Supporting Egypt's Corporate Responsibility Framework. Egyptian Corporate Responsibility Center (ECRC)

Transcription

1 Supporting Egypt's Corporate Responsibility Framework Egyptian Corporate Responsibility Center (ECRC)

2 Outline 1. Sustainability in Egypt: a top line view 2. About the ECRC 3. Three sector studies: a brief review 4. The way forward

3 Despite the great need.. Poverty Map Results (2011) There are 4,548 villages in total (the number of households exceeds 100). The percentage of the poor in all villages falls between 0.02% (Touristic villages- Sharm el Sheikh) and 100% (Branis-Marsa Allam) 31 in Giza Others 64 in Assiut From these 126 villages Million Poor In 126 villages the percentage of poor reached 80% or higher

4 Egypt is still locked in traditional CSR Development benefits Philanthropy Contribution of financial or in-kind resources to development projects CSR / Social investment Social investment that is strategic to the core business and that contributes to achievement of the MDGs Policy dialogue / advocacy Dialogue which contributes to more effective governance institutions, rules, policies and processes Inclusive business models / entrepreneurship Enterprise solutions that accelerate and sustain access by the poor to needed goods and services and to livelihoods opportunities Business benefits

5 Mission Empower businesses to develop sustainable business models, in addition to improving the national capacity to design, apply and monitor sustainable CSR policies VALUE Proposition Raise awareness, document case studies, access global Sustainability Knowledge and Culture. Provide professional expertise in sustainability and CSR international standards and codes Engage in Policy Advocacy Create channels and solutions to access Bottom of the Pyramid markets

6 About the ECRC: Main Activities Managing the Local GC Network: 78 companies are currently registered. Conducting CSR Diagnostic Studies for 3 sectors Providing Business Development Advisory services Training (ISO 26000, GC and SA) which deals with a new set of guidelines on Social Responsibility (SR). This helps enhance corporate sustainability

7 ESG Index Objectives Methodology Screening process

8 STATUS OF CSR IN THE TEXTILE, AGRICULTURE AND FINANCIAL SECTOR AND ITS IMPLICATIONS"

9 Benchmarks for Sector Studies Guidelines/ codes Management systems Measuring and reporting tools Business Social Compliance Initiative SA 8000 GRI 3.1 G + Sector supplements Supp. Fairtrade, Bio, Demeter SMETA Sustainability Accounting Standards SOAAN by Ifoam OEKO Tex 100/100 International Integrated Reporting Council OECD Guidelines for Multinational Companies ISO 9001 SAFA by FAO OHSAS UN Global Compact Principles ISO Ethical Trading Initiative ISO Principles for Responsible Investment Principles fro Sustainable Insurance Natural Capital Declaration (UNEP) ISO Equator Principles

10 Collective Research Scope Number of In-depth interviews: Government (9) 2- Private Sector ( 36 ) 3- Civil Society ( 7 ) 4- Academia (1) Number of focus groups: 6 Number of Questionnaires (face to face/online): 284 Hours of Desk Review : 304

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12 Findings Agro-Food Sector is in the core of the water-energy-food nexus and strongly connected to employment, poverty, and education. Price distortions due to energy subsidies and delayed water pricing policies. Poor knowledge of handling procedures labor productivity is very Low Weak institutions and regulations for food safety & security and agrarian cooperatives.

13 Identified priority areas for CSR activities Economic product portfolio (14%) customer responsibility(13%) marketing and branding (12%) Findings Environmental Energy (19%) Soil (15%) Plants and Animals (14%) Social Health and safety (13%) Employee loyalty and Motivation (12%) Labor rights (10%) Identified level of CSR implementation: 37% have already a CSR program 22% make effort to understand CSR 20% think to establish a CSR program 12% have no idea 10% have knowledge about CSR Identified priorities for expectations towards a national CSR network: 16%sharing experience and case studies 18% CSR assessment and consultancy 15% training workshops

14 CSR Framework recommended The Sustainability Model was developed for farmers, processors, traders and retailers in the food value chain. compatible with GRI standard, Global Compact principles, and ISO 9001, and ISO guideline.

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16 Findings Weak regulatory system Lack of monitoring and control Lax implementation of the law Large informal sector adversely affecting the industry Absence of a national CSR strategy for the industry Labor culture is a major challenge Scarcity of skilled labor & low productivity Absence of social and environmental codes and/or standards Absence of funding for sustainability initiatives High interest rate on borrowing

17 Findings Worker perception of CSR: charity, social security and health insurance, ethical practice, clear disciplinary policy Consumer perception of CSR: philanthropy, PR, job creation, better workplace Consumers believe that CSR will: improve reputation, competitive advantage, increase economic benefits

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19 Findings Tendency to serve mainly corporate clients Lack of reach to SMEs and entrepreneurs Risk-averse business approach, without proper credit analysis to better serve local market Short-term profit drive and lack of longer term, strategic sustainability vision

20 Recommendations ESG Reporting, introducing participants to sustainability reporting in a step-by-step manner, use of the GRI Guidelines, as well as emerging ways of linking or integrating aspects of sustainability reporting with annual financial reporting. Corporate Governance, addressing new approaches to corporate governance from a social responsibility and sustainability perspective. Inclusive finance, including the provision of microfinance and micro-insurance as well as improved ways of reaching small businesses (SMEs), entrepreneurs and poor households.

21 Common Themes Emerging Need for stricter policies, institutions and regulatory system to be enforced Need for clear direction, strategy and support from the government CSR has still a lot potential for integration Transition from a philanthropy approach to CSR to inclusive CSR A national CSR network with case studies, training & Consultancy would prove beneficial Addressing some critical issues from the findings

22 The Way Forward Next Move

23 Corrective Action Plan Leading to serious and effective reform of the regulatory system Sustainability policy Anticorruption/anti bribery policy Whistle blowing policy Strict enforcement of the law Effective charges and penalties for noncompliance Designing a route to ethical markets Knowledge of the market needs Binding social and environmental standards and codes Quality standards

24 Corrective Action Plan Development of key practice tools: Environmental and social risk management (ESRM) in banking Sustainable insurance Responsible investment ESG reporting Corporate governance Inclusion of SMEs Educational approach (capacity building & awareness raising ) Economic approach (awards, recognition, incentives, tax deductibles)

25 Business for change Brokering, base of the pyramid business models and supporting pro-poor value chains targeting job creation Produce the second edition of the business solutions for Human Development Report Engage in Social entrepreneurship support program

26 ADAPT SIWA Sustainable Development Initiative

27 Empowering Women Women Empowerment: Institutionalize gender equity policies and facilitate equal opportunities for men and women in access to jobs, working conditions, as well as professional development, training, and participation in decision-making processes.

28 Our biggest challenge this century is to take an idea that seems abstract Sustainable Development and turn it into a reality for all the world s peoples. Kofi Annan, former UN Secretary General Thank You Sherine El Shorbagi