SME and CSR in GCC and role of Strategic Sustainability. Companies in GCC more and more seem to appreciate their engagement and participation in the promotion of responsible business practices that transcend mere philanthropy. Best practice recognises the need to contribute to employees, the community, and the environment. Current practices in GCC demonstrate the progress of philanthropic activities towards comprehensive CSR strategies.
The research has shown that government incentives and initiatives to promote social and environmental performance are welcomed, but that more is needed to motivate companies to align their CSR strategies with the national strategies (that is, emphasis placed on cultural traditions and on promoting the general perception among companies and in the community that social responsibility and welfare are key government activities).
For example, in Saudi Arabia, the majority of companies are SMEs, which means that they may need further support and expert advice to encourage them to incorporate CSR into their business planning; they may also face challenges in creating new jobs with focus on Green and CSR. However, successful Saudi corporations that make use of good CSR practice and the government can engage with SMEs to support the implementation of CSR from the very early stages and consequently enhance National CSR performance. Localy, best practices and activities run by the SAGIA (e.g. the holding of “Responsible Competitiveness Leadership Dialogues” with local and international participants in order to discuss the future of CSR in the Kingdom, and exchange experience in regard to best practices) demonstrate that there is an understanding of CSR that goes beyond philanthropy, but that this needs further support from the government in order for CSR to become part of the way that companies do business.
SME and CSR in Saudi, Case in point Nomou in the MENA Region
Nomou is an initiative co-founded by Shell Foundation and GroFin to address economic issues in the Middle East North Africa region. Nomou’s objectives are:
• to create more than 15,000 sustainable jobs through supporting around 600 SMEs in the region;
• to diversify the economy through the development of local companies by linking them to large company supply chains. For this purpose, they use contributions of USD 33 million from Shell Foundation; and
• to adopt the GroFin SME Development model of structured finance and tailored business support. It has launched pilots in five countries: Oman, Saudi Arabia, Iraq, Jordan, and Egypt.
Nomou offers the following services:
Business support to SMEs at both pre- and post-investment stages
• pre-investment stage: business and management planning – feasibility studies, business viability and risk management, team assessment, financial modelling, budgets and structuring, and support of accounting system implementation; and
• post-investment stage: business growth – post-investment programme with a focus on financial management, marketing and sales support and gaining access to market, operational management, strategic planning, business counselling, and environmental governance issues.
• Business support is delivered by the in-country investment and business support teams through a structured process that is integrated with the overall process.