The Rise of Corporate Social Responsibility: A Tool for Sustainable Development in the Middle East
Sustainable economic development in the Middle East and North Africa (MENA) will depend on job creation, education, poverty alleviation, and careful environmental management. Government, civil society organizations, and academic institutions should all be involved in this effort. Companies have a particularly important role to play. They must be involved and contribute to the betterment of the societies in which they operate. They can do this through corporate social responsibility (CSR) initiatives that align with national development objectives in areas as diverse as affordable housing, educating women, and conserving water.
Although CSR is a complex undertaking, made the more challenging by the fact that it is a relatively new concept for the region, such projects are entirely within the capabilities of MENA region companies. To illustrate what companies are doing and how CSR can meaningfully contribute to regional development, Booz & Company has conducted extensive interviews and drawn on its work with CSR leaders in the Middle East.
Helping the MENA region achieve its economic potential will require governments, as well as private companies, civil society organizations, and academia to make sustainable development a priority. The United Nations Development Program defines sustainable development as distributing the benefits of economic growth equitably, regenerating the environment rather than destroying it, and empowering people rather than marginalizing them.
There is a robust need for job creation to nurture economic growth and spread benefits among the population. Today, half of the region’s population is under the age of 25 and there is widespread unemployment. Among those 15 to 24 years of age, approximately 25 percent lack a job, significantly higher than the 17.3 percent average in the OECD area. The World Economic Forum estimates that to keep employment at 2011 levels, the region needs to create 75 million jobs by 2020—a 43 percent increase on the number of jobs in 2011.
There is also the environmental impact of a growing population and increased economic output on a fragile ecosystem. The Arab states have over 60 percent of the world’s oil reserves, but only 0.5 percent of its renewable fresh water resources. Consequently, most countries in the region suffer from severe water shortages. Other environmental concerns include waste management and poor air quality in urban areas.
The scope of these sustainable development challenges demands a high level of attention and coordination between the region’s most powerful stakeholders. Therefore, the region’s companies should align their CSR initiatives to their respective countries’ needs. Unfortunately, companies rarely link their individual CSR efforts to national development priorities, with the net result that their CSR projects have insufficient impact. To bridge this divide and to improve CSR as a discipline, companies and governments should follow a four-step process: define CSR for the MENA region; study current CSR activity; identify CSR best practices; and create an environment for CSR.
- Executive Summary
- Project Goals and Methodology
- The Need for Sustainable Development
- Integrating Sustainable Development into CSR in Iraq
- Building a CSR Agenda
- Exhibit 1: Developed Economy Citizens Want “Core” CSR Projects (Percentage of Respondents)
- Exhibit 2: Developing Economy Citizens Want CSR to Promote National Development (Percentage of Respondents)
- Localized CSR Approach—HSBC in the Middle East
- The Middle East Leadership Initiative
- Al Muhaidib Group: Corporate Governance Creates a CSR Agenda
- SEDCO Holding: Best Practices in Action
Ramez Shehadi is a partner with Booz & Company in Beirut. He leads the digital business and technology practice in the Middle East and is the global leader of the firm’s digitization platform. He works with public and private organizations to maximize their leverage of technology to achieve operational efficiency, improve relevance of infrastructure, and develop next-generation digital services. In addition, he leads the firm’s corporate social responsibility program in the Middle East. He is a Fellow of the Aspen Institute’s Middle East Leadership Initiative and a member of the Aspen Institute’s Global Leadership Network.
Salim Ghazaly is a principal with Booz & Company in Beirut and a member of the firm’s public-sector practice in the Middle East. He focuses on strategy development, feasibility studies, business planning, organization restructuring, public-sector reform programs, and regional development. He advises policymakers, governments, regulatory authorities, and key public-sector entities on policy matters and governance issues.Dr. Dima Jamali is a professor in the Olayan School of Business, American University of Beirut, and the Chair of the Management, Marketing and Entrepreneurship Track. Her research and teaching revolve primarily around corporate social responsibility. She is the author of over 40 international publications focusing on different aspects of CSR in the Middle East. She has worked as an expert consultant for the United Nations on social policy and CSR as well as various projects funded by the World Bank, the United States Agency for International Development, civil society organizations, and other local public and private firms.
Dr. Mounira Jamjoom is a senior research specialist at the Ideation Center, Booz & Company’s think tank in the Middle East. She leads the Center’s research on education, women, and other social issues that are vital for development in the Middle East region.