The prevalence of corporate social responsibility (CSR) within the Middle East continues to grow as more and more companies become aware of the power it holds and the opportunities it presents for their organization. Creating a positive impact on the environment; instilling a happy and productive work culture; supporting the surrounding local community; and driving forward the health of the company’s governance and ethics are not the only compelling facets. Beyond this, organizations are starting to see that by applying and integrating CSR principles into their business model, they can generate additional value for stakeholders and indirectly impact their bottom line.
This is evident in the emergence of annual sustainability reports in the Middle East, which have increased by 65% between 2012 and 2014. The majority of these reports are produced by UAE-based companies, the source of the largest volume of growth, followed by Qatar. Egypt has also shown significant growth over the last two years. Furthermore, from all the reports produced in the last five years, 77% are aligned with the Global Reporting Initiative (GRI) framework, which involves a significant commitment of time and investment, indicating the importance of CSR within these organizations’ agendas.
One of the ways in which having a robust CSR strategy adds value to an organization is the positive effect it has on reputation – both internally and externally. Internally, it helps build a sense of pride in working for the organization and boosts staff morale, thereby improving retention rates and productivity. Externally, it enhances and solidifies relationships with clients and suppliers, and helps change people’s perceptions about the organization. In general, having a CSR strategy boosts brand equity, allowing the organization to recruit top-tier talent, attract new clients and be highlighted among suppliers for embracing the latest technologies, developments and practices in the market. This boost also translates into increased customer loyalty and lifetime values, as well as higher recommendation levels. In literal terms, having a CSR strategy adds dollars to the bottom line in the long term.
To illustrate this, let’s take a look at a local example. Aramex was launched in 1982 as the Middle East’s first courier company, co-founded by Fadi Ghandour who still serves as vice chairman of the company today. Fadi built the company from one small office based in Amman, Jordan to the multinational organization it is today, employing 14,000 people in 60 countries and being the first Arab-based company to trade on the NASDAQ exchange. Given their history, it was only natural for Aramex to support other entrepreneurs and startups in the region – a segment that fits closely to the brand’s DNA and values. Today, Aramex offers discounted rates to startups and also sponsors roadshows and events related to entrepreneurship and startups. As the chairman of Wamda, an entrepreneurship enabling platform in the MENA region, Fadi invests, advises entrepreneurs personally and has also co-founded a seed capital investment company that focuses on early stage tech companies in the region. This has received a tremendous response from the community, increasing their loyalty and affinity for the brand, which has resulted in growing business partnerships and sales, as well as the corresponding profits.
The evolution of CSR strategies and reports in the Middle East will continue as more success stories are shared and organizations look to develop a competitive edge within their industry. However, a true edge can only be established when CSR is properly integrated into a business model, rather than as an addition that’s “nice to have”. If done correctly, the true and long-term benefits of CSR will be perpetual as an extension of the organization’s operating strategy.