Many enterprises still don’t understand that strategic CSR (we prefer the term ‘sustainability’) can have significant business value. Companies worldwide, and in the region, are leveraging sustainable business practices for competitive advantage: from Fortune 500s like GE that have generated billions in revenue, to regional companies like Aramex, who in 2015 reached 53,000+ direct beneficiaries through their sustainability programs, and supported 2,132 startups and entrepreneurs.
An analysis of S&P 500 companies found that corporations with sustainability strategies outperform others on the index, and corporations that are actively managing and planning for climate change secure an 18% higher return on investment than companies that aren’t.
Even renowned business strategy and economic competitiveness guru, Prof. Michael Porter of Harvard Business School, co-created a management framework called ‘Shared Value’ to identify how organizations can drive profits through serving societal or environmental needs.
Since 2012, the world has evolved considerably when it comes to the field of sustainability. Last year was a landmark year for sustainable development with the introduction of the UN Sustainable Development Goals, a UN Climate Change Treaty, and the shift in oil markets.
However, as long as sustainable business is viewed as something that is cosmetic, and marketing-donations-sponsorship oriented, it will be considered a non-value adding activity and a low priority for companies still trying to navigate a challenging economy. Similarly, if the sustainability of a business is viewed purely from a financial perspective with disregard for social and environmental implications, this approach will prevent long-term success and sustainability as well.
So what does ‘sustainable business’ mean? On the most basic level, it is a business that manages its risks and opportunities in 4 main business quadrants:
1. Workplace: examples include employee wellbeing and safety, talent retention, diversity and inclusion.
2. Marketplace: examples include supply chain and consumer safety such as sourcing ethically (no sweat shops, fair trade, non-GMO food etc.).
3. Society: examples include philanthropy and volunteering but also community engagement to understand needs and concerns i.e. making decisions that will affect local communities with input from local communities.
4. Environment: examples include reducing energy and water consumption, waste management, and protecting biodiversity.
From a big picture perspective, sustainability doesn’t mean that we should sacrifice or have less. It is about reorganizing and redesigning our societies, governments and built environment so that we can operate on a mode of innovative abundance rather than scarcity.
For example, even prior to decreased subsidies in the Gulf, energy audits have been growing in popularity for large and industrial businesses. In 2011, Dubai Airport’s energy and fuel saving initiatives reduced CO2 emissions by 72,793 tons and achieved $4.33 million in fuel savings.
An important realization for Bahraini companies is that they will be rewarded by their sustainable business practices through increased innovation, profits and more prosperous communities of consumers.
It goes far beyond CSR initiatives; the very purpose of companies should be to enrich human lives, economies and communities, in a way that does not cause ecological offense or disadvantage. If your organization is not doing so – then you should firstly question why you are in business, and also realize that eventually others who take such an approach will disrupt your industry.
Some businesses have even transformed challenges we are facing in the region to reimagine the Middle East—rather than allowing these challenges to threaten business. For example, Karm Solar created a solar energy-based water pumping system—that is cheaper than those that use diesel—to ensure the sustainability of domestic agriculture in Egypt. Moroccan impact-driven business, Looly’s, produces ethical and unprocessed couscous, while creating jobs and empowering marginalized women, men and local communities.
And finally, the ‘you can’t manage what you don’t measure’ adage is true for sustainability too. Over 9000 companies report using the Global Reporting Initiative (GRI), which is an audit of an organization’s social, environmental and economic performance referencing over 90 indicators. GPIC was the first company in Bahrain to produce a GRI report.
The UN Global Compact—another framework for responsible business—has over 12,000 signatories, including the inaugural Bahrain Award for Entrepreneurship Sustainable Business winner, BMMI.
In fact, in 2014 the European Commission adopted a game-changing proposal requiring all large companies to disclose information on the major economic, environmental, and social impacts of their business as part of their annual reporting cycle. Bahraini companies doing business with international markets will increasingly find that weak or non-existent sustainable business practices will become a distinct disadvantage. It’s only a matter of time before CSR and sustainability become as mainstream and essential to companies as marketing and communications.
The question is, which Bahraini companies will ride the sustainability wave early and leapfrog competitors, and which companies will fall behind and risk becoming fossils.
Leena is a cross-pollinator of ideas with more than 15 years of multi-disciplinary experience and cross-functional roles in social innovation, public affairs, communications, and event management in the GCC and New York. She was the first consulting affiliate in the Arab world of the Porter-Kramer ’Shared Value’ Initiative, and also serves as the Global Reporting Initiative’s (GRI) Quality Control Consultant for Sustainability Reporting Training Partners in the MENA region.
A ‘Wall Street Journal Woman of Note’ and listed among Business in Gulf’s most influential Bahraini women, Leena’s expertise on topics ranging from social entrepreneurship, sustainable development, peace-building, and youth empowerment, has been sought by the United Nations and other regional and international organisations.
Leena is a Board of Trustees Member for the Bahrain Foundation for Dialogue, and is on the Advisory Board of Geneva-based NGO, Causedirect. She previously served on the Advisory Board of HRH Prince El Hassan bin Talal of Jordan’s WANA Forum, which identifies solutions to the region’s social and environmental issues. She also previously served as a Ford Environmental Conservation Awards Judge and an MIT Arab Enterprise Forum mentor.
Leena holds an M.A. in Globalization Studies from Dartmouth College where she studied as a Fulbright scholar, a B.Sc. in Culture and Communications from New York University, and has studied at Harvard Business School and at the THNK School for Creative Leadership. She is a biomimicry youth educator, an Advanced PADI scuba diver, and a life-long student of Bodhisattva peace and compassion.
3BL Associates is a people + planet strategy consultancy. We use sustainable development challenges—ranging from climate change, unemployment, health, and education—as opportunities to create economic, social and environmental wealth for countries, companies, communities and the Earth. In 2014 3BL became the first consulting affiliate in the MENA region of Prof. Michael Porter’s Shared Value Initiative.
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