Achieving corporate sustainability in the Middle East

This article is available in Arabic.

Corporate sustainability has been on a steady rise for the last two years, as more companies join the effort in meeting the requirements set by the UN for sustainable development.

The United Nations define sustainable development as actions “meeting the needs of the present without compromising the ability of future generations to meet their own needs.”

While sustainable development starts at the country level, and trickles down to societies, communities and businesses, corporate sustainability is directly driven by companies both in the private and public sectors.

According to the UN Global Compact Guide to Corporate Sustainability, there are five defining features that businesses must comply to in order to achieve corporate sustainability:

• Principled business: For any company seeking to be sustainable, it begins with operating with integrity – respecting fundamental responsibilities in the areas of human rights, labour, environment and anticorruption.
• Strengthening society: Sustainable companies look beyond their own walls and take actions to support the societies around them. Poverty, conflict, an uneducated workforce, and resource scarcity, for example, are also strategic issues for business success and viability.
• Leadership commitment: Effecting change begins with the company’s leadership who must send a strong signal throughout the organization that sustainability counts, and all responsibilities are important.
• Reporting progress: Strategic reports must be produced, showing measurable gains and losses and providing the company’s stakeholders with an account of their efforts to operate responsibly and support society.
• Local action: Companies exist and act within nations and communities with highly varying expectations of what responsible business means.

As the above is universal, we zoom in on companies in the Arabian Gulf countries – particularly because this is essentially an oil-exporting region that’s committed to shifting from oil-based to more diversified economies. In that sense, companies within this region are at the forefront of corporate sustainability and must be the force driving change in this arena.

So how are these companies leading corporate sustainability? What is the economic landscape they operate in, and what are the challenges they are faced with?

Countries in the Arabian Gulf have set clear 2030 visions that allow these companies to operate within a well-defined framework. While each country has defined its own vision, many have common goals in place, mainly revolving around:

• Human development
• Social justice
• Economic development
• Environment preservation

On a human development level, Saudi Arabia for instance pledges to reduce unemployment rate to 7% by 2030, and increase women participation in the workforce to 30%.

According to Zuhair Almaghrabi, Chief Human Resources Officer at the National Housing Company, the investment arm of the Saudi Ministry of Housing, “sustainability must be instilled in people as a culture and a mindset first and foremost. While it starts at the leadership level, it needs to be effectively applied through every level of the organisation, or else we will be exposing ourselves to risk. It is one thing to claim to be sustainable, and another thing to effectively apply with all stakeholders on board. At NHC, we have been actively working on building a highly diversified workforce, where the diversity of ideas and cultures only serves better and richer decisions. On the ground, we have launched the sustainable building platform, which aims to provide a number of services that contribute to the sustainability of housing units through compliance audits, sustainability evaluations and contractors’ quality inspection services. Moreover, we have been relentlessly working with our people and developing them to establish a culture of sustainability, and an efficient process of forward-thinking.”

This comes at a time where real actions need to be put in place to secure a better future for the generations to come, explains Almaghrabi.

To build on this, Professor Paolo Taticchi, OMRI – UCL School of Management explains that while he was teaching sustainability in one of the corporate MBA programmes offered by Saudi Aramco, he was impressed by the gender balance of the cohort which was probably higher than in many other MBA programmes you find in the UK or US. “I also found talented managers who were open to discussing sustainability problems and had great awareness of the importance of this topic for the future of their firm and country,” he continues.

On a social level, Qatar aims to develop a just and caring society based on high moral standards, and capable of playing a significant role in the global partnership for development.

Regarding economic development, Kuwait seeks to position itself  as a centre for trade and finance, creating the favourable conditions for boosting foreign investment and advancing the role of the Kuwaiti private-sector in economic growth, education, training of young people and overall development.

When it comes to environment preservation, The United Arab Emirates have a vision that encompasses the five main pillars of climate change, clean air and noise pollution, water resources, biodiversity, habitats and cultural heritage, and waste management.

Companies like Masdar, one of the leaders in the region for renewable energy projects, have not only contributed to the adoption of solar and wind energy solutions but have helped to spread the culture for these types of projects, explains Professor Taticchi.

Professor Taticchi has worked in Dubai for several years now, and has noticed an incredible local culture open to change and innovation. He believes that this is the result of the strong vision of Sheikh Mohammed bin Rashid al-Maktoum, who has pushed the city to embrace the challenges and opportunities associated to building a more sustainable future.

“The impactful work of the Dubai Future Foundation is a great example that Dubai is walking the talk,” Professor Taticchi concludes.

All countries have equally set in place clear strategies to reduce their carbon footprint, and shift to alternative, green energies.

This landscape constitutes a solid and favourable environment for companies to shift towards the corporate sustainability paradigm. This however, requires long term planning and a clear vision to where leaders want to take their companies, and how they envision the shift on a human, social, economic and environmental level, to follow in the steps of the countries they operate in.

How can companies practically operate to facilitate the shift? Read our article on “The path towards a sustainable future in the Middle East” here.