The 2nd Kuwait CSR Conference & Exhibition 2017 مؤتمر ومعرض الكويت الثاني للمسؤولية الاجتماعية

1. CORPORATE SOCIAL
RESPONSIBILITY
KHALID ALQOUD
Chairman
Bahrain CSR Society

2. WHAT IS CSR?
Corporate social responsibility (CSR) refers
to business practices involving initiatives that
benefit society.
CSR is becoming more mainstream as
forward-thinking companies embed
sustainability into the core of their business
operations to create shared value for business
and society and to implementing "greener"
business operations.

3. DIFFERENCE BETWEEN CSR
AND COMMUNITY SERVICES
There is basically no difference. Community
service is one part of Corporate Social
Responsibility.
Apart from community service CSR covers other
aspects of responsibility including
Environment, supply chain management,
stakeholder management and engagement,
dealing with customers and suppliers, Human
Rights, employee relations etc.

4. BENEFITS OF CSR
• Increased employee loyalty and retention.
• Increased in the quality of product and services.
• Increased reputation and brand image.
• Greater productivity and quality.
• Strengthened brand positioning.
• Enhanced corporate image.
• Increased ability to attract, motivate, and retain
employees.
• Increased sales and market share.
• Increased appeal to investors and financial analysts.

5. CSR
FRAMEWORK
• Discretionary Responsibilities
• Ethical Responsibilities
• Legal Responsibilities
• Economic Responsibilities

7. ECONOMIC
RESPONSIBILITIES
The first criterion of social responsibility is economic
responsibility. The business institution is, above all,
the basic economic unit of society. Its responsibility
is to produce goods and services that a society
wants and to maximize profit for its owners and
shareholders.
The purely profit-maximizing view is no longer
considered an adequate criterion of performance in
the world in general. Treating economic gain in the
social as the only social responsibility can lead
companies into trouble.

8. LEGAL
RESPONSIBILITIES
Legal responsibility defines what society deems
as important with respect to appropriate
corporate behavior. Businesses are expected to
fulfill their economic goals within the legal
framework.
Legal requirements are imposed by local
councils, state and federal governments and
their regulating agencies. Organizations that
knowingly break the law are poor performers in
this category.

9. ETHICAL
RESPONSIBILITY
Ethical responsibility include behavior that is
not necessarily codified into law and may not
serve the organization’s direct economic
interests. To be ethical, organization’s decision
makers should act with equity, fairness and
impartiality, respect the rights of individuals,
and provide different treatments of individual
only when differences between them are
relevant to the organization’s goals and tasks.

10. DISCRETIONARY
RESPONSIBILITY
Discretionary responsibility is purely voluntary and
guided by an organization’s desire to make social
contributions not mandated by economics, laws or
ethics. Discretionary activities include generous
philanthropic contributions that offer no payback to
the organization and are not expected.
Discretionary responsibility is the highest criterion
of social responsibility, because it goes beyond
societal expectations to contribute to the
community’s welfare.

11. BARRIERS TO APPLYING
FOR CSR

12. BARRIERS TO
APPLYING FOR CSR
• Improved environmental sustainability is not valued in
internal capital allocation decisions. Companies often lack
the internal mechanisms to properly value the benefits of
managing environmental sustainability such as reduced
exposure to energy price volatility, water risks and other
environmental impacts of operations and supply chains.
• The goals of corporate sustainability teams and financial
teams are not well-aligned. Divergent priorities mean that
sustainability teams and financial teams often do not effectively
engage each other. As a result sustainability teams are brought
into project planning too late to influence project design and
cannot make an effective case to financial decision makers.

13. BARRIERS TO
APPLYING FOR CSR
• Companies lack metrics to account for external
environmental costs .Without a clear method to
price external costs, such as the risk of climate
change to the society, companies cannot factor this
expenses into their traditional decision making.
• Environmental factors such as climate change
and water scarcity are not being fully integrated
into long term business strategy. Companies
often miss opportunities to improve financial
performance through environmental improvements
in processes and product lines.

14. CSR’S SEVEN BEST
PRACTICES

15. CSR’S SEVEN BEST
PRACTICES:
• Set Measurable Goals: Return on investment has
always been a difficult thing to measure. So you can
implement small changes, like minimizing waste and
resource use are changes that can be developed into
a memorable story about how sustainability efforts
support your company’s overall corporate strategy.
• Stakeholder Engagement: Leaving their
stakeholders out of the loop is one of the top mistakes,
it is important for everyone to be on the same page.
Stakeholders can help by partaking in the regulatory
approvals process, improving relationships proactively,
or solving CSR roadblocks and potential crises.

16. CSR’S SEVEN BEST
PRACTICES:
• Sustainability Issues Mapping: This approach uses
interactive maps to help prioritize and narrow down key
issues, saving your company time and money during the
initial research stage.
• Sustainability Management Systems (SMS): Develop
a framework to ensure that environmental, social, and
economic concerns are considered in tandem throughout
your organization’s decision-making processes.
• Lifecycle Assessment: Product design is critical. A
cradle-to-cradle approach exhibits your company’s
creativity and innovation and can, consequently, improve
your bottom line.

17. CSR’S SEVEN BEST
PRACTICES:
• Sustainability/CSR Reporting: CSR reporting has
increased in popularity over the past few years, due to
increasing government regulations as well as self-regulation
by forward-thinking companies. It’s important that your
consumer base has easy access to your latest and greatest
efforts, in a way that doesn’t minimize what you’re doing.
• Sustainability Branding: Transparency is key in
sustainability branding. It will ensure that your company
remains competitive in today’s consumer-savvy market. For
example, Clorox Green Works, when endorsed by the Sierra
Club, was able to capture 42% of the market share in their
first year! The market for natural cleaning products has since
increased, paving the way for smaller brands like Seventh
Generation and Method to reach to a broader customer base.

18. CSR COMMUNICATION AND
REPORTING

19. CSR COMMUNICATION BRINGS
COMPANY CERTAIN ADVANTAGES:
• Transparency - increased awareness of CSR activities
and ensure corporate transparency.
• Supervision of CSR activities – enables Comparison
Company publicly known liabilities of CSR with reality
and draws attention to the weaknesses in CSR corporate
strategy.
• Involvement of stakeholders - strengthens the position
of stakeholders and their involvement in company
decisions.
• Cross-sector cooperation - supports cross-sector
partnerships between businesses, government agencies
and non-profit organizations.

20. COMMUNICATION WITH CUSTOMERS
MAY BE DIRECTED TO:
• The production of safe and quality products and
services.
• Maintaining a permanent customer satisfaction.
• Provision of information beyond the core-
business enterprise.
• Fair prices.
• Compliance with marketing and advertising
ethics and consumer rights.
• High-quality after-sales service.

21. QUALITY CSR REPORT HAS TO
FULFILL FOUR MAIN ASPECTS:
• Credibility - the credibility of the report can be
supported by the commitment of top management,
description of corporate policy and introduction of
personnel responsibilities, data collection methods
and the objectives. Credibility is also influenced by
the level of key stakeholders involvement and it is
increased by an independent third party verification.
• Completeness - is based on the fact that CSR
report includes all business operations and offices in
the country and inform fully about the major areas
that impact of the organization on society and the
environment.

22. QUALITY CSR REPORT HAS TO
FULFILL FOUR MAIN ASPECTS:
• Significance - the company should
maximize the using of quantitative and
qualitative indicators to assess its social
responsibility.
• Appropriate form - the format of the report
has the important role-play and also whether
the report is clear, moderately long and
clear.

23. LATEST TRENDS IN CSR

24. LATEST TRENDS
IN CSR
• Demands for Disclosure .Companies are
becoming more transparent in their
operations. As part of a business model that
embraces corporate social responsibility,
companies are sharing more environmental,
social and governance disclosures.
• Creation of New Resources. Companies
nowadays are investing in the green
technologies and developing alternative
resources.

25. LATEST TRENDS
IN CSR
• Global Companies Acting Locally .Even
companies that operate on a global level are
recognizing the value of local markets and
supply chains. This is related to these
efforts are attempts at engaging employees
in volunteerism.
• Investing in Employees .Raising the pay
rates of the lowest earning employees is one
of the top trends in corporate social
responsibility.

26. CREATING VALUE FOR YOUR
BUSINESS THROUGH CSR

27. CREATING VALUE FOR YOUR
BUSINESS THROUGH CSR
There are three guiding principles:
• Concentrate your CSR efforts: the greatest
opportunities will come from areas where the
business significantly interacts with society
• Build a deep understanding of the benefits: be
open enough to understand issues both from a
business and a societal perspective.
• Find the right partners: those that benefit from
your core business activities and capabilities, and
that you can benefit from in turn.

28. TRIPLE BOTTOM LINE
OF CSR

29. TRIPLE BOTTOM LINE
OF CSR
• Economic Sustainability: This is the nature of a persistent
company.
• Social Sustainability: This gives the precedence on the
balance of economic power in the society .Competition in the
business arena is common, and encouraged, behavior, but
maximizing the bottom line in social terms requires that a
business foster an environment in which all can succeed.
• Environmental Sustainability: It stems from the recognition
that resources are not infinite and leads to the reasoning that
too much degradation will worsen our lives, our children and so
on. Members of the moral community ought not to cause any
harm to the people around them and the people who will come
later and so this bottom line values some protection of the
environment.

30. THE LINK BETWEEN CSR
AND REPUTATION

31. HOW ARE CORPORATE
REPUTATIONS CREATED?

32. USING CSR TO DRIVE
IMPROVEMENTS IN REPUTATION

33. BUSINESS CASE FOR CSR
COCA COLA BUSINESS CASE

34. COCA-COLA’S
PROFILE
Coca-Cola started its business in 1886 as a local soda
producer in Atlanta, Georgia (US) selling about nine
beverages per day. By the 1920s, the company had begun
expanding internationally, selling its products first in the
Caribbean and Canadian markets and then moving in
consecutive decades to Asia, Europe, South America and
the Soviet Union. By the end of the 20th century, the
company was selling its products in almost every country in
the world. In 2005 it became the largest manufacturer,
distributor and marketer of non-alcoholic beverages and
syrups in the world.

35. COCA COLA
CONFLICT
• Coca-Cola’s conflicts Several campaigns and
demonstrations followed the publication of a report
issued by the Indian NGO Centre for Science and
Environment (CSE) in 2003. The report provided
evidence of the presence of pesticides, to a level
exceeding European standards.
• Coca-Cola was also accused of causing water
shortages in – among other areas – the community
of southern India. In addition, Coca-Cola was
accused of water pollution by discharging
wastewater into fields and rivers surrounding Coca-
Cola’s plants in the same community.

36. COCA-COLA’S CSR POLICIES
POST-CONFLICTS
• Coca-Cola dedicated a page in the Corporate
Responsibility Review of 2006 to address the
controversy.
• Coca-Cola consisted of launching various
community water projects in India.
• Coca-Cola implemented a water stewardship
program and committed itself to reduce its
operational water footprint and to offset the
water used in the Company’s products through
locally relevant projects

37. COCA COLA’S
OBJECTIVES
• Reducing water use by improving water efficiency by 20% over 2004
levels by 2012. The latest data available from 2010 shows a 16%
improvement over the 2004 baseline.
• Recycling water through wastewater treatment and returning all
water used in manufacturing processes to the environment at a level
that supports aquatic life and agriculture by the end of 2010. On
September 2011, the progress observed concerning this target was
96%.
• Replenishing water used by offsetting the liters of water used in
finished beverages by 2020 through local projects that support
communities and nature (i.e. watershed protection and rainwater
harvesting). Currently, Coca-Cola reports that it holds a global
portfolio of 386 community water partnerships or community-based
replenish projects. In 2011, about 35% of the water used in finished
beverages was replenished.

38. HOW TO MEASURE THE
RETURN FROM CSR
ACTIVITIES

39. HOW TO MEASURE THE RETURN
FROM CSR ACTIVITIES
• Begin with small projects: Consider making small reforms over time
rather than tackling multiple, large projects simultaneously. Through
gradual transformations throughout the organization, it becomes easier
to not only secure funding for the sustainability and CSR efforts but to
also benchmark their impact.
• Poll your customers: Customer surveys and polls can be useful in
helping to gauge how changes in your organization’s sustainability and
CSR practices affect their perceptions of your company and brand
loyalty. Ask them if they notice and value any particular sustainability
and CSR initiatives and how that has impacted their perceptions of the
products or services your company offers.
• Leverage the success of other companies’ green efforts: Highlight
the successes of other large organizations which have already made
significant investments in their sustainability and CSR initiatives. By
sharing examples of these types of success stories it will become
easier to convince your management team of the importance of
applying those same principles to your own organization.

40. HOW TO MEASURE THE RETURN
FROM CSR ACTIVITIES
• Publicize your green initiatives: Perception is reality.
Therefore, publicizing your sustainability and CSR
initiatives will add tremendous value and credibility to
those efforts. Take advantage of opportunities to make
others aware of your commitment to being conscious of
the environment and a socially responsible company
through all marketing, public relations and sales
activities.
• Have realistic goals: Recognize that the tangible ROI
benefits of your sustainability efforts won’t happen
overnight, so it’s important to set realistic and achievable
goals that can then be built upon over time.

41. HOW TO EFFECTIVELY
CONVINCE SENIOR
MANAGEMENT THAT CSR
ACTIVITIES ARE WORTH
THE INVESTMENT?

42. WHY CSR IS WORTH
THE INVESTMENT ?
• Cost savings – One of the easiest places for a
company to start engaging in sustainability is to
use it as a way to cut costs. Whether it’s using
less packaging or less energy, these savings
add up quickly.
• Brand differentiation – In the past, brand
differentiation was one of the primary reasons
companies embraced CSR. However, as CSR
has become more commonplace, using it to
differentiate your brand is getting harder to do.

43. WHY CSR IS WORTH
THE INVESTMENT ?
• Customer engagement – What’s the point of doing
CSR if no one knows about it? Using CSR can help
you engage with your customers in new ways. Since
the message is about something “good,” it can often
be an easier way to talk to your customers. This is
an underused tool for business-to-business
company communication.
• Employee engagement – Along similar lines, if
your own employees don’t know what’s going on
within your organization, you’re missing an
opportunity.

44. WHY CSR IS WORTH
THE INVESTMENT ?
• Consumer’s Demand - Whether you are trying
to innovate your existing products, better market
them, and/or develop new products, be warned
that consumers want to know if it’s better for the
world.
• Employees Preference – Employees want to
work in a place where they feel that they are
making a difference in their country. Helping to
“make a better world” and making a
“contribution to society” are essential for their
ideal job.

45. WHY CSR IS WORTH
THE INVESTMENT ?
• Increase Access to Capital - CSR helps firms increase
access to finance. This is largely because the “Impact
Investing” field is growing dramatically. Major banks have
created large Impact Investing funds for the betterment of the
community.
• Develop New Markets and Improve Operations by Building
and Strengthening Partnerships - By engaging with social
causes in a variety of ways, your company can learn about
new geographies, cultures, markets, and product applications.
In addition, it can enable partnerships that protect market
share and increase distribution. New insights and partnerships
can be created by leveraging the diverse assets found within
your company, like its products, services, capital, networks,
and expertise.

46. HOW DOES CSR HELP
BUSINESSES AND
GOVERNMENTS?

47. HOW DOES CSR HELP
BUSINESSES?
• Reduced scrutiny and/or risk management - Corporations
are keen to avoid interference in their business through
taxation and/or regulations and risks. A CSR program can
persuade governments and the public that a company takes
health and safety, diversity and the environment seriously,
reducing the likelihood that company practices will be closely
monitored.
• The ability to have positive impact in the community
hence support public value outcomes - Public value is
about the value that an organization contributes to society. A
sound, robust corporate social responsibility framework and
organizational mindset can genuinely help organizations
deliver public value outcomes by focusing on how their
services can make a difference in the community. A classic
example is the case of the Lafarge Group as explained above
where the group has created a positive impact in the lives of
members of the local community living within that ecosystem.

48. HOW DOES CSR HELP
BUSINESSES?
• It encourages both professional and personal
development - Corporations are keen to avoid interference in
their business through taxation and/or regulations and risks. A
CSR program can persuade governments and the public that a
company takes health and safety, diversity and the
environment seriously, reducing the likelihood that company
practices will be closely monitored.
• It enhances relationships with clients - A strong corporate
social responsibility framework is essential to building and
maintaining trust between the company and clients. It can
strengthen ties, build alliances and foster strong working
relationships with both existing and new clients

49. HOW DOES CSR HELP
BUSINESSES?
• Media interest/coverage and good reputation - The mass
media is a very powerful tool that if made brilliant use of, can
make an organization realization its dream of reaching multitude
of audiences with its programs, products and services. Besides,
the mass media exists in different forms which an organization
can make good use of - paid media, owned media and nonpaid
media. The first two forms are always more expensive than the
last one: non paid media i.e. achieving media coverage without
paying a penny for it. This saves an organization millions that
can be diverted into others sectors to increase productivity and
profitability.

50. HOW DOES CSR HELP
BUSINESSES?
• Access to funding opportunities - It has been proven that
CSR does build the reputation of a business, which in turn
opens new business opportunities to the business, thereby
enlarging the business and improving the bottom line of such a
business. This means that a small business may take advantage
of the benefits of CSR to grow. In addition, most financial
institutions are beginning to look at other considerations in
granting financial assistance to businesses, which
considerations are considered by the institution; in addition to
the usual request for a business plan, financial statements,
financial projections and possibly a collateral facility. Your good
CSR record may come in handy in such a situation

51. HOW DOES CSR HELP
BUSINESSES?
• Enhancing your influence in the industry - When a business
takes CSR as a continuing commitment to the society, to behave
ethically, legally, by contributing to economic development; that
business irrespective of size is sending out a strong message of
where it stands when it comes to its stakeholders. The business
is seen as being committed to improving the quality of life of its
workforce and their families. It is seen as desiring to improve the
quality of life of its local community and the society at large.
• The Equity Group for instance, has achieved great influence in
the industry which has made it win accolades and prestigious
awards through its ‘Wings to Fly Program’. Today the group
enlists the support of MasterCard Foundation in running this
program.

52. HOW DOES CSR HELP
BUSINESSES?
• Saving money on energy and operating costs - What is
workable, practicable and effective for a business is to incorporate
the CSR initiative into their business systems or strategy. This way,
the business will not be spending money that it does not have. For
such a business, CSR becomes a corporate culture that everyone
breathes and drives within the business. The practice of CSR
within the business becomes a natural phenomenon with every
employee within the business structure from the manager or
business owner down to the most junior in the service line. For the
simple reason that everyone has a buy-in in the CSR initiative,
there is the willingness on the part of all your stakeholders to make
it work. It becomes ‘our initiative’ rather than your initiative. In terms
of operating cost; everyone wants to be seen to be doing the ‘right
thing’.

53. HOW DOES CSR HELP
BUSINESSES?
• Increase in customer retention - CSR makes every business
owner or manager to think beyond the profit margin. It embraces
the holistic concept of corporate responsibility which is very
essential to the sustainability of every business, big or small. When
your customers see that your business has a ‘heart’, they keep
coming back to patronize you, not because they cannot get the
product cheaper in the other shop, but essentially because they
have come to accept your business in the community as a
community building driver.
• Nakumatt chain of supermarkets knows this concept far too well.
When the organization introduced the ‘Think Green go Blue
(reduce, reuse and recycle)’ concept, it immediately won the heart
of environmentalists who immediately endorsed the concept. A
section of the supermarket’s customers talk of this as the main
reason why they still prefer the supermarket to others.

54. HOW DOES CSR HELP
GOVERNMENTS?
• The concept of corporate social responsibility (CSR) aims both to
examine the role of business in society, and to maximise the positive
societal outcomes of business activity. In practice, much of the
business activity that has so far been labelled ‘CSR’ has been driven
by the concerns of investors, companies, campaign groups and
consumers based in the world’s richest countries. National CSR
agendas in middle and low-income countries have been less visible
internationally, and have often not been labelled ‘CSR’. The result has
been CSR practices that are largely framed in rich countries, then
internationalized and transferred to other businesses and social
settings through international trade, investment, and development
assistance. The strategic challenge for governments at national and
local levels is how best to shape an agenda that has been largely
market-driven and responsive to concerns of rich country stakeholders.

55. HOW DOES CSR HELP
GOVERNMENTS?
• CSR movements and initiatives have emerged in countries such as
China, India, South Africa, the Philippines and Brazil, among others.
Governments of some middle-income countries facing major social
challenges have explicitly sought to engage business in meeting those
challenges, as with Black Economic Empowerment in South Africa, or
Presidential encouragement of business efforts to tackle poverty in the
Philippines. In developed countries too, there is increasing recognition
among companies that a ‘one-size fits all’ approach to CSR in
operations around the world is ineffective in responding to the business
drivers of socially responsible behaviour. The result has been
reinvigorated focus on themes of greater importance in middle and low-
income countries — including the value of sustainable local enterprise
and the role of business in poverty reduction.

56. WHAT IS THE ROLE OF
INDIVIDUALS IN CSR?

57. WHAT IS THE ROLE OF
INDIVIDUALS IN CSR?
• Social responsibility is an ethical theory, in which individuals are
accountable for fulfilling their civic duty; the actions of an individual
must benefit the whole of society. In this way, there must be a
balance between economic growth and the welfare of society and
the environment. If this equilibrium is maintained, then social
responsibility is accomplished.
• Moral values that are inherent in society create a distinction
between right and wrong. In this way, social fairness is believed
(by most) to be in the “right”, but more frequently than not this
“fairness” is absent. Every individual has a responsibility to act in
manner that is beneficial to society and not solely to the individual.

58. WHAT IS THE ROLE OF
INDIVIDUALS IN CSR?
• The theory of social responsibility and ethics applies in both
individual and group capacities. It should be incorporated into daily
actions/decisions, particularly ones that will have an effect on other
persons and/or the environment. In the larger, group capacity, a
code of social responsibility and ethics is applied within said group
as well as during interactions with another group or an individual.
• Businesses have developed a system of social responsibility that
is tailored to their company environment. If social responsibility is
maintained within a company than the employees and the
environment are held equal to the company’s economics.
Maintaining social responsibility within a company ensures the
integrity of society and the environment are protected.

59. LINKING CSR TO BRANDING
AND REPUTATION

60. LINKING CSR TO BRANDING
AND REPUTATION
• Reputation can be defined as ‘a stakeholder’s overall evaluation of
a company over time,’ this evaluation is made up from the
stakeholder’s experience of the visible
behavior of the company, as well as the images based on th
e company’s communication and in addition its symbolism in
comparison with its major competitors.
• What factors make up a company’s reputation? Key drivers of a
good reputation, include vision and leadership, products and
services, financial performance, treatment of staff, social and
environmental responsibility and emotional appeal. These factors,
they explain, change over time, reflecting changes in society in
general and business in particular. Yet, the researchers add, it’s
important to remember that “even if the drivers of reputation are in
place, a company’s reputation depends on how stakeholders
perceive the different aspects of its performance and behaviour.”

61. LINKING CSR TO BRANDING
AND REPUTATION
• It’s especially interesting how stakeholders see companies in
situations of crisis and if a solid CSR performance can make a
difference then.
• Some studies provide evidence for the idea that CSR can act as
insurance by protecting reputation in the face of adverse events. In
a way, CSR helps companies to become more resilient not just to
climate change risks, but also to negative information about the
company.

62. THANK YOU