United Arab Emirates Pushes Private Sector to Embrace Corporate Responsibility

The government of the United Arab Emirates wants companies conducting business within the country to do more on the corporate social responsibility (CSR) front.

To that end, the UAE’s Ministry of Economy recently held an event in Dubai to launch a “Corporate Social Responsibility Index” in order to boost such initiatives across this nation of 9.2 million people. The timing is prescient, considering Ramadan is underway; this month for many Muslims is a time for reflection, and companies are amongst the institutions that remind residents to “do good” during this month.

This program is part of the UAE’s “Year of Giving,” which aims to boost volunteerism, engage business to work closely with local communities and even inspire environmental cleanup. And on the social responsibility front, this program includes 11 various initiatives, from the development of rankings to measure local companies’ performance, to a responsible procurement program and the requirement that companies disclose their social responsibility work in an annual report.

Whether companies will be eager to participate is an open question. The Ministry of Economy says on one hand, the implementation of any CSR programs is voluntary. But if companies operating in the UAE do launch such programs, the government will require that they be disclosed.

In fairness, part of the work culture in the UAE is to garner nominations and awards, so that could inspire businesses to launch such programs in order to enhance their brand reputation and stand out in the marketplace. Awards for everything from sustainable procurement to green building have sparked a cottage CSR award industry in the UAE and surrounding Gulf states. According to one local English-language newspaper, the results from companies that participate in this program will be announced in April 2018.

On the other hand, the expatriate lifestyle of most foreign workers in the UAE is one of long hours, so scoring the buy-in of these employees will be quite the challenge. Furthermore, the three-year-long slump in oil price has forced emirates, including Abu Dhabi, to tighten their budgets, which means less procurement, and therefore less revenues, for privately-held companies. Employees who may have had latent interest in making their company a force for good are now more focused on making sure they can keep their jobs. The same expatriates who flocked to the UAE during the boom of the 2000s, adding much talent to the country's human capital, are now leaving in droves, according to several publications such as Financial Times.

The same goes for state-owned companies, at which most UAE nationals work; these firms, many of which manage the country’s energy sector, also largely rely on the labor of foreign nationals. While the UAE’s oil and gas industry has felt most of the recent economic pain, there has been a trickle-down effect across all industries in Dubai and Abu Dhabi, as these companies generate most of the country’s job opportunities.

Despite the UAE’s recent economic struggles, there are plenty of opportunities for both local and expatriate employees to launch programs in order to contribute to environmental and social responsibility efforts across the country. Dubai’s chamber of commerce, for example, has long operated a program that encourages companies to launch programs on this front. And in Abu Dhabi, the economic machine of the UAE, foundations including the Abu Dhabi Fund for Development have launched volunteer programs in order to engage company employees across all sectors. Some companies, including National Bank of Abu Dhabi (NBAD), have a long history of conducting CSR programs – along with issuing sustainability reports that candidly discuss their various programs’ results.

To the UAE’s credit, the country’s leadership has long been focused on diversifying its economy so that it is not reliant on the volatile oil and gas industry. The results have included Masdar, Abu Dhabi’s renewable energy company that has also launched a clean technology hub near the city’s international airport. And a 90 minute drive away, investment zones such as Dubai Internet City and Dubai Silicon Oasis provide a home to regional headquarters for some of the world’s most recognized multinationals. Employees at such business centers have the ability to tap into their global networks and share ideas on how to make the UAE an even richer experience – and improve the country’s current environmental and social performance, both of which have exposed the Emirates to outside criticism in the past.

Image credit: Leon Kaye