discriminate on the grounds of age, 42% on gender and 41% on disability
- 82% of companies develop employee potential through regular training offerings
- 46% of companies have policies in place to deal with the firm's environmental impact
- 53% of companies conduct impact assessments
- 66% of companies have measures in place to sanction environment harming activities
- 57% of companies consider the environmental impact of their supplier
- 25% of firms consulted international guidelines on environmental risk management
- 65% of companies engaged in good will projects in the local community
- 46% of companies have clear policies on spending resources for social goals that are strategically aligned with the company business
- 75% of firms conduct pre-market trials of new products for safety/security purposes
- 82% of companies record complaints as Key Performance Indicators (KPIs)