Introduction
Modern businesses have broadened their corporate goals and objectives as they seek to integrate most of the issues affecting modern society. For example, companies make hefty investments in such causes as environmental and social problems. These initiatives can be captured within the broad concepts of corporate social responsibility (CSR) and sustainable development, both of which require firms to engage in practices beyond their financial goals and incentives. The modern consumer has become enlightened, which means that customers are aware of the detriments of certain business activities. For instance, many consumers would be opposed to buying meat products from companies that encourage mass deforestation or other environmentally hazardous practices. Kuwait and the rest of the Arab world can be characterized by rapid economic growth fueled by massive natural resources, especially natural gas and oil. The focus of this essay will be to present an understanding of CSD and sustainable development as they apply to Kuwait and the Arab world.
Corporate Social Responsibility
The concept of CSR has become a critical part of the economic and management sciences since the turn of the 21st century. Today, businesses implementing CSR initiatives seek compliance with laws and legislations, and the unwritten and widely accepted rules, considerations, and interests of society. Therefore, the purpose of many modern businesses is no longer exclusively profit maximization. On the contrary, other longer-term objectives, including incorporating social responsibility into daily practices, have been used as a source of competitive advantage (Sanchez-Fernandez & Colombo, 2014). Considering the evolution of the concept of CSR, multiple definitions have emerged depending on the period and the main focus of both practitioners and scholars. However, the basic idea of CSR is that it is used by companies to fulfill their long-term obligations to society. Strategically, CSR can be defined as the obligation emanating from the implicit social contracts between businesses and society (Agudelo et al., 2019). This social contract states that a business should be responsive to the long-run wants and needs of the society by optimizing the positive effects and reducing the negative outcomes of its actions on the community.
Most of the literature on CSR also covers sustainable development since businesses are also expected to ensure that future generations can meet their own needs. However, the conceptual differences mean that the two constructs can be described independently and practices and initiatives associated with each demarcated. However, there is more than one complimentary theme associated with CSR as described by Zhang et al. (2017). For example, corporate social responsiveness was developed in the 1970s to insinuate the capacity of a firm to respond to the pressures of society. the corporate social performance also developed around the 1970s to refer to the range of social responsibilities a company has towards society. regardless of the theme selected, the basic tenet is that corporations are expected to take care of the communities within which they operate. According to Zhang et al. (2017), the idea of business ethics may also be incorporated into CSR. The rationale is that firms implementing CSR would automatically integrate CSR in such aspects as interactions with stakeholders. In many cases, CSR and business ethics are practices by businesses without necessarily being aware of these practices.
The various themes described above confirm the observation that CSR is a multilateral issue. As mentioned earlier, CSR is integrated with sustainability, from which it becomes a concept whereby firms address societal and environmental concerns in their daily business operations. Therefore, many CSR reporting practices often highlight how a company has committed to a certain environmental or social issue. Today, carbon footprint and green energy are among the major catchphrases in environmental debates, which are also captured by CSR reports. However, the implementation of CSR differs across businesses, and the differences could be attributed to the varying degrees of commitment on the part of corporate management. For many firms, a CSR policy is the main document that guides all practices and initiatives (Fasoulis & Kurt, 2019). Therefore, the lack of a CSR policy is considered one of the greatest barriers to the pursuit of social responsibility. As such, one of the greatest enablers of social responsibility is arguably positive attitudes and behaviors manifested through organizational behavior.
The practice of CSR in Kuwait reflects the global context where the governments have played a critical role in ensuring that all businesses comply with the necessary legislation. The commitment to CSR may be a cultural issue where individualistic and collectivist cultures display opposite extremes in terms of commitment levels. Kuwait, as is the case with many eastern cultures, is collectivist, which means that both businesses and the government tend to cooperate on most matters related to economics, politics, environment, and society. Therefore, Kuwait businesses often tend to intentionally promote the image of the country, especially when dealing with foreign governments. The Middle East is largely a perpetual conflict zone, which means that doing business in the region is extremely difficult. The CSR role of businesses, from a political perspective, is to ensure good relations with foreign governments in which they operate to allow citizens and local businesses to conduct trade (White & Alkandari, 2019). Additionally, the private sector cooperates with the public sector in building infrastructure as a means of facilitating economic growth. Therefore, the advances of the Kuwait economy and society are firmly supported by businesses.
The rest of the Arab world may have similar approaches to CSR as Kuwait, especially considering the close ties between the government and corporations. For example, the case of the GCC presented by Jamali and El Safadi (2018) expresses that business has been embedded in religion and that globalization has made locals demand greater accountability and sustainability. Therefore, it can be observed that the efforts to integrate CSR activities are driven by globalization and the realization by society that businesses have a responsibility towards them. Additionally, the GCC is one of the world’s largest oil producers, which makes all the countries responsible for most of the pollution by fossil fuels. Therefore, the Arab world recognizes that they have a responsibility to address the social concerns raised regarding business activities both in the region and across the world. However, issues associated with natural gas and oil can be discussed further under the concept of sustainability. Businesses in Kuwait and across the Arab world engage in many socially beneficial activities often addressing the pressing needs faced by their countries.
The best way to examine CSR activities is to highlight some of the activities reported across Kuwait’s global news and other media. For example, Boursa Kuwait signed the Women’s Empowerment Principles in 2019 to support the global movements and efforts in pursuing gender equality (Al-Bahar, 2022). Women empowerment is a major topic of debate across the world, especially across the Eastern cultures where gender inequality is rampant. Therefore, a company that shows support for women’s empowerment is considered socially responsible, especially when coupled with other such initiatives as increasing the number of female workers. The activities of this company have included raising awareness of the empowerment principles with the hope of creating a lasting impact on the community. If Kuwait achieves gender equality, the citizens and the entire world will recognize that Boursa Kuwait played a critical role.
Another example of a business engaging in CSR in Kuwait is Burgan Bank and its Diraya (Let’s Be Aware) campaign. According to Burgan Bank (2022), the Diraya campaign was initiated by the Central bank of Kuwait and the Kuwait Banking Association in the year 2021. The purpose of the campaign is to educate consumers on their financial rights and the major banking products and services. Additionally, Diraya seeks to protect the public from scams, fraud, and cybercrimes that target consumers by making them aware of these issues. The campaign is not customer service, but a core social responsibility embraced by a company in support of the efforts of both the central bank and the banking association. Lastly, Kuwait Finance House Bahrain has sponsored an AGU campaign focusing on heart disease awareness (Kuwait Finance House Bahrain, 2022). In this case, the company’s efforts fall within its CSR framework. Across the three examples, the Kuwait businesses are seen as having specified CSR frameworks and policies that allow them to pursue issues of pressing concerns for the country.
Sustainable Development
The basic idea behind most business operations is the exploitation and utilization of resources for profits. During industrialization, most manufacturing businesses exploited natural resources in the form of minerals, forests, water, and natural oil and gas. However, many of these resources are non-renewable, which means most could be depleted. According to Sanchez-Fernandez and Colombo (2014), the notion of sustainability emanates partly from the consciousness of human finitude over resources occurring naturally. Therefore, these scholars argue that the traditional concept of sustainability came from the biological sciences in renewable resources. In other words, sustainability is described as the conservation and maintenance of natural resources. However, complete conservation is not possible since humans need the resources to support their lives and existence. As such, sustainability is conceptualized as desisting from destroying resources or exceeding their recovery capacity and considering how future generations would be able to utilize the same resources. Everything found within the environment can be considered to be a resource, and current and future generations are entitled to them. For instance, future generations will need clean water, meaning water bodies should be conserved.
As mentioned earlier, sustainable development is often discussed within the broader concept of CSR. In this case, Zhang et al. (2017) consider sustainable development to be one of the complimentary themes to CSR and explain that corporate sustainability (CS) gained significance in the 1990s. the definition of sustainability has since evolved and shifted from the initial focus on the environment. Today, this concept covers a broader and larger social and stakeholder environment comprising environmental, social, and economic dimensions. Zhang et al. (2017) also argue that corporate sustainability requires businesses to make critical improvements in eco-efficiency and socio-efficiency. The term eco-efficiency can be used to imply how economic value added is measured, and covers such areas as energy, water, and resource efficiencies. On the contrary, socio-efficiency entails how the value-added of a business is assessed in relation to its social impacts. Therefore, the bottom line is that corporate sustainability addressed the basic issues of CSR, which focus on addressing the issues faced by society. most importantly, sustainable development considers the interests and needs of both the current and future generations, which distinguishes it from CSR.
Efforts towards sustainable development are often accompanied by change and innovation since most of the traditional practices are considered unsustainable. For example, logging causes massive land clearances without adequate time for forests to recover. Similarly, the extraction of minerals and other natural resources on large scale causes mass depletion. According to Hassaan et al. (2021), renewable sources of energy become preferable to fossil fuels. However, the development of these alternatives requires technological innovations since few of them occur naturally. Even where such resources as the wind can be captured, the technology needed to develop windmills and produce sufficient clean energy is not readily available across all countries. Therefore, such scholars as Silvestre and Țîrcă (2018) argue that innovation is the key driver for sustainability. Countries that have the technologies have made efforts to pursue cleaner alternatives. Even in such oil-producing countries as Kuwait and the Gulf states, solar power plants are becoming an emerging trend (Hassaan et al., 2021). Such shifts allow the countries to develop alternatives for the future and possibly reduce the reliance on high-polluting fossil fuels.
Kuwait companies also acknowledge the role of knowledge management (KM) in facilitating sustainability efforts. Similar to innovation and technology, knowledge is considered a critical requirement for the development of projects designed for sustainability initiatives. Knowledge management is positively correlated with sustainability, which supports the earlier argument that alternatives to clean energy and other innovations are only available for countries that possess these competencies. The case study of Kuwait companies presented by Chiabrishvili and Zaim (2018) also hints at similarities across the Middle and the Far East, where knowledge management supports the efforts of both the private and public sectors in pursuing CS. Most importantly, the companies across this region have deliberately developed KM-related programs supported by top management and proactive human resource management (HRM) practices. A supportive cultural environment is also observed, which means that Kuwait and the rest of the Arab world can be considered proactive pursuers of sustainable development.
Far from the scholarly studies, the sustainability efforts can be observed from current news and emerging issues that can indicate the policies, initiatives, progress, and success/failure of sustainable development. As with many countries, Kuwait is making positive progress in implementing sustainable development goals, especially in such areas as environment, energy, and health and wellbeing. Kuwait has established several projects, for example, the Kuwait Environmental Governance Initiative (KEGI) seeks to implement the environmental protection law and foresee sustainable management of the environment and natural resources (UNDP Kuwait, n.d.). similarly, the Kuwait Annual national Energy Outlook (KNEO) focuses on exploring ways of achieving sustainable energy production without detrimentally affecting the social and economic growth of the country. As mentioned earlier, there is a blurred boundary between the country’s corporations and the government. In this case, sustainable development projects are often spearheaded by the government. However, major companies, including Zain and Deloitte, have reported their sustainable development initiatives that focus on the environment and support the government’s efforts towards the United Nations and Kuwait’s 2030 vision for sustainable development.
Overall, the level of control that the Kuwait government has on many businesses means that the initiatives towards sustainable development are often shared between the public and private sectors. Even foreign-owned multinationals operating in the country are obligated to show their support for sustainable development. The case of Deloitte can be used to illustrate this point as the company actively engages in such activities as recycling. Sustainable development is implemented as part of the CSR strategy of the company, which is founded on four pillars: people, business, community, and environment (Salhab, n.d.). Therefore, there is adequate evidence to indicate that businesses in Kuwait are proactively promoting both corporate responsibility and sustainability. However, the country’s government remains the key driver of sustainability where a universal approach is adopted. On the contrary, each of the companies in the country has its own programs and initiatives for CSR.
Recommendations
Corporate social responsibility and sustainable development are two concepts that dictate how modern businesses operate. In a nutshell, these concepts involve companies addressing social and environmental concerns as opposed to focusing exclusively on profitability. The case of Kuwait and the rest of the Arab world has been used to illustrate that businesses are proactive in their efforts. Additionally, the government has been seen as a key player in both CSR and sustainable development. Several recommendations can be provided for Kuwait, which focuses on ways of making them more sustainable as supported by the activities of the businesses.
CSR and Sustainability Policy
The government is keen to follow the guidelines provided by the United Nations regarding sustainability as contained in the sustainable development goals. However, individual companies should have a CSR and sustainability policy that focuses on spearheading all initiatives. As mentioned earlier, one of the barriers to CSR is the lack of a proper policy. Additionally, some of the most sustainable and socially responsible businesses have a CSR and sustainability framework and strategy as illustrated in the case of Deloitte in Kuwait. The policy can include the reporting of the activities in the annual reports, a practice that is observed across other continents where CSR reports are developed separately or within the financial reports. The reporting will help the stakeholders keep track of the company’s CSR progress and raise issues as they emerge regarding the companies’ approach and attitude towards CSR. Without a policy in place, it can be argued that it becomes difficult to assess the companies’ commitment towards CSR and sustainability.
Sustainable Energy
Kuwait and the rest of the Gulf states are among the largest producers of natural gas and oil in the world. Therefore, sustainability in the exploitation of this resource is considered a necessity. Even most of the CSR activities are conducted by businesses, it has been established that the government is actively engaged in the operations of firms, especially those owned by the state. In such cases, the companies’ policies and practices mirror the efforts of the government. Oil companies across the country need to develop a working strategy that allows the country to pursue suitability in the production and consumption of energy. Across the region, many countries have diversified their economies to reduce reliance on oil as the main source of government revenue. In terms of sustainability, the focus should be on the production and use of alternative sources that can be considered clean and renewable.
Human Rights Issues
Atrocities against human rights is a recurring theme across the Arab world, a trend that damages the image of the countries involved. As explained earlier, some companies in Kuwait fully support women’s empowerment, which indicates the possibility of promoting a society that respects all people. In this case, it is recommended that businesses should use their CSR frameworks to promote respect for human rights. Such efforts will make Kuwait one of the best in the region and present it with a competitive advantage in terms of attracting investments and promoting foreign trade.
Conclusion
Modern businesses have a critical role to play in addressing social and environmental issues that result from their operations. CSR and sustainable development are two related concepts that govern how companies ensure that social and ecological benefits accompany the economic outcomes of their practices. The case of Kuwait and the Arab world used in this paper illustrates that most countries have been keen on achieving sustainability and their companies support social responsibility efforts. Additionally, the trends observed in Kuwait and other countries are the result of globalization and pressure from the people for businesses and governments to become more accountable and sustainable. Even though the country is making positive progress, a few recommendations have been offered to help the country reap the most benefits from CSR and sustainability efforts.
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