Research | The Rise of Corporate Social Responsibility: A Tool for Sustainable Development in the Middle East

The Rise of Corporate Social Responsibility: A Tool for Sustainable Development in the Middle East

In March 2014, Booz & Company joined the PwC global network of firms and is now known as Strategy&. All references to Booz & Company predate this change.

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.