Is CSR just about donations to NGOs or occasional awareness campaigns? Or is it a solid business proposition? Farrukh Naeem investigates.
It's almost fashionable to talk about CSR in the corporate world. Company websites have dedicated CSR sections. Regular press releases are issued with pictures of CEOs holding giant donation cheques. But the scope of CSR goes beyond more than just charity, donations to development organisations or seasonal awareness campaigns. This feature looks at how companies and brands are embarking on their CSR journey as part of their values and their business philosophy. And why it matters.
Today, as companies struggle to come to terms with harsh economic realities, questions are being raised on whether there is any good in doing good, business-wise.
There is ample evidence that no matter what times an economy might be going through, investment in CSR is a necessity - and an opportunity. In a study conducted by YouGov Siraj on behalf of National Commercial Bank of Saudi Arabia, more than half the respondents (56 per cent) felt that CSR attracts new investors and another 62 per cent believed that CSR facilitates the development of a stronger relationship with the organisation.
The 2009 Edelman goodpurpose Consumer Study, which surveyed 6,000 consumers in 10 countries, revealed that 57 per cent of consumers chose a brand or company because of its CSR initiatives. If the quality of a product or service is the same, more than 65 per cent would readily switch to a brand that supports a good cause.
In their latest book, Guerrilla Marketing Goes Green: Winning Strategies to Improve Your Profits and Your Planet, Jay Conrad Levinson, originator of guerrilla marketing, and award-winning marketing author and lifelong environmental activist Shel Horowitz stress that CSR, sustainability and profitability can go hand in hand.
"Not only is it a good value proposition, but those companies that ignore CSR will find themselves increasingly marginalised as more and more consumers start to really demand it," Horowitz says. Ethical companies can slash marketing costs and boost response by forming alliances with organisations that reach their target audience, by turning customers and even competitors into brand ambassadors.
While one would think that recessions diminish the CSR effect, it's quite the contrary. In 2009, according to the Edelman study, 64 per cent of global respondents said they would recommend a brand that supports a good cause, up from 52 per cent in 2008. The need to be an ethical and responsible company today is greater than ever.
Redefining social responsibility
In a region known for its predisposition to philanthropy at an individual, corporate and government level, it's not hard to find numerous examples of community support through financial aid.
Especially during Ramadan, the traditional month of giving, all entities big and small do their part for the community, often without publicity, as is the Islamic tradition. But there's more to CSR - and things are changing fast towards the global norms.
CSR in the region is moving in many instances from ad hoc activities driven by individual company founders, to a strategically aligned, competency-based activity framed by the company's overall corporate responsibility strategy, according to Maria Sillanpaa, founding director of the Sustainability Advisory Group.
"Philanthropy aside, the region is now clearly acknowledging that corporate responsibility goes well beyond the cheque book," she says.
The genuine concern leaders in the Middle East have for responsible business was evident at this year's World Economic Forum. "Business needs to invest in society," said Fadi Ghandour, founder and CEO of the Jordan-based logistics company Aramex International. "If we don't act responsibly, who will pay the cost?"
"We are not late, but we are running fast in trying to bring social responsibility to our society," said Mohammed Alshaya, executive chairman, Alshaya Group, Kuwait. Ahmed Mahmoud Nazif, Prime Minister of Egypt, noted that social responsibility is not just about taking care of the environment; it is about taking care of the whole society. As the need to have solid CSR planning and implementation is being realised, interesting case studies are emerging in the region.
CSR as part of brand values the regional experience
Governments across the GCC and the Middle East are increasing their investment in community development with brands like Qatar Foundation and Dubai Cares helping local and global communities. From a marketing point of view, CSR activities are being conducted by businesses as part of their brand mandate.
In the retail sector, a brand that is doing CSR in a whole new way is Dubai-based THE One, the Total Home Experience brand. Its stated purpose is "to change the world together".
Thomas Lundgren, the founder of THE One and winner of the CSR Leadership Award at the CSR Summit Awards, believes: "Whatever you do, if it's not built into the vision or values of your company, it will never stick." The brand trains and employs special needs staff, encourages staff volunteering, and has special products which can be bought to contribute to its CSR efforts.
With stores in Bahrain, Jordan, Kuwait, Qatar and the UAE currently, THE One aims to run 99 stores by 2020 to support 99 villages around the world through its Onederworld initiative. The first project is the Pimbiniet community in Kenya where the company is building schooling facilities, digging wells, eliminating child labour and creating volunteering opportunities. "It's about engaging with society on a significant level and empowering our communities to evolve as a by-product of our core business." THE One has a dedicated project blog at www.theonederworld.com where pictures and videos of the progress of the project are posted regularly.
In the technology arena, the region's largest managed ICT cluster, Dubai Internet City (DIC), has focused its efforts in facilitating the exchange of ideas. It hosts the Indus Entrepreneurs (TiE) events to nurture the entrepreneurial spirit and facilitate start-up companies.
"During challenging times, DIC continues to initiate significantly valuable programmes to support small and medium-sized business in the region," says Malek Al Malek, executive director of Dubai Internet City.
DIC also supports BarCamp meetings in the UAE an informal gathering of technology and new media professionals to share knowledge, exchange experiences and analyse exciting new developments in their respective fields. To support the IT employment industry in the region, DIC is working with the career portal Bayt.com offering a series of CV clinic sessions for UAE professionals looking for employment.
Innovative contributions
It isn't hard to imagine how brands can put their products to good use for CSR. For the Al Noor Training Centre for Children with Special Needs in Dubai, the paints and coatings brand Jotun designed a premium "children-friendly" paint that's easy to clean, has a neutral scent and lasting colour. Its staff volunteered to paint the centre's premises.
"We have been supporting Al Noor Training Centre for Children with Special Needs for the past 10 years, and this campaign holds particular relevance to us as an organisation, as we are committed to utilising colours to positively affect and inspire people," says Trine Finnevolden, general manager, Jotun Paints.
Taking the idea of bringing joy to special children even higher, Qatar Airways invited 100 children on a specially organised flight over Qatar.
The initiative was aimed at bringing fun and joy into the lives of children - many from the Qatar Orphan Foundation Dhreima, in line with the airline's CSR programme. "The Oryx Flies Green". Most of the children, aged 5 to 16 years, had never flown before.
In the field of finance and economic dependence, BankMuscat joined hands with the Sidab Women's Group as part of its Business Incubator CSR initiative. "The main objective of the BankMuscat business incubator is to produce successful firms that are financially viable and free-standing.
"Its services will be offered to Omani women who possess the basic skills related to their business idea, but require training and support to enhance their start-up ventures," says Shaima Al Lawati, head of CSR, BankMuscat.
According to Badriya Al Siyabi, founder of Sidab Women's Group, the core of the initiative is a partnership mechanism helping Omani women to acquire skills guaranteeing economic independence.Also from Muscat, an interesting CSR brand association is the tourism brand Omran's design and distribution of e-greeting cards as a tool to promote Omani artists and art that portrays Oman, with a support donation to the artists for the use of their images. Omran also works with Outward Bound Oman/Tahaddi to help people develop life skills by delivering two outdoor leadership development courses for Omani youth. The courses help young Omanis develop life skills sought by employers, thus helping bridge the gap between educational environments and the workplace.
In Bahrain, Islamic insurance company T'azur was honoured with the Maqasid Al-Sharia CSR Awards for its commitment to its people and community, its concern for the environment and innovative CSR ideas like the Sadaqah Plan.
T'azur invests regular donations under this plan in Shari'ah-compliant funds and the accumulated capital is given to a charity chosen by the donor. If the donor is unable later on to contribute due to disability or critical illness, T'azur continues to make the donations on his behalf. It's a good example of blending of Islamic values while designing CSR, as part of a Shari'ah-compliant brand exercise.
Being there
A telecoms brand that has made waves for its extensive CSR footprint in the region is QTel. The Qatari telco company supports the National Program for Raising Awareness and Safe Disposal of Electronic Waste (NPRASDEW), aimed at a clean and safe environment in Qatar by the proper disposal of electronic waste.
QTel has signed a Memorandum of Understanding with the Qatar University Wireless Innovations Centre (QUWIC) to carry out joint applied research and technology development in the key areas of wireless systems, services and applications.
QTel's charity auctions of Easy-to-Remember Mobile (ERM) numbers have benefited the Qatar Diabetic Association, Qatar National Cancer Society, Qatar Society for Rehabilitation of Special Needs, the Qatar Orphan Foundation and the Qatar Red Crescent. QTel is in the process of taking its CSR best practices and exporting these across its international operations in the Middle East, Africa and Asia.
Many organisations run anti-smoking campaigns but one that stands out in terms of strategic brand association as well as its impact is Dubai Healthcare City's 30-day "Quit and Win" programme.
Organised to coincide with the World No Tobacco Day, the programme was rolled out across multiple platforms from traditional media to a dedicated website www.notobaccocampaign.com, a Facebook group and a Twitter profile, too. The campaign resulted in half of its participants successfully quitting smoking, far ahead of the international benchmark of 20-24 per cent. Campaign partners were ExHealth and the Green Crescent Insurance Company, logical choices for such a campaign.
WHO says the UAE is among the most obese nations in the world; it ranks 10th in the list of overweight countries. Using these insights, Al Islami has planned educational sessions for 100 schools across the UAE to educate students on how to tackle these hazards.
Global FMCG brands in the region adapt their international CSR programmes locally. Pampers-UNICEF "1 pack of pampers = 1 dose Vitamin (A)" project by P&G did it well. Egyptians were persuaded and made aware of the importance of Vitamin A by Karima Moukhtar, a popular mother figure in Egyptian serials; Dr Muhammad Ref'aat, a child care expert; Mona Zaki, a young mother and actress; and Mo'ataaz El Demerdash, the TV presenter.
Playing it safe
In the auto sector, Chevrolet Middle East's "Buckle Up" campaign took its message all the way from schoolchildren to policy makers. "Being an automotive company we have a responsibility towards road safety," says Samer El Khalil, communications and public relations manager, GM Middle East. Khalil explains how parents were informed through live demonstrations on the right way to restrain children for their safety while driving.
Over 5,400 people visited the campaign stands in malls, of which 1,485 were interviewed and instructed on the correct installation of child safety seats. More than 18,000 leaflets were distributed. High traffic events like the Dubai Motor Show and the Mother and Baby Show were used for maximum exposure. Students in schools wrote letters to the local authorities highlighting the issue of child passenger safety.
The pilot project was carried out in the UAE and it will now be taken around the region. "The plan for us is to continue this campaign not to have it as a one-off," Samer says.
For CSR initiatives to be really effective, Samer feels it is necessary to also have legislation that makes compliance to the safety guidelines compulsory.
"You could do as many campaigns as you want, you could try to reach as many target audiences as you want. But if it is not properly enforced, it's not going to change [anything]."
The brand that has put Kuwait on the map for CSR efforts is logistics company Agility, which employs more than 37,000 staff in 120 countries.
Agility's Humanitarian and Emergency Logistics Programme (HELP) brings the company's expertise in emergency preparedness and response operations to some of the world's most challenging environments. It has provided logistics support in disasters in Myanmar, Lebanon, Indonesia, Iraq and Bangladesh.
At the recent CSR Summit Awards Ceremony held in Dubai where the company won two awards, Tarek Sultan, chairman and MD of Agility, said: "We believe passionately in giving back to the communities in which we operate not just through donations or one-off projects, but through a comprehensive series of initiatives focusing on sustainability, disaster response and employee volunteerism."
Making way for transparency
One thing that needs to change is the way people look at CSR reporting. An organisation that faced an unexpected response to their transparent reporting of their CSR progress is the Dr Soliman Fakeeh Hospital (DSFH), Saudi Arabia. Soon after the hospital released its non-financial CSR report, a first in the region's healthcare industry, it was taken to task in the local media for publishing performance figures that seemed too low for being in the news.
In a press conference at the Arab Health Congress 2010, Dr Mazen Fakeeh, the director general and chairman of the Executive Committee of the hospital, explained: "The numbers we are publishing are good numbers in the health industry globally."
For example, the report shows the Saudi hospital's staff satisfaction at 52 per cent, which is far higher than the average of 38 per cent of the UK and the 41 per cent of the US. In a region accustomed to CSR press releases loaded with self-praise, the unvarnished truth is to be applauded.
As more organisations and governments put regular monitoring and auditing systems in place, and publish accurate figures of not just the best parts but the areas that need improvement, transparency and honesty about the true state of affairs is to be encouraged.
The way ahead
Where do we go next in the region's quest towards effective and sustainable CSR? "The ultimate step on the sustainability journey involves shifting mindsets and perceptions about what business is all about," says Maria Sillanpaa, of the Sustainability Advisory Group. This involves moving from the traditional "the business of business is business" world to a new paradigm where "the business of business is the planet and its people".
At the start of this new millennium, companies took over as the major economic force globally. Of the 100 largest economies in the world, 51 turned out to be corporations; 49 were countries. Wal-Mart was bigger than 161 countries; Mitsubishi was larger than Indonesia. General Motors was bigger than Denmark. Ford was bigger than South Africa and Toyota bigger than Norway. With this level of might and influence, companies must accept a much wider global role than the purely economic.
"They need to be proactive seekers of solutions to our complex global challenges, not only reactive followers of new rules."
Any efforts made to improve the standard of living of a community will bear more fruit when businesses, governments and individuals work in tandem towards a common goal. In the GCC and the Middle East, it will take more than feel-good press releases and token campaigns. The good news is, it's starting to happen, and fast.
© Gulf Marketing Review 2010
