Social Responsibility Principles

The Corporate Social Responsibility is based on the following principles:
 

• Legal Compliance Principle: The enterprise shall comply with and understand all applicable, local, international, written, declared, and effected laws and regulations, in accordance with fixed, specific procedures.
• Adherence to Customary International Laws Principle: The enterprise shall adhere to international and governmental agreements, executive regulations, declarations, covenants, decisions, and guidelines, when setting its policies and practices pertinent to Social Responsibility.
• Respecting Related Stakeholders lefts Principle: The enterprise shall acknowledge and accept the diversity of related stakeholders’ lefts and interests, and the diversity of the major and minor enterprises' activities and products, among other elements, which may affect such related stakeholders.
• Transparency Principle: the enterprise shall clearly, accurately, and comprehensively declare its policy, decisions, and activities, including known and potential effects on environment and society. Moreover, such information shall be available to affected persons, or those who are likely to be affected materially by the enterprise.
• Respect for Human lefts Principle: the enterprise shall execute policies and practices which shall result in respecting existent human lefts in the Universal Declaration of Human lefts.
  
   

Corporate Social Responsibility Dimensions

There are three major dimensions for social responsibility, being: the social, environmental, and economic dimensions, as demonstrated by the following diagram:

First: The Economic Dimension

Within the framework of this Guide, the term of economic dimension respective to social responsibility does not refer to profitability, as one of the commercial operations’ aspects. Alternatively, it refers to commitment to ethical practices inside enterprises, like corporate governance, preventing bribery and corruption, protecting consumer's lefts, and ethical investment.

The Organization for Economic Cooperation and Development (OECD) defines Corporate Governance as a “set of relationships between a company’s management, its board, its shareholders and other stakeholders. Corporate governance also provides the structure through which the objectives of the company are set, and the means of attaining those objectives and monitoring performance are determined. Corporate governance should provide proper incentives for the board and management to pursue objectives that are in the interests of the company and its shareholders and should facilitate effective monitoring, and so help the company to utilize its resources efficiently”. 
 

Corporate Governance ensures non-centralization of authority in one individual or one group inside the enterprise. This requires the existence of regulations and measures inside the enterprise, the role of which is determining the authorities respective to each of its bodies, and creating balance among them, besides having clear lines for accountability. Governance regulations vary according to the size and type of enterprise, and the environmental, economic, political, cultural, and social contexts within which it operates.

Corporate Governance contributes to the following:
 

• Creating and promoting an environment within which the principles of accountability, transparency, ethical behavior, respect for relevant parties’ interests and the rule of law are applied.
• Establishing a system of economic and non-economic incentives that is connected with performance in social responsibility.
•  Utilizing financial, natural, and humanitarian resources efficiently.
• Promoting justice in representing under-represented categories (including women) in higher positions at the enterprise.
• Realizing balance between the enterprise’s needs, concerned parties, including urgent needs, and the needs of coming generations.
• Establishing bilateral communications with related parties, which take into consideration such parties’ interests, and assisting in defining agreement and disagreement areas, and in negotiation for the resolution of potential conflicts.
• Promoting effective involvement of male and female employees in decision making, pertaining social responsibility concerns.
• Achieving balance at the authority and responsibility level, besides the ability of persons who take decisions on behalf of the enterprise.
• Following up decisions to make sure they are properly executed, and to determine liability respecting the results of the enterprise’s activities, whether positive or negative. Within this context, enterprises should adopt and apply the principles of accountability, transparency, ethical behavior, respect for relevant parties’ interests and the rule of law in taking and executing decisions, and in developing a guide on Corporate Governance for it. 
  
   

B. Protection of Consumers Interests
 

Enterprises which introduce products, or render services for customers of consumers are deemed liable against those customers or consumers. Their liability includes providing accurate information, using integral and transparent means which are helpful in marketing, contractual dealings, and strengthening consumption. It also requires mitigating work risks which may result from such operations through developing, distributing, supporting, and providing sufficient information on such operations. Whenever enterprises tend to collect private information, they shall be obliged to preserve the confidentiality of such information.
 

As per the social responsibility, it is connected with fair marketing practices, protection of health and ensuring safety, sustainable consumption, settlement of conflicts and indemnities, protection of information and privacy, and attainment of basic services and products. Once such enterprises realize facts, social responsibility will be achieved by using fair trade, practicing marketing, announcing any dealings with customers, undertaking all reasonable procedures to ensure the soundness and quality of their goods and services, especially:
 

1. Ensuring that such goods or services provided by the enterprise meet all legal standards required for maintaining the consumer's health and safety, including health precautions and product safety regulations, in addition to providing informative labels on the products. All reasonable precautions should be employed or taken to ensure the quality and safety of its services and goods', taking into consideration the entire life cycle for each product, as the objective is to ensure safe utilization, good possibilities for repair, treatment, recycling or safe disposal of excess or damaged goods.
2. Providing effective and transparent procedures when examining consumer complaints, so as to contribute in finding fair and timely solutions for consumer disputes, without any further or unnecessary costs.
3. Avoiding engagement in any other practices that are deemed deceiving, misleading, forged, or unfair.
4. Respecting the consumer’s privacy, providing security, and maintaining its confidential information.
5. Complete and transparent cooperation with public authorities to avoid and/or combat any serious threats that may affect consumer’s health or public safety due to using or consuming its products.
6. Setting terms and conditions in case the consumer files a complaint for a warranted product, making sure that such terms remain effective even of the relevant company is affected to the extent that it becomes incapable of settling its obligations.
   
    

C. Ethical Investment :
 

Ethical investment is the type of investment which takes into consideration the enterprise’s ethical values, and their effects on making the investment decision. There are several and various types of ethical investment, yet the following are the most common:
 

1. The investment which is based on Negative Screening: this type of ethical investment considers all investment opportunities, yet prohibits the involvement in certain investments.
2. The investment which is based on Positive Screening: this type of ethical investment considers all available investment opportunities, to find socially and ethically responsible investment opportunities.
3. The investment which is based on Corporate Engagement: this type of ethical investment aims at changing corporate practices in which it is involved, through promoting dialogue and conducting meetings to encourage such enterprises to be committed to social responsibility.
4. Combination Investment: despite the fact that it is uncommon, some enterprises combine the above three types of investment.
    

As such, the ethical investment paves the way for investors to avoid undesirable investments on the one hand, and provide opportunities to support the investment which follows a similar social and ethical responsibility policy on the other hand.
 

Standards Determining the Ethical Investment:

Standards for determining ethical investment are divided into two main groups, where the first group is connected with the positive effect on social responsibility, and the other is attributed to the negative effect on this type of responsibility.

 

Second: The Social Dimension

The enterprise should participate in achieving the welfare of the society, and in improving and caring for the affairs of its employees. This should positively reflect on increasing their productivity, developing their technical abilities, and providing them with professional and employment security, besides health and social care. The open administrative approach which the enterprise adopts is considered conclusive, as the effect of its social conduct exceeds the enterprise’s own limits.
 

To determine social concerns which are related to priorities which the enterprise seeks to achieve, it should tackle the basic issues which are demonstrated via the following figure under its plan and set priorities.

A. Fair Employment and Work Practices :
 

Enterprises recognise individuals as their competitive privilege, and treat their employees equally as assets and factors for change. As such, they need to win the support of employees, not only to determine the success of their operations from a commercial point of view, but also in terms of the enterprise’s commitment towards social and environmental issues, in order to realize the three pillars of sustainability.
 

This can be achieved through strengthening the enterprise’s values, besides the economic, social, and environmental dimensions of sustainability, and through investing in the quality of professional life, through proper organization of workplace, practices adopted within the workplace, recruitment conditions, and developing and managing human resources. This stems from the fact that socially responsible employment practices are considered essential to achieve social justice and institutional stability.

There is a basic relation between work conditions and productivity. Studies repeatedly highlight the fact that the success of the enterprise which operates within increasingly competitive environments is no longer measured with plain numbers. To the contrary, enterprises which are socially responsible will be the entities which will also take into account other factors like achieving the ideal limit of work relationships inside the enterprise, ability to innovate, and focus on flexible organizational structures, since the quality of work significantly affects productivity and profitability.
 

As for good conducts concept within the workplace, it is far-reaching, and comprises several characteristics. However, the main organizational factors which are related to the work environment, and which contribute to establishing an effective and productive workplace, include the following:

 

• Decent living and economic security levels.
• Leadership that appreciates employees based on merit.
• Safe and healthy work environment.
• Mutual trust between employers and employees.
• Openness culture in respect to the involvement in decision making.
• Promotion of initiative taking and innovation.
• Opportunities for utilizing and developing skills,
  
   

Similarly, as investment is connected with people, enhancing education is connected with improving and caring for decent and productive workplaces through taking care of the humanitarian dimension of competitiveness and productivity. As such, laws and national practices which are guided by international labor standards, whenever possible, represent binding covenants to guide corporate policies and practices.

To achieve some of these objectives, the following areas may be suggested:

 

B. Contribution to the Local Community

Social responsibility cares for the manner in which the enterprise runs the effects of its operations on communities, and the groups which operate under its scope. It is possible that the effects might be positive or negative. Consequently, the manner in which the enterprise runs such effects shall definitely affect the welfare of the local community, and at the end, affect its business.
 

Classifying areas which the enterprise shall contribute to, according to priority, depends on the characteristics of the community itself on the one hand, and on the quality of resources and capabilities which the enterprise enjoys on the other. It is important for the enterprise to be totally aware of the local community, to be able to direct its effort in a straight forward manner towards the community’s own priorities and needs.

The contribution of the enterprise should be represented in a manner that shows respect to the rights of community members, in taking decisions which relate to the life of their communities. Within this framework, it is certain that the enterprise which contributes to the development of its local community receives best results when it executes its programs after consulting with local communities. This way, it will guarantee taking the priorities of the community into consideration, since the development of the local community is more than a charity effort It is indeed a continuous relation between the enterprise and the community it operates within.
 

The main areas for developing the local communities which the enterprise may contribute to include creating employment opportunities, and local economic development initiatives through expanding educational programs, skill development, provisions of health services, caring for the youth through cultural and sports clubs, and commitment to deduct specific percentages from profits before taxes for donations which are allocated to serve societal concerns. 
  

It is common that enterprises commit themselves to social responsibility, in different degrees, by focusing on the following areas:

 

• Environment protection, like reducing gas emissions and wastes, recycling materials, and reforestation programs.
• Charity works, like donating to charities and participating in social causes, like raising awareness on human rights and current concerns.
• Urban areas development, through partnership with the government, to revive small commercial enterprises and enhancing the environment in local towns.
• Investment in local business enterprises, through partnership with non-governmental organizations in areas of decreasing poverty and social development programs.
• Employees-oriented projects, like provision of higher standards for professional health and safety, equal employment opportunities, and flexible work hours.
  
   

Third: The Environmental Dimension

 

The environmental dimension for socially responsible enterprises is defined as the enterprise’s obligation towards covering the environmental effects which result from its operations and products, eliminating emissions and wastes, achieving maximum efficiency and productivity depending on available resources, and decreasing practices which may negatively affect the country and next generations’ enjoyment of resources. The enterprise should be aware of all the direct and indirect environmental aspects which are related to its performance of business, rendering of services, and manufacturing of products. It should also employ certain standards to learn about the environmental aspects which result in distinguished effects to be able to effectively enhance its environmental performance. Such certain standards which are set by the enterprise itself should be comprehensive and fixed. They should also be documented through writing reports to enhance the functional performance of the environment.

The idea of having an environmental management system assists in guaranteeing the enterprise’s commitment to the following:
 

• Managerial commitment to meet the provisions of its policies, objectives and aspirations.
• Focus on spreading the preservation culture instead of setting treatment or corrective measures later on.
• The process of continuous improvement.

In return for applying an environmental management system, economic advantages may be realized. Such advantages must be specified to have them and their values demonstrated before concerned parties, especially stakeholders (shareholders). This should give the enterprise an opportunity to connect the environmental objectives with specific financial results, and so guarantee the availability of resources.
 

The main elements of environmental responsibility include the following:

• Adopting environmental performance specifications, rules and measurement standards for operations and management, which are subjected to maximum environmental protection degrees.
• Facilitating the environmental technological development, conversion and conveyance.
• Promoting environmental awareness.
• Opening negotiation channels with concerned parties, and communicating with such parties on environmental issues. 

The enterprise may be able to improve its environmental performance though dealing with the following, but not limited to, environmental issues:

Reducing emissions: the activities, operations and services provided by enterprises, result in direct and indirect emissions in the atmosphere. Such emissions result from using the enterprise’s products, or from its purchasing habits and electricity consumption. Such emissions may include various pollutants, like lead, mercury, changeable organic compounds, sulphur dioxide, nitric-oxides, and other materials which may lead to environmental deterioration, and effects on human health.
 

Reducing wastes: the enterprises whose business activities result in liquid and solid wastes should depend on programs to reduce such wastes. These programs must be based on reducing sources, reutilization, recycling, waste treatment and disposal.
 

Effective use of power: enterprises consume power in their running of operations and services. Programs which focus on effective power consumption may reduce the demand for power in buildings, in areas like heating, cooling, lightening, effective fuel use, and reliance on alternative fuel resources.
 

Water Preservation: : clean water is considered a global wealth. Attaining pure drinking water is considered a basic humanitarian need, and so is listed as one of an individual's major rights. The developmental objectives for the new millennium include the provision of safe drinking water and health services for all individuals. The effective management for preserving water is achieved through allocating water, and controlling its flow to realize a just and sustainable saving of water resources.

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