How can businesses operating in Egypt ensure their CSR activities achieve sustainable development?

Photo: UNDP Egypt

With poverty rates having reached over 30% this year according to the Egyptian government’s statistics, the importance of both local and international businesses fulfilling their corporate social responsibilities (CSR) has become ever more urgent.

However, CSR activities can manifest in a number of forms. They can exclusively be philanthropic and charitable in nature, merely providing temporary alleviation of the chronic issues those living in poverty and marginalization face. They can also be narrow in their focus of just providing a better financial and material position for those they target, yet completely miss taking the social and environmental impacts into account.

Society and environment were important aspects of the United Nation’s Millennium Development Goals (2000-2015) and remain crucial components of the organization’s Sustainable Development Goals (SDGs; 2015-2030) agenda, which stipulates that CSR activities should conform to these requirements.

Amani Gamal Eldin of Al-Ahram Hebdo and Khaled Abdelhalim of AUC’s Department of Public Policy and Administration explored examples of CSR activities in Egypt and how much they were in line with the SDGs in their recently published research paper “Can CSR help achieve sustainable development? Applying a new assessment model to CSR cases from Egypt.”

According to the paper, “discourses on corporate social responsibility (CSR) have globally gained priority in theory and practice due to the advent of globalization and international trade movement,” making specific references to the “expansion in scale and power” of transnational corporations (TNCs) whose “extensive physical outreach has exceeded that of governments in most cases.”

Thanks to these changes in recent times, “discourses of CSR have emerged with relevance to ‘context specificity,’ especially in the Global South,” necessitating the example of Egypt requiring focused study.

CSR activities have become more important in the Global South due to the shortcomings of governments in this region in providing social protections and services, according to the paper. “In a country like Egypt, despite numerous efforts led by the government to improve the living standards of the population, the service delivery system is still inefficient, and poverty remains multidimensional because the population is very susceptible to social and environmental risks,” paving the way for the private sector to pursue more and more CSR activities, especially since the country’s economy was liberalizing and opening up more to foreign investment during Mubarak’s presidency.

Abdelhalim and Gamal Eldin assessed the CSR activities of two unnamed companies operating in Egypt to illustrate current, ineffective practices and how CSR could be done better with a sustainable development model appropriate to the country’s context. One case study was a decades-old family owned business with a worldwide presence and reputation, and the other a telecommunications multinational corporation (MNC).

A prominent member of Egypt’s private sector, the unnamed family owned business has a “long-standing charity-giving history”, and its brand name has become strongly associated with philanthropy, boasting a “development foundation carrying the family business name.”

This business’s CSR activities (which the paper criticized as lacking in well-articulated strategies) focused on health, education, and capacity building specifically for youth and women. The shortcomings included inconsistency in its education campaign and a lack of structure in its youth programs. “Its portfolio in education is incoherent. For example, sometimes they engage in projects such as illiteracy campaigning, which terminate abruptly without providing proper cause. Other projects have no specific outline such as the one implemented with an INGO on youth empowerment.” The paper also cited an additional problem which was an absence of information on the results of these initiatives because the foundation was “not publishing impact reports.”

The company’s CSR model was also suffering due to institutional inconsistencies, staff shortages, and management problems. “The institutionalization of the CSR process…does not happen because of the in-comprehensive institutional and knowledge management framework, the reduced number of personnel and the lack of consistent capacity building.”

Funding was also an issue as the paper claimed the foundation’s budget was drawn from a percentage of the business’s profit, making the foundation susceptible to the financial performance of the family business. There wasn’t a sustainable and reliable funding model to guarantee the foundation’s activities were sufficiently financed.

Abdelhamid and Gamal Eldin proposed three recommendations for the issues this particular company faced. One was conducting a “proper stakeholder analysis as base for developing a solid partnership model including the main players in the development field, governmental and non-governmental.”

Another was conducting both qualitative and quantitative research on the impacts of the foundation’s CSR activities so it can assess the effectiveness and positive and negative outcomes. The foundation can then form evidence-based interventions.

Finally, the business should adopt CSR principles within the “core of its strategy, operations and corporate culture” so as to achieve consistency throughout the whole organization which would only strengthen the foundation.

The paper’s second case study, a telecommunications MNC operating in Egypt, was on the other hand a more positive example and recognized globally for its “strong social investment portfolio” and the “developmental footprint and the social change delivered by it.”

The MNC’s CSR approach focused on sustainable business and reducing their negative impact on the environment and the local community and economy. It went so far that “the term CSR was substituted with sustainable business to be embedded into their global and local strategy.”

What is noteworthy about the MNC’s CSR model is that it does not include any philanthropic activities. It not only focuses on providing education to people with disabilities but finding solutions to the issues they face, such as employment. It does this through three initiatives. These include teaching public university graduates key skills to help them become more employable; in partnership with two Egyptian NGOs, providing entrepreneurship opportunities; and training specifically reserved for people with disabilities.

Most importantly of all, the MNC conducted extensive field research and assessments, along with market analysis and market research, before designing and beginning any CSR initiative. To ensure the outcomes deliver on sustainable development goals, the results of their interventions had to be measured for their social, economic, and environmental impacts.

What Abdelhamid and Gamal Eldin proposed that companies should do to ensure their CSR activities effectively achieve sustainable development was for them not to measure their success in financial terms alone. Businesses’ measurements of their performance should include social and environment impacts and consider them in the same light as financial performance. Such an approach to self-assessment would have a positive spill over effect on a business’s CSR strategy.

Additionally, the central purpose and intended outcome of a CSR initiative should be achieving sustainable development goals in a manner most suited to the local context. However, what is most crucial is that the effects of CSR activities are measured, analysed, and assessed both quantitively and qualitatively to ensure that they can be constantly modified and improved to produce the best results.

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