The Importance of CSR in Saudi ArabiaMay 29, 2012

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What is Corporate Social Responsibility (CSR)?

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CS

R

Why are we talking about CSR?

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62%believe CSR “facilitates the development of a stronger relationship between customers and the organization”

Source: National Commercial Bank Study on Perceptions of Corporate

Social Responsibility across the Kingdom of Saudi Arabia

In KSA…

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Source: National Commercial Bank Study on Perceptions of Corporate

Social Responsibility across the Kingdom of Saudi Arabia

56%believe CSR attractsnew investors.

In KSA…

Why are we talking about CSR?

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Source: National Commercial Bank Study on Perceptions of Corporate

Social Responsibility across the Kingdom of Saudi Arabia

Why are we talking about CSR?

60%feel that organizations involved in CSR are able to motivate their qualified workforce to give their best to the organization.

In KSA…

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Source: National Commercial Bank Study on Perceptions of Corporate

Social Responsibility across the Kingdom of Saudi Arabia

Why are we talking about CSR?

50%of customers agree that [CSR involvement] could lead to stronger loyalty.

In KSA… More than

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• 94% think companies must analyze and evolve their business practices to make their impact as positive as possible

• 36% have researched a company's business practices or support of issues

• 56% have boycotted a company for irresponsible practices

• 75% of those who read about a company’s sustainability agenda on its website are more likely to purchase products or services from that company

• 70% are willing to pay a premium on products from a responsible company

Among consumers around the world…Why are we talking about CSR?

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• 96% believe that sustainability issues should be fully integrated into the strategy and operations of a company

• 72% said they would actively support policies that promote financially, socially, and environmentally sustainable growth

• 93% say that sustainability will be critical to the future success of their companies

• 64% see sustainability as an important part of their strategies for product and service innovation

Among CEOs around the world…Why are we talking about CSR?

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Among investors around the world…Why are we talking about CSR?

• 32% of global Bloomberg Terminal users are searching for data on a company’s “ESG Disclosure”

• 18% of global Bloomberg Terminal users are searching for data on a company’s “Governance Disclosure”

• According to one study, physical and financial accountable assets comprise less than 20% of the true value of the average firm

“There is a large market interest in the level of a company’s degree of transparency around ESG performance and policies…[this] might be the result of investors using ESG disclosure quality as a proxy for management quality”

- Eccles, R., Krzus, M., Serafeim, G., “Market Interest in Nonfinancial Information,” Harvard Business School Working Paper, Sept. 2011

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CSR in the region and in KSA

In the region• MENA is going through transformative

times. This means it is time for new solutions to social, economic, and environmental challenges.

In the KSA: • Continued prosperity despite global

economic troubles• Many companies share a common vision

and goals for the Kingdom• Increased interest in addressing social

and economic needs

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What issues in the Kingdom can CSR address?

Training and

development

Training and

development

Environment

Environment

Women in the

workforce

Women in the

workforceEconom

ic diversification

Economic

diversification

HealthHealth

SafetySafety

Entrepreneur-ship

Entrepreneur-ship

Saudization

Saudization

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The Role of Saudi Businesses

• 5 Saudi companies are listed in the latest Financial Times list of the 500 largest corporations in the world.

• Saudi Arabian Market is the biggest in the Arab world and ranks among the top 10 emerging markets

• Saudi private sector provided 86% of the jobs in 2001

• Cultural and religious orientation that is consistentwith the goals of CSR

• Saudi companies are already more engagedin social issues than what is actually reportedor disclosed in public information

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What is SAGIA’s role in CSR?

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• SAGIA facilitated the creation of the Saudi Responsible Competitiveness Index to drive competitiveness through the business community.

• They joined hands with two prestigious partners, The King Khalid Foundation and AccountAbility, the global leader in CSR research to create the Saudi RCI

• Saudi RCI assessed how companies in the Kingdom are creating responsible business practices to build competitive advantage while supporting social development and building enduring economic competitiveness for the Kingdom.

Thank You