In 2015, we presented a Sustainability Road Map for the Middle East. Some of the most discussed topics included the increased exposure to young people being educated on topics related to sustainability, how governance and sustainability can be integrated, the negative correlation between sustainability regulation and innovation, that confusion between sustainability frameworks and standards is normal, and solutions to struggles can often be as simple as finding a good partner.
Since the release of our initial roadmap, GRI G4 guidelines are now the only reporting format, Integrated Reporting is picking up in the region, the UN has released an update of the 1990 Millennium Development Goals (SDG’s), for the first time in history we came to a global climate change agreement, and Social Impact Measurement is becoming part of many companies strategies in the region.
So for 2016 we have asked Sustainable Square’s staff, hailing from diverse backgrounds including UAE, Bahraini and Omani nationals, Arab, Western, and Asian Expats to weigh in on what will make a strong corporate roadmap for 2016 and beyond. We have compiled these insights into our 2016 Sustainability Roadmap keeping in view the changing dynamics of the Middle East region.
Sustainability trends, as informative as they may be, can often be overwhelming when integrated within a company’s complex strategy and operations. We realize the need for adoptable, structured approaches to develop practices that set businesses apart. These are what make the difference between ideas that are discussed and those that are implemented.
We propose businesses in the region to inculcate a “Balanced Scorecard” model to prepare a robust sustainability roadmap. Let us have a look at what makes this structure work better for businesses by demonstrating what is required.
Accountability, Governance and Ethics
- Businesses learned that they are not only accountable to their boards and shareholders but to the expanded portfolio of internal and external stakeholders.
- Ethical business practices do more than just create goodwill for a company. It develops a value by association for employees, suppliers, investors and shareholders to know that their interests will be protected and decisions will not be based solely on profit potential.
- New Governance models have to take into consideration balancing profit with sustainability interest and build systems and mechanism to support the internal deployment of sustainable practices
- Cyber Security is fast becoming a critical issue on board agendas today.
- Long-term and seemingly distant risks are now worth prioritizing as companies look to plan to offset the long-term costs of alignment with UN’s Sustainable Development Goals, Local Visions for development, and loss of brand value due to niche public perspective.
Learning and Awareness
- Sustainability has always been driven by a specific department and rarely promoted and taking forward by the whole organization. Companies will now focus on how employees can drive the long-term sustainability agenda of the business and Integrate it as part of their performance indicators
- CSR and Sustainability managers will now engage with training departments to identify the needed sustainability skills and knowledge per unit. i.e. Sustainable and Ethical Sourcing procurement and Supply Chain, Cause-marketing for marketing, employees engagement and volunteering for HR, Carbon Management for Manufacturing, Operation
- Companies will start looking at compliance beyond governments’ regulations. Brands are recognised as pioneers in their field only when they set themselves up against high international standards that might not be asked-of from local regulatory standpoint.
- Alignment with COP 21 accord will guide companies align their programs with the national mission and agenda stated through these accords.
- Internal mechanisms and processes will take into consideration integration of ESG factors and indicators.
- Companies will start investing into technology solutions to solve social issues. We have seen initiatives by leading brands adopting technology to raise awareness as well as develop aiding tools to respond to social issues.
- Businesses will redefine their approach to CSR and contribution to a more strategic social investment with clear indicators and expected ROI.
- Businesses will start sustainably investing beyond their in-house operation – a value chain consideration as part of their sustainability strategy to strengthen their upstream and downstream supply.
- Businesses started realizing that in order to make a difference to their long term strategy they have to join hands with peers and competitors. In 2015 we have seen few initiatives of businesses partnering on launching community programs. Arabia CSR Network launched Sharaka which is an initiative to form coalitions between companies in the Arab world
- Exploring new channels to reach out to stakeholders through Twitter, Snapchat, Facebook, etc. with a view to build brand value and strengthen feedback mechanisms across age groups.
- Businesses will strengthen their engagement with large group of stakeholders to mitigate social and environmental risks and take on potential opportunities to drive a sustainable and inclusive business
Transparency and Disclosures
- Businesses have begun moving away from the conventional reporting practices on social programs and started focusing on measuring the impact and value created from their community initiatives while sharing clear indicators of change and monetising the value creation. Such transparency will help in better understanding the values the business stands for.
- Investors, boards and top managements will now consider Sustainability data and outcomes of reporting as a source to decision making
- Sustainability Benchmarking helps in placing the efforts of the business against peers within the similar industry. Over the long haul, this will help in building consensus among industry players to choose the best route forward.
- These days most management teams acknowledge the importance of collecting and reporting nonfinancial data, but companies vary in how they deploy this information as a tool for strategic growth.