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Lebanon goes through growing pains of CSR

File - The fourth conference held by CSR Lebanon in December.

BEIRUT: When Dwayne Baraka stood at the immigration counter at Beirut’s airport last December, he noticed something very different from his previous trips. When he said he was a CSR consultant, the immigration officer asked if he was speaking at one of the conferences, Baraka recalled. “The young fellow, probably in his 20s, voiced really strong opinions about CSR and Lebanon’s lack of engagement with it. He said this was one of the factors why he wanted to find a job outside of Lebanon after he’d finished his studies.”

The officer’s understanding of corporate social responsibility (CSR) – a practice that has largely been the domain of highly developed, industrialized countries since its modern conception in the 1950s – was a pleasant surprise for the London-based founder of consultancy, ValueCSR, who regularly visits Lebanon to speak at conferences and lead training workshops.

Baraka was further impressed at the conference he went on to attend, the fourth held by homegrown consultancy CSR Lebanon. Compared to his first visit to Lebanon for the organization’s December 2011 conference, he found “there was much more open engagement – how do I make this work in Lebanon, versus my first trip when people were really trying to understand what CSR is.”

“CSR is definitely young in Lebanon, but it has made rapid progress. It was great to share the stage with many Lebanese front-runners – us ‘foreign’ experts are now in the minority,” he added.

Held under the patronage of the Central Bank governor, the December conference included nearly 600 attendees from around the world, including senior figures from the local government and the European Union, banks, chambers of commerce, NGOs and universities.

But while awareness of CSR has improved, “it has not at all become a trend, it’s still in its infancy,” said Khaled Kassar, who founded CSR Lebanon in November 2009. “Most companies think they are doing CSR but they are doing philanthropy.”

Corporate social responsibility involves a business going beyond its fundamental profit-making motive to comprehensively and sustainably address social, ethical and environmental considerations in its workplace and the communities it affects. In essence, a business must adhere to a “triple bottom line,” accounting for its social, environmental and financial performance (considerations also known as “people, planet, profit.”)

Kassar views companies’ efforts in Lebanon as mostly one-off, piecemeal initiatives, rather than part of a long-term strategy related to and integrated into a company’s core operations. He added that there was a lot of CSR-washing instead, which refers to a company’s public relations efforts made under the guise of CSR.

“To consider a company doing CSR properly, I have three conditions,” Kassar said. “Announce a strategy for the coming five or 10 years, implement the strategy, and publish a yearly report using a strong reporting framework. We need to look at real, measurable impact in the long term.”

While CSR Lebanon has established itself as a leading authority on the topic and is the only consultancy of its kind in Lebanon, its clients remain located in the Gulf – Dubai, Qatar, Saudi Arabia. At most, its clients may have some business projects in Lebanon.

“Businesses still don’t see the value of such an investment,” Kassar lamented, adding that companies often lack the budget for his strategy development fees, which range from $60,000-$100,000 per project.

Moreover, businesses in Lebanon tend to think short-term rather than investing in a multiyear strategy.

“You can never forget that we are in Lebanon. Businesses say, ‘How can we invest this amount of money in CSR? We’re in Lebanon, we don’t have a president, we have Israel, Syria, assassinations and car bombings.’ What we are trying to convince them is that CSR is not a luxury, it’s something essential to your business. If you are good with your employees, good with the environment, good with your surrounding community, this is good for your company, even if the situation in Lebanon is bad.”

To get things going, Kassar is targeting sectors with more money, such as banking and construction. He noted that CSR efforts must be related to the business’ core products or services.

“Sales of new cars grow every year in Lebanon, but why have I never seen a car manufacturer have a small initiative in CSR?” he asked, noting that hundreds more people are killed in road traffic accidents each year than in bombings.

Some banks have begun to take small steps. The Central Bank issued a circular last year calling for banks to help finance startups. Bank Audi and Fransabank began issuing yearly CSR reports a few years ago, separate from their annual report. Kassar gave BLOM Bank a recognition award during his December conference for its popular retail credit card program, developed in collaboration with the Lebanese Army, whereby half of the annual fee and a percentage of every $100 spent is donated to the Lebanese Mine Action Center.

“That’s an amazing thing,” Baraka said of the BLOM program. “I’ve never seen an organization working toward removing land mines – it’s not a unique Lebanese phenomenon, but a very big social problem for Lebanon.” He noted it as an example of what he sees as “a uniquely Lebanese version of CSR emerging.”

Compared to Western practices, CSR in the Lebanese cultural context involves the targeting of different social and environmental issues and an intellectual starting point in philanthropy and charity, he said. “The business culture in Lebanon has always been charitable, so if you look at philanthropy through a CSR lens, it’s how can we be most effective with the resources we’re giving back to the community?

“Philanthropy ought not to be a dirty word when it comes to CSR,” he said, describing the initiatives he has seen in Lebanon as philanthropy with CSR influence or the elevation of charitable donations (with little consideration beyond PR value) to community investment. At the same time, he acknowledged there was a problem of business leaders equating CSR and philanthropy.

Baraka also noted that SMEs usually take a different approach to CSR than big businesses, which necessarily affects CSR efforts in Lebanon given its predominance of small and medium enterprises. For example, while annual CSR reports of some multinational corporations exceed 200 pages, small businesses do not have the similar need or resources.

He championed the idea of developing a “Lebanon CSR Index” to measure and report performance, rather than using well-established international standards such as the ISO 26000 or Global Reporting Initiative (GRI). While some metrics would be universally applicable, he suggested that SMEs may need to report on 15-20 indicators, compared to the more than 100 required by the GRI. “Understanding which are most important for Lebanon is something that really only Lebanese companies, civil society and NGOs can determine,” he added.

Baraka was also impressed by how quickly social enterprises have sprung up, referring to businesses that maximize their social and environmental impact over financial performance and reinvests their profits into furthering their social mission. “It took the U.K. 15 years before CSR started to show itself in this idea of social entrepreneurship.”

Aside from leading efforts to develop a local index, Kassar has been appointed the point person by the United Nations Global Compact, a worldwide initiative to promote CSR, to develop a network on the ground. He is also collaborating with MP Ghassan Moukheiber to draft a law to provide tax incentives for CSR initiatives, as well as with other MPs to draft a social enterprise law.

Dr. Josiane Fahed-Sreih, associate professor of management at LAU, echoed the need for such government intervention. “If you want to increase CSR, companies should have an incentive. The problem comes when CSR is a cost burden to the organization. If it intervenes, the government should lower taxes or not take taxes.”

While Lebanon seems on the right track, Baraka noted that leading multinational companies that have long been committed to CSR still have a long way to go. “Marks & Spencer, which many would say is a world leader on CSR, talk about being perhaps a little more than 10 percent of the way to being fully ‘sustainable.’” Still, he is optimistic about CSR eventually reaching critical mass in Lebanon.

Baraka also praised Kassar and his team for helping Lebanon “leapfrog over the earlier years of CSR and the mistakes countries like the U.K. and U.S. have made.” Such an organization was critical to introducing CSR, especially in the absence of a clear government agenda, he noted.

Both emphasized the need for multi-stakeholder engagement to move forward, involving not only corporations, but also the government, NGOs, academia, news media and ordinary citizens.

Kassar admitted it was a “very hard mission because of Lebanon’s situation,” but said he was optimistic.

“I think the corporate sector is now feeling the pressure of the community,” he added. “Now they can’t skip [CSR] easily, but it will take time.”

 
A version of this article appeared in the print edition of The Daily Star on April 09, 2015, on page 5.

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