Middle East

Beyond branding: CSR as a tool for competitiveness and productivity

Corporate social responsibility provides competitive advantage in an evolving business environment.

By Tatjana de Kerros

The current economic and social climate in the UAE has put competitiveness, sustainability and responsible business at the top of the agenda. Whilst corporate social responsibility (CSR) practices have been controversially associated with improving brand recognition and enhancing a company’s reputation, this has neglected CSR’s potential of improving efficiency, productivity and market orientation. Rather, having a CSR strategy embedded within a business model not only serves in gaining a competitive advantage by increasing reputational appeal; but responds to changing stakeholder demands in an evolving environment.

The Dubai Chamber and PepsiCo launched the first comprehensive study of CSR and corporate governance in the UAE, finding 42% of respondents believe CSR increases productivity. However, 66% of companies in Dubai cited that a lack of awareness and financial resources prevented them from taking part in CSR initiatives.

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04:33 pm by csrwiretalkback[65 notes]

Taking the Economic Road Less Traveled

“I took the one less traveled by. And that has made all the difference in the world.” -Robert Frost

By John Perkins

As the events in the Middle East and the tragedy of Japan’s earthquake continue to unfold, we are called upon more than ever to transform the U.S. government, one that relies heavily on predatory capitalism. We are witness to truly historic changes in global leadership that will affect generations to come. The old power brokers are being forced to loosen their militaristic grip. Japan, a country that has been brought to its knees, must rebuild and re-think its alliances, and in doing so will change the balance of geopolitics.  

At home, our budget lies shattered; backbiting political leaders swap tales of how they want to cut aid to those who can least afford it, while doing nothing to curb runaway military spending. Faced with our current economic, educational and energy crises, we must reject the road populated with Hummers, pollution and homeless vets returning from war without support. We must take the economic road less traveled.

We must build a new road that calls for Wall Street to be held accountable for the economic crisis it created through skimming profits and developing new and riskier financial tools. We must tell President Obama and all our elected officials the old formula of benefiting the few at the expense of the many must stop now.

We as citizens must demand a transparent accounting system where the corporatocracy can no longer operate its dizzying and disastrous shell game. We must demand change now so institutions representing we the people (including unions) are strengthened and the true voice of the people is heard over the empty rallying cries of Wall Street and its continual and criminal theft of hard-earned American dollars.

We cannot become so wrapped up in debates that only focus on the current economic crises and forget to address the systemic problems. We must stop letting partisan politics and special interest groups distract us from enacting laws that will rid us of the mutant virus form of predatory capitalism and offer instead a healthy system that demands corporations serve the public interest.

We cannot allow indicators of “good news” like temporary increases in the stock market, tiny spikes in GDP and payoffs of loans by bailed-out banks to soothe us into believing things have returned to “normal.”

We’ve seen the consequences of allowing the bail out of banks, insurance companies, automobile manufacturers and the executives who bulldozed our savings. None of these short-term fixes solved the systemic issues of predatory capitalism. Our present system is a failure. There is no “returning to normal” – that simply is not an option. The economic road we’ve traveled has only led us to less.

We must change the parameters of the journey. 

So I ask you, as we witness continued layoffs, closing of schools, cuts in healthcare, financial aid, unemployment and veteran benefits, to take a stand. Follow your own passions; use your talents to demand change. Take whatever actions are most appropriate for you.

One thing we can all do is to sign petitions. I ask you to start right now; join me and the U.S. Solidarity Economy Network in demanding President Obama make those responsible for the economic crises pay for their crimes.

Please sign this petition in support of forcing Wall Street to pay.

I urge you to continue to support organizations that help to rebuild Japan and to keep a discerning eye on the Middle East. Remember there were no weapons of mass destruction in Iraq. Do not be lulled into believing that what is best for the corporatocracy is best for you.

About John Perkins

John Perkins is the author of bestsellers Confessions of an Economic Hit Man, The Secret History of the American Empire, and the new book, Hoodwinked: An Economic Hit Man Reveals Why the World Financial Markets Imploded – and What We Need to Do to Remake Them, among others.

Perkins is a founder and board member of Dream Change and the Pachamama Alliance, nonprofit organizations devoted to creating a stable, sustainable and peaceful world. He has lectured and taught at universities on four continents. He tweets as @economic_hitman.

Check his website for upcoming events JohnPerkins.org.

Talkback Readers: Can corporate capitalism evolve to serve the people? If so – how? Share your thoughts on Talkback!

08:06 pm by csrwiretalkback[7 notes]

Lesson from Libya: Despotism, Poverty and Risk

Companies concerned about sustainability need to factor political democracy - or lack of it - into risk analyses.

Originally posted on the CSRwire website.

By CSRwire Talkback Managing Editor Francesca Rheannon

In his acclaimed new book, The View From Lazy Point, the author-scientist Carl Safina writes, “Saving the world requires saving democracy. That requires well-informed citizens. Conservation, environment, poverty, community, education, family, health, economy — these combine to make one quest: liberty and justice for all.”

The corollary, of course, is that despotism leads to environmental and social havoc — which, we are learning, leads to political upheaval. From Soviet-era Eastern Europe to the oil-soaked Niger Delta to the smog-choked cities of China, the least democratic regions are the most polluted and large portions of their citizens live in poverty — and it’s only a matter of time before the political chickens come home to roost.

They’ve already alighted on the despotic regimes of northern Africa, of which Libya is the most extreme example. And access to food is the nodal point where the environment, poverty and political disenfranchisement meet.

The last time food prices skyrocketed was 2008, a year that saw food riots around the world. Back then, Muhammar Gaddafi warned, “We are thinking about our peace and security. We are disturbed by the rising prices of food in the world.” Prescient words — and since Gaddafi equates his country with his person, the words ring even more presciently as a prediction of his expected downfall.

The recent sharp rise in food prices was the spark to the flame fanned by decades of tyranny, beginning in Tunisia, spreading to Egypt and now roiling Bahrain, Algeria, Oman, Yemen and Libya. Libya imports fully 80% of its food; the other countries are also heavy food importers.

While other factors play a role, climate change has been the major driver behind higher food prices. 2010 was brutal for the climate — and agriculture. Drought and fires shriveled the Russian wheat crop by 30%; floods wiped out Canada’s and Australia’s wheat crops and decimated rice crops in Thailand and Vietnam (the world’s two biggest exporters), as well as in Pakistan (and, in 2011, Sri Lanka’s crop). Hot, dry weather has ruined Argentina’s soybean crop. In a globalized food system, catastrophe in one area, let alone many, brings high prices far afield. World food prices soared 32% in the latter half of 2010 and continue higher.

Oil prices have also been on an upward trend (contributing to the rise in food prices), even before pro-democracy revolutions began rocking the Arab world. You’d think Libya would be sitting pretty — 95% of its revenues come from oil and with prices up, foreign reserve coffers were swelling. But, of course, little of that wealth was shared with its citizens. According to the latest CIA statistics, 1/3 of Libyans live below the poverty line.

The link between poverty and despotism is clear in Libya. Like elsewhere, despotic governments don’t allow niceties like real labor rights. They also tend to be corrupt — and that creates burdens not only for their own citizens, but also for foreign companies doing business with them.

It’s instructive to read from the U.S. Commercial Service’s website, BuyUSA.gov, about doing business in Libya. (The entry predates the current troubles by several years):

    Despite the country’s recent economic growth, unemployment remains high. In addition, Libya’s ambiguous legal structure, often-arbitrary government decision-making process…and various structural rigidities have posed impediments to foreign investment and economic growth.

One of those impediments has been the fact that the lion’s share of business enterprise has been dominated by Gaddafi and his family. “It’s totally corrupt,” one Libyan corporate investigator told one New York Times reporter. “This is just how business works in Libya.” A year ago, Forbes stated in reference to Libya, “foreign businesses are always at risk of political or arbitrary interference, though these risks can be managed.”

But after trade sanctions against Libya were lifted in 2004, companies in the U.S., U.K., France, Germany (Italy, a major trader with Libya, never stopped) — the major Western democracies — were falling all over themselves to do business with Gaddafi, Inc. Libya was one of North Africa’s top performing economies, and, as BuyUSA.gov stated, “With proper planning and foresight, U.S. companies can take advantage of commercial opportunities in almost every sector, from oil and gas to agriculture to telecommunications and tourism.”

Well, maybe not so much right now. Companies with exposure to Libya have been hit with stock jitters and an Italian index fund with 18% exposure is down 4.2%. Occidental Petroleum — with Amerada Hess and Chevron Texaco, the company won big oil contracts in the first auction after sanctions were lifted — has been trading down.

The larger world economy is also threatened with rise in crude oil prices, partially fueled by worries over unrest in Libya (and what might be next in the Arab world). The lesson to be drawn is that dictatorship is a risk for companies everywhere — with globalization, no company or economy is immune from political sins of others.

So what can companies do? One place companies can go for information about anti-democratic regimes is the Business And Human Rights Resource Centre. The complicity section on the organization’s website provides guidance on human rights standards, publishes key reports and lays out case studies for analysis.

But more is needed — maybe something along the lines of the Carbon Disclosure Project. A Despotism Disclosure Project would have to apply to all forms of undemocratic rule — not just dictatorships, but also oligarchies and plutocracies (U.S. — be forewarned). The winds of democracy are blowing strong; companies that want to sail them, rather than get blown over, would do well to make democracy a central indicator of their planning.

About Francesca Rheannon

CSRwire Talkback’s Managing Editor is Francesca Rheannon. An award-winning journalist, Francesca is co-founder of Sea Change Media. She produces the Sea Change Radio’s series, Back to The Future, and co-produces the Interfaith Center of Corporate Responsibility’s podcast, The Arc of Change. Francesca’s work has appeared at SocialFunds.com, The CRO and E Magazine, and she is a contributing writer for CSRwire. Francesca hosts the nationally syndicated radio show, Writers Voice with Francesca Rheannon.

Talkback Readers: Should companies impose sanctions on despotic regimes? Weigh in on Talkback!

08:38 pm by csrwiretalkback[7 notes]

CSR Lessons for Middle Eastern Autocrats

If you were going to advise the king…

By Hank Boerner

Assignment: Fly over to visit the Middle East and provide advice on how to handle the events in the Arab streets. Responsibly. Using good governance practices. If you got such a call from one of the region’s leaders, all odds being from a dictatorial ruler, what advice would you pack in your kit as you winged off for the meeting? This is delicate, for sure – not like giving advice to a CEO or board chair. This is a high stakes meeting with the potentate – who has the power to make your life quite miserable. (Remember the Queen in Alice-in-Wonderland: Off with her head, was the cry!)

What do you say to a firmly-entrenched dictator, probably wearing a general’s stars or at least surrounded by generals? Are you direct and to the point—or, do you carefully build the case and let the facts speak for themselves? You are entering the fear zone – what do “they” in the streets want? Expect? Who are you to say? Make believe you are entering the realm…of a CEO!

First, consider the setting and culture: any talk about “responsibility” will likely be in our Western context of responsibly serving the needs of the country’s men, women and children, and future generations. Some Middle East countries do that in an organized way, such as Kuwait (with its Future Generations sovereign wealth fund, created with oil revenues in 1954). “Sharing” the wealth beyond that may be an uncertain and unwelcome suggestion to the ruler.

Talking about “governing” styles is tricky – in the US and other Western democracies, power is given over or power yielded to the ruling class by the governed. Hard concept to wrap your mind around if you are a dictator. A government “of, by and for the People” rings of respect in both directions – we expect no less. But a government of the monarch’s ruling class, in all likelihood with power seized by them, and maintained by forceful means (and fear) is not quite “of, by and for” – and the suggestion to follow US example will be filled with challenges, most uninvited and unwelcome. (In my experience in the region, the example of the US maintaining an official system of slavery until just 146 years ago is brought up. The Wild West days of penning Native Americans on reservations is another example mentioned.)

“Freedom” is another tricky concept for this ruler you will be advising – what kind, how much and for whom? Freedom to openly criticize the ruler? Look at Egypt; don’t want to go that way, do we? (In 18 days the dictators’ rule is over.) Is that what you are suggesting? The lesson of another Eastern regime may be instructive here. China had its Tiananmen Square showdown with the demanders of democracy. The brutal crackdown was followed by an easing of rule and a tentative bargain between rulers and citizens. Entrepreneurship and capitalism of a short flourished; freedom to make money was granted by the communist rulers; just don’t get involved politically in threatening the regime. 

The US has a long-standing respect for freedom. President Franklin D. Roosevelt set out his famous “Four Freedoms” as a global war was spreading, in his January 1944 State of the Union speech to congress: “In the future days, which we want to make secure, we look forward to a world founded upon four essential freedoms…” These were freedom of speech and expression; freedom of worship; freedom from [economic] want; freedom from fear. This would require a new world order, the president said – the moral order. “That kind of world is the very antithesis of the so-called new order or tyranny which the [current] dictators seek to create with the crash of a bomb…”

We are not quite there yet – but we have come a long, long way. Former empires are fragments of what they were for France, England, Italy, Germany, Holland and other Western nations. Across the world, freedom has rung out since 1946 and the end of WWII. There were a dozen or so democracies “united” in opposing the dictators in 1942. Today there are 75 or 80 different forms of democracy in the world – constitutional, representative, liberal, participatory, socialist, majority rule, democratically-elected and so on. Within the global community of 200+ nations, more than a third has some kind of democratic process. A long way to go, yes, but a long way has been traveled since January 1941. The words of the US president still ring across the frontiers of earth to inspire people yearning for freedom.

Perhaps the best advice is to offer an observation: the winds of freedom are blowing and change is inevitable. As the business philosopher Lee Iacocca commanded: Lead, follow or get out of the way! The time has come: act responsibly and prepare your people for change. They are certainly preparing change… for you! Act responsibly. Serve up freedom. Not easy!

About Hank Boerner

Hank Boerner is Chairman of the Governance & Accountability Institute in New York City and is co-author with Mark W. Sickles of the book, Strategic Governance: Enabling Financial, Environmental and Social Sustainability (published 2011 by the Institute). In the volume the authors explore links between culture, risk management, strategies and corporate responsibility.

Talkback Readers: What CSR advice would you give, if you were advising the ruler of Libya, Bahrain, Yemen, Iran, etc.? Share your thoughts on Talkback!

07:46 pm by csrwiretalkback[4 notes]
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CSRwire is the leading source of corporate social responsibility (CSR) and sustainability news, reports, events and information.

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