I was there with Oliver Dudok van Heel (of Radley Yeldar) to tell companies how we think they can report on their CSR activity and strategy in a way that adds value to business and stakeholders. The GRI (G3.1) is becoming very popular in the region, but we weren’t convinced that the G3.1 is the right next step for CSR in Lebanon.
We sought to encourage a focus on discovering materiality of particular CSR issues in order to create a relevant and compelling CSR report. Coincidentally, and not in any way directly due to us, many of the changes for the GRI draft G4 align much more with our training than the G3. We, along with many others, are convinced that identifying the most material issues for any given company will lead to exponentially better results for the company (especially the finance division) along with stakeholders and the investment community.
CSR Grows in Lebanon
It is interesting to see the increased level of CSR-aware companies in the region, even since my last visit late in 2011. Opinions of participants in the seminar were steadier and more confident. Open question times had many more nuances and insights than on previous occasions. And there was a real fervour for making CSR happen, as opposed to polite enquiries about what it was (or derisory remarks about CSR!).
No doubt this is due in part to the efforts of my hosts, who publish one of the best magazines on CSR (Responsible Business) that is available, not just in the Middle East, but anywhere! It’s blend of international and local foci (focuses?) strikes a very important balance between inspiration and pragmatic grounding in their local context. That balance means that a uniquely flavoured version of CSR will emerge from Lebanon.
Lebanon already has one of the most robust banking sectors anywhere in the world, due in no small part to the prudence and pro-active legislative approach of Riad Salameh, Governor of their central bank, which in the mid 00’s fervently advocated for laws against banks in Lebanon being able to deal in derivatives and sub-prime products. It might surprise a few to learn that he cut his teeth at Merrill Lynch, one of the companies most affected by the 2008 crisis and deeply en-mired in sub-prime write downs (BTW – best layman’s explanation of the sub-prime problem from one of my favorite podcasts, This American Life). On reflection, prehaps that’s not surprising at all.
Of course I’m not saying that the Banque du Liban is perfect (others are very critical of their banking policies in relation to transfers from other countries in the region), but I think it’s clear they got this aspect of banking right, certainly in a way that would have had an effect on the Western Financial Crisis of 2008 had similar policies been adopted by the governments of the USA and the UK.
That means that bankers still hold their heads high in Lebanese social circles – a concept that’s hard to imagine from this side of the Crisis. That level of understanding of the place of banks to mitigate social risks should be an excellent platform on which to build a CSR culture.
Towards a National Strategy
The above heading is the tagline of CSR Lebanon. I like it for several reasons. The tagline suggest a journey that is ongoing, an iterative path that continues to evolve. It also suggests a striving for something beyond ‘business as usual’. I think most importantly it expresses a bold ambition by a relatively small number of CSR professionals/believers.
The people I have met in my time in Lebanon are fiercely proud of their country and their culture. That’s no real surprise I guess – most of us subscribe to at least some degree of national pride. But they are also sober in their judgment of their country’s strengths and weaknesses. In particular, they understand that business has a very important role to play when it comes to social stability and strong communities especially within a Lebanese context. They also know that the sum of things business is doing isn’t enough to make Lebanon the kind of place they want it to be. They didn’t seem to notice the power outages that happened about four times in any given day, they merely get on with things and expected us to do the same. I could learn a lot from that kind of pragmatism.
With their famous middle eastern hospitality and generosity, it’s no surprise that business leaders or entrepreneurs have traditionally been very generous in giving to charity and supporting remedies for social problems. Which means that CSR in many cases is being led by a philanthropic approach. There are also increasing numbers of regional offices of multinational companies that are being asked by head office (usually in France, UK or USA) to implement CSR policies or programmes. Those two forces are a blessing, but can also be a curse to the goal of a National Strategy.
Philanthropy can too easily be a way to move the dialogue toward the good that companies can do from post-operations profit. Companies that are really interested in getting the full potential from CSR are assessing the impacts of the way they make profit in the first place, and choosing a path that has greater impact than such a donation. And some of the local banks in the region are resting too heavily on the good work of the central Bank and on their philanthropic activity. Now don’t misunderstand me, there are some fantastic programmes happening, and I don’t see any reason why they should be shut down, but doing philanthropy and calling it CSR is a very dangerous practice in an era of relatively sophisticated understanding of the role of companies in society.
Which is why we grounded the training in identifying material CSR issues for business. Understanding the impact a business is having through its operations has already been recognised by M&S (BITC’s 2012 Company of the Year), Puma and InterfaceFlor (see video below). CSR pundits (and serious business people) are much more likely to ask “How did you make money?“, than to ask “To whom will you give charity?“.
Implementing policies of multinational HQs can drive change within business, but it also can be a dangerous path. Lebanon is different to just about any other place that I’ve been to. Its challenges are a unique combination of factors that, while individually present in other countries, are only present in toto in Lebanon. The issues that a branch office in downtown Beirut face aren’t the same as those faced by HQ in Chicago. And CSR programmes may need to be modified as a result in order to achieve the outcomes that HQ desires. That again involves an understanding of the most critical issues that the Lebanese division of the business faces.
CSR Lebanon has already identified the issues of CSR as philanthropy and CSR as de-contextualised policy, and is working with many local companies to help them bring about effective CSR plans within Lebanese organisations (including many banks) and working with global businesses such as Holcim to implement international ideals in a way that makes sense locally. That’s not a unique approach, and the right one, but if Lebanon is to achieve CSR as a National Strategy, more is needed.
National Strategy needs centralised action
CSR isn’t mainstream in Lebanon yet. What is needed to advance the cause is a posse of business leaders who are able and willing to speak out about the virtues of CSR and how embracing CSR has helped their business to function better and be more profitable. Once a few leaders start doing that, Lebanese business can create a race to outdo each other on CSR. Within such a virtuous circle, CSR can thrive and begin to change corporate performance and behaviour of individuals within companies.
Such a virtuous circle can inspire change and motivate other businesses to investigate how CSR can help the bottom line and the creation of stronger societies.
It is my hope that the central bank can continue to take a leadership role on CSR. The Banque du Liban has already done much to support and keep strong the banking sector of Lebanon. It now has an opportunity to support the wider business community through encouraging CSR action and reminding companies that CSR strengthens corporate performance.
In my more honest moments, I honestly don’t understand how Lebanon manages to hold itself together (I am an outsider after all), or how business gets things done in an environment that is replete with challenges that I don’t fully grasp. There are always challenges that would cause some businesses to shut shop and go home, and there seems to be a good degree of chaos at any given time. Traffic is a complete nightmare. And yet, I find myself looking forward to the next journey.
Not just because of the fine food and sunshine … also because of the steps toward a National Strategy that I hope and fully expect to see.