The ongoing exploitation of our natural and human resources, in the name of profit and gain, has resulted in the gradual extinction of rare species, the deforestation of lands, the pollution of the air, the erosion of the protective layer of our atmosphere, global warming, erratic climate change, the spread of hunger and disease, and the increase in the gap between the rich and the poor, the haves and the have-nots. For the first time in history, a global outcry and condemnation of such practices has brought multinational, regional and local powerhouses to their knees. In the name of saving face, big businesses have no other choice than to venture into the uncharted waters of sustainable corporate citizenship.
Global solutions... Last year, during the annual World Economic Forum in Davos, Switzerland, a groundbreaking new business ranking initiative was launched presenting to the world models of “best-case” practices. The list identified the “100 Most Sustainable Global Corporations” singled out for their creative ability to engage in business practices that synergized and standardized the concepts of profit, community development, and environmental protection as the business order of the new millennium.
The knots and bolts of corporate social responsibility (CSR)... Firms, businesses and corporations that engage in CSR activities understand that their success and survival depends first and foremost on how they can balance their need for profit with the need for sustainable advancement of human life on planet Earth. Whereas in the past, commercial success was marked by financial profit; today, it is benchmarked against 3 key performance indicators that describe the “triple bottom line.” Financial profit, community development, and environmental preservation, are fast becoming the key objectives of socially responsible businesses.
So are Saudi company’s practicing CSR projects as they should? Even though Saudi companies think they are engaged in CSR activities, in reality, these activities are almost always philanthropic and charitable. Random programs that sponsor training for employment and business start-ups have yet to prove their viability. Graduate trainees searching for jobs are still searching while potential entrepreneurs are still caught up in the bloated bureaucracy of regulations. As good intentioned as some of these projects may be, they have forgotten to abide by the core concept underlying all CSR activities: The concept of sustainability.
The Institutionalization of CSR practices as a prerequisite to sustainability. Today, the concept and practice of CSR is no different from any ordinary business practice. CSR is becoming a measurable scientific management approach that has a balanced score card monitoring system categorized by key performance indicators and evaluated by a company’s triple bottom line. This approach to CSR is consistently becoming part and parcel of the main operating system of corporations and organizations, and companies that venture into this field need never underestimate the importance of detailed planning, execution, monitoring and evaluation.
Success stories... For those interested in adopting CSR management practices, a virtual world of information and a deluge of downloadable tools such as start-up manuals, process checklists, and best-practice case studies are readily available on the World Wide Web. However, no quantity of tools will ever be a substitute to learning from the success stories of recent companies by way of example. Following are two such success stories. The companies described have managed to reach new consumer markets, develop local workers, create efficient supplier systems and receive high returns on their socially responsible investments - by simply using their core business resources to fulfill the needs of underprivileged communities.
J.P. Morgan Chase — a global financial services company-made a strategic commitment to use the company’s core business (credit and finance) to provide affordable credit services to low-income individuals. This initiative resulted in providing capital and credit to a set of non-traditional customers in a responsible manner, and as a means of empowering them to economic independence. By opening this window of opportunity for this marginalized and underprivileged community, J.P. Morgan’s creative strategy enabled the company to access new markets and to widen its client base.
Cisco Systems — a global company in Internet networking was selling its products to high schools and other educational institutions. An opportunity arose as the company realized that its clients lacked the technical expertise needed to maintain and service the network equipment. As a result, Cisco began training teachers to do that job. Eventually, students picked up on this initiative and began attending the training sessions with great success. This gave Cisco the idea to systematically train students to maintain the equipment themselves and to engage them to use this technology to get quickly up to scale. As a result, “The Network Academy Program” was launched. This academy now trains and certifies youth and adults from low-income communities to install, service, operate and maintain network routers. The program emerged as an effort to address the most pressing issue affecting Cisco’s industry: The shortage of information technology workers worldwide and the bridging of the “the digital divide.
As these two success stories show, the task of CSR enterprise is nothing more that a paradigm shift that focuses on business as well as community development. Emulating the creative processes of J.P. Morgan and Cisco Systems is just a jump-start example of how some Saudi companies might go about CSR activity. The launch of the top global sustainable businesses last year is an initiative that we need to seriously consider. Each year Arab News exhibits the Top 100 Saudi Companies in an annual insert. Can we dare to hope that next year Arab News will include a new category listing the Top 10 most sustainable Saudi ones?
(Fatin Yousef Bundagji is management and development consultant.)