Responsible business drives job creation, say experts

The GCC will need to create 3 million more jobs for Gulf nationals entering the job market by 2020, warns UAE businessman Badr Jafar

Businesses around the globe face a choice: be part of society’s problems or be part of the solution, according to experts.

Well-run, transparent businesses can have a major social benefit for communities, particularly when it comes to creating jobs, said Badr Jafar, founder, the Pearl Initiative, co-host of the Corporate Accountability Matters Forum in Dubai last week.

“Trust [from society] helps companies generate value and resilience, enabling them to grow,” said Jafar. “Growing companies create more jobs, stimulate economic activity and in turn provide new opportunities.”

Job creation is a hot topic across the Middle East region. Around 60 per cent of the region’s population is under 25 and overall unemployment rates range from 11 per cent in Kuwait to over 30 per cent in Morocco, according to United Nations data.

The GCC will need to create 3 million more jobs for Gulf nationals entering the job market by 2020, said Jafar.

He spoke during the inaugural Corporate Accountability Matters Forum, a joint Pearl Initiative and UN Global Compact event. The forum raised issues of responsible business and its impact on future competitive growth and sustainable development in the Gulf.

There is rising pressure on companies to take into account social, environmental and corporate governance issues in their activities, said Georg Kell, executive director of the UN Global Compact, noting the “silent revolution” happening in the private sector.

More oversight of companies thanks to technology, the transformation of business from a taker of cheap products to a builder of markets, pressure from investors, and the blurring of lines between public and private goods – such as access to water – are all driving the change, said Kell.

Still, while change to the running of corporations and supply chains is slow everywhere, the confusion of responsible business with corporate philanthropy – just donating money – has perhaps held back progress in the Middle East, Mark Moody-Stuart, president of the Foundation for the UN Global Compact, told Philanthropy Age. Getting responsible business right means working with everyone in your supply chain, he added.

“An individual company can have decent working conditions, for example, but there may be contractors in their supply chain who don’t,” said Moody-Stuart. “Contractors and suppliers can’t change overnight. So they will need help, you may need to give people longer, more secure contracts so they can invest in good working place conditions.”

Corporations in the GCC chapter of the UN Global Compact’s network identified wasteful use of energy and poor working conditions for non-Gulf nationals as their top priorities, said Moody-Stuart.

The Pearl Initiative, launched in 2010, is a voluntary network of businesses working across the Gulf who share best practice on transparency, accountability and good governance in business.

The UN Global Compact, a United Nations initiative, was set up in 2000. It encourages businesses worldwide to adhere to 10 sustainable and socially responsible policies and principles, including in the areas of human rights, the environment and anti-corruption. The voluntary network has 12,000 corporate participants globally.