Saudi firms ‘on right track’March 2009
The responsible business performance of most Saudi Arabian companies is ‘intermediate to good’, according to the country’s first comprehensive CSR assessment.
In the debut Saudi Responsible Competitiveness Index, most of the 40 participating companies scored between two and three points out of a possible five, indicating they were neither bad nor especially good.
Only a few scored above three, which, according to the compilers, suggested they were approaching the ‘good to excellent’ mark. A similarly small number scored less than two, showing they had not seriously begun to tackle CSR.
The UK’s AccountAbility think tank and the Saudi-based consultancy Tamkeen, who jointly carried out the study, say the results suggest that, unlike in many countries, corporate responsibility in Saudi Arabia is not the preserve of a few high-profile ‘usual suspects’ – and that examples of good practice are ‘spread across a broad swathe of businesses’.
There were therefore no especially weak areas, as companies performed fairly uniformly, if unremarkably, on issues such as stakeholder engagement, climate change, supply chain management and philanthropy. Ratings for individual companies – which participated in the survey voluntarily – will not be published, but every business will be offered private feedback on its performance.
The index marks the start of a three-year government-backed project promoting corporate responsibility in Saudi Arabia (EP9, issue 11, p3). The results show many best-performing companies were conglomerates or those in the industrial and information technology sectors. Construction companies scored below average, performing less well on CSR management systems and building up stakeholder engagement.
In general, publicly listed companies performed more strongly, although the gap between them and privately held businesses was smaller than in many other countries where similar indexes have been created.
AccountAbility said many Saudi businesses were making progress on CSR communications strategies, with some ‘once-shy’ family-owned companies now reporting publicly on social and environmental performance and educating consumers and clients about their green and social credentials.
Examples of local best practice highlighted by the study are the Middle East Paper Company’s work on paper recycling and waste water use, and the recently introduced suppliers’ development programme of the electrical systems company Alfanar, which focuses on using local contractors.
However, the study said more companies could provide much better work opportunities for women. Management of risk in the supply chain too needs more attention as Saudi Arabia begins to shed its ‘relative insulation’ from supply chain pressures faced by other global exporters such as Asian manufacturers.
Participating companies were assessed for their performance in 28 areas, based on interviews with senior managers and chief executives. Just under half were in three categories – IT and electronics, finance and insurance, and industrial. The goal is to increase company engagement from 40 to 100.
Already a member? click here to login