Top CSR Trends in Saudi Arabia - Report

A STUDY BY

Although traditionally CSR has been seen as a philanthropic practice, most businesses are now understanding the value it adds to the bottom line.

المسـؤولـيـة االجتماعية لـلشـركـات – السـعـودية ٢٠١٤

SAUDI ARABIA 2014

© Informa Middle East. All rights reserved www.csrsummitsaudi.com/report 1

The popularity of Corporate Social Responsibility (CSR) is growing. In a country like Saudi Arabia, CSR initiatives are driven by strong sociocultural factors which already promote such values. Although traditionally it has been seen as a philanthropic practice, most businesses are now understanding the value it adds to the bottom line.

A recent study done by Informa Middle East, for which in-depth interviews were conducted with experts and over 150 professionals in the CSR sector participated in a survey, revealed several CSR trends in the Kingdom. These trends encapsulate the current status and the future potential of the sector in Saudi.

Dr. Haifa Jamal Al-Lail, President of Effat University, said, “Corporate Social Responsibility (CSR) has become increasingly important in recent years. Demonstrating responsible business practices to customers, employees and other key stakeholders are now a priority, and the demand for such organisations to achieve this is higher than ever. The global movement of employees has both environmental and social impacts, but despite the increased corporate focus on CSR, employee mobility departments are not addressing these issues.”

LoST in TrAnSLATion

The first trend that both interviewees and survey respondents agreed upon is the ambiguity of defining CSR, as it remains unclear to many professionals in Saudi Arabia.

Over 60% of local professionals confirmed that there is a vague understanding of the concept in general, and 70% agreed that it is commonly confused with corporate philanthropy.

While corporate philanthropy entails no financial benefit to the business, a well-developed CSR strategy is meant to feed back into the company’s bottom line.

Another major difference between the two concepts is evident where CSR has to be incorporated into the overall business strategy. In philanthropic practice, the charity function does not have to be aligned with the overall company’s objectives. For instance, any company can contribute to building a mosque, which is quite common across the Kingdom. On the other hand, a CSR strategy for a construction company would involve creating awareness among the employees, using environmentally friendly building materials, and assigning shorter hours to the workers.

Top CSR TRendS in Saudi aRabia


Up to 60% of CSR professionals indicated that there is a low level of awareness among senior management

“Education is one of the most important areas since it reflects back on youth, entrepreneurship, societyand business.It almost affects all aspects of life. If a society owns a proper well established education system, it will rise and flourish in all aspects”

This lingering confusion is perhaps a result of the fact that the return on investment of CSR initiatives tend to generate long term results. Some of these long term benefits include attracting a wider base of customers, reducing costs through waste reduction and energy conservation, and attracting potential stakeholders.

In addition to this lack of understanding, up to 60% of CSR professionals indicated that there is a low level of awareness among senior management. This can be detrimental to implementing CSR because the key to having a successful CSR strategy is by engaging the organisations’ decision markers.

However, some companies seem to be getting past these challenges. Dipankar Gosh, Regional Partner for Clean Energy and Sustainability Services at Ernst & Young, said, “For years, CSR in Saudi Arabia has been focused primarily on corporate philanthropy and community engagement. Today, this is still largely the case across many of the companies in the country. However, some organisations, following global international benchmarks, are introducing a strategic approach to CSR and focusing on addressing the social and economic challenges. CSR is now increasingly being viewed as a tool to enhance competiveness – this would eventually contribute to Saudi Arabia’s future national development.”

Top ChALLengeS FACing CSr proFeSSionALS in SAUDi

Defining CSr

Believe that senior management has a low level of awareness about CSr

CSr commonly seen as corporate philanthropy

60%

60%

70%

DeveLopmenT & DiverSiTY

Two more areas that are critical for sustainable development have been identified by our research to be youth development and gender. The former garnered a lot of votes with over 87% for education and 46% for youth. This has been a concern due to several reasons.

87%

educ

atio

n

46%49%

21%

Yout

h d

evel

opm

ent

empl

oym

ent

Gen

der

div

ersi

ty

Top FoCUS AreAS

“Education is one of the most important areas since it reflects back on youth, entrepreneurship, society, business…etc. It almost affects all aspects of life. If a society owns a proper well established education system, it will rise and flourish in all aspects,” Dr. Jamal Al-Lail said.

Many of our experts shared the same view regarding this issue. Dr. Murya Habbash from King Khalid University, said.

“Youth development is a top priority and that includes training and education so we can bring up a generation that embeds the culture of giving and sharing”

This rapidly growing young population has very limited extra-curricular activities to engage in. Improving education and youth development will help create a valuable asset which, if left unchecked, will add burden to unemployment in the near future.

The phenomenon of the youth bulge where a large share of the population is comprised of children and young adults indicates that up to 50% of the Kingdom’s population is under the age of 25

Alan Diaz, Senior Vice President for Europe, Asia, Middle East and Africa at Laureate Education, said, “The only way forward is around employability. The biggest challenges that we have in the MENA region is around how kids are not yet workforce ready … Our experience in Saudi Arabia has been exactly about that where the government has realised and fostered the idea that on the one hand Saudisation is a good thing - and it certainly is - but on the other hand the resources to provide the requisite level of skills for Saudisation are not there. That’s where we step in to help the government [in higher education] to achieve the outcome of employability that were not created in high schools or the systems that existed before,” he added.


“Improving education and youth development will help create a valuable asset which, if left unchecked, will add burden to unemployment in the near future”

“The connection between CSR and engaged employees continues to grow; the more the institution actively pursues worthy environmental and social efforts, the more engaged its employees are”

Over 20% of the survey respondents believe that gender diversity is key for national sustainable development and many CSR experts echoed the same opinion in individual interviews. Both gender diversity and youth development play a crucial role in determining national employment trends.

Gosh said, “There is a focus on diversity & human rights: minimising gender bias and advancing the equal opportunities agenda across the Kingdom.”

Nael Fayez, Chief Executive Officer at Saudi Enjaz Program, agrees with Gosh on this point. “It is my belief that - with the changing Saudi economy, which is highly demonstrated by the Saudi economy joining the G20 and the high unemployment issue – the community services and contribution from corporates working in the Kingdom should be directed mainly towards preparing the next generation of entries to the job market, therefore an investment should be focused to gender equalities and providing females with equal developmental opportunities and for preparing Saudi youth in general in work readiness focus programs,” he said.

“Community services and contribution from corporates working in the Kingdom should be directed mainly towards preparing the next generation of entries to the job market, therefore an investment should be focused to gender equalities and providing females with equal developmental opportunities and for preparing Saudi youth in general in work readiness focus programs”

promoTing CSr iniTiATiveS

Another trend that was highlighted by our experts’ insights and survey results is that many companies in Saudi Arabia are facing challenges when it comes to promoting their CSR programmes. Essentially, marketing of CSR initiatives should include six main elements.

A) Engaging and educating internal stakeholder should take centre stage. Dr. Jamal Al-Lail confirms this. She said, “The connection between CSR and engaged employees continues to grow; the more the institution actively pursues worthy environmental and social efforts, the more engaged its employees are.”

b) Once involved, the organisation’s staff will need to contribute and share the company story through various channels under the umbrella of the brand, engaging the target audience.

C) The marketing campaign should also include credible messages by backing up statements with appropriate facts and figures.

d) Communication should occur through a series of relevant messages in order to keep the theme of the initiative aligned with the overall objectives.

E) Seek the endorsement of key influencers and opinion leaders in the social space.

f) Finally, measuring the KPI’s and ROI’s in every step throughout your CSR journey. This will enable you to test different methods and initiatives based on the response.

ShoULD CSr Be mAnDATorY?

While building the case for CSR still needs a push, none of the experts that we interviewed agreed with the idea of making it mandatory by the government. Not only was this the case for experts in Saudi, the same opinion was echoed by CSR professionals across the GCC.

While building the case for CSR still needs a push, none of the experts that we interviewed agreed with the idea of making it mandatory by the government. Not only was this the case for experts in Saudi, the same opinion was echoed by CSR professionals across the GCC.

Gosh said, “CSR and sustainable development initiatives require a great deal of innovative thinking and consideration of strategic issues that an organisation can leverage on to drive growth. A mandatory CSR approach risks to drive solely compliance-based initiatives, where organisations simply tick the boxes without any genuine effort; programmes, which actually benefit the organisation and the society, may be ignored. Instead, the government would need to focus on creating the right environment in Saudi Arabia – to pave the way for the right engagements & partnerships, to be proactive in the way it approaches business with regards to sustainability, and to help create the conditions for corporate initiatives to be aligned with the country’s broader development goals.”


BonUS: The Top SUCCeSS FACTorS oF A SUSTAinABiLiTY FrAmework

When asked about the top success factors of CSR in Saudi Arabia, our expert interviewees answered with the following:› Stakeholder engagement: Internally: to build understanding and support Externally: to gain opinion and perspective which in turn would help develop the

framework further› Setting metrics in place: a sustainability framework needs to be time-specific and to define

performance measurement mechanisms and KPI’s › Leveraging existing strengths within the business for social impact. An example of this

would be DHL using their logistic know-how to improve delivery of aid to disaster areas

ConCLUSion

Even though CSR professionals in Saudi Arabia are currently facing some challenges, these trends demonstrate a strong desire to overcome the difficulties for the sake of building a more sustainable future.

CSR and sustainability experts across the Kingdom will be discussing these trends and more at CSR Saudi arabia Summit from 24-26 november 2014.

For more information, visit www.csrsummitsaudi.com

CSR in Saudi Arabia: Trends & Developments

CSR IN SAUDI ARABIA - THE FACTS!

TOP 3 AREAS CRITICAL FOR SUSTAINABLE DEVELOPEMENT

CSR IMPACT ON CLIENTS

CSR IMPACT ON BUSINESSES

CSR IMPACT ON ENGAGEMENT

COMPANIES

CEOʻS INVOLVEMENT IN CSR

87%Education

49%Employment

78% Saudi organisations are actively engaged in CSR

66% have integrated CSR strategies

74% attract and engage their clients through CSR

CSR IMPACT ON THE COMMUNITY

Social ROI of companies

of companies

of companies

of companies

staff turnover

89% agree that sustainability led

organisations drive more customers

28% not involved

72% involved

“CSR is commonly seen as corporate philanthropy” - 70% agree

75% of CSR professionalsimproved bottom line

73% of CSR professionalsimproved overall business performance and operation

53% of CSR professionals find building a business case for CSR initiatives a challenge

89% of CSR professionals agree that sustainability performance is very important for corporate success

70% improved stakeholder engagement

75% engages with their employees

47% find collaborating and engaging with NGOs a challenge

Education & Saudisation

are what companies are

focusing on to deliver

long-term benefitsEducation & SME development are the latest CSR trends within Saudi organisations

60%

of organisations

foster innovation

through CSR

Saudi on regional CSR 40% of Saudi CSR professionals believe

regional organisations are actively adopting

CSR into their businesses, while 38% disagree

75% of organisations have an improved impact on local community development

CSR IN 2014 VS 2013

46%Youth

operating outcomes

organizational performance

CSR and sustainability experts across the Kingdom will be discussing these trends and more at CSR Saudi Arabia Summit - 24-26 November 2014

SAUDI ARABIA 2014

For more information, visit www.csrsummitsaudi.com Source: Results are from a survey done with 170+ organisations and professionals in Saudi Arabia

55%

54%

40%52%

Download our CSR Saudi infographicsVisit www.csrsummitsaudi.com/infographic


المسـؤولـيـة االجتماعية لـلشـركـات – السـعـودية ٢٠١٤

SAUDI ARABIA 2014

#CSRSummitKSA

Media Partners

Organised byPOWered by

www.csrpulse.com

delegate Chair and lunCh sPOnsOr

teChnOlOgy sPOnsOr OffiCial Pr PartnerbrOnZe sPOnsOr

headline sPOnsOr PlatinuM sPOnsOrs gOld sPOnsOr

Top CSR Trends in Saudi Arabia - Report

Business

Transcript of Top CSR Trends in Saudi Arabia - Report