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Ethical consumerism, the new-age morality lesson

FNC initiative to foster CSR as a voluntary corporate ethic among UAE firms is a welcome move

Gulf News

UAE’s Federal National Council (FNC) completed a review of 377 articles in a company law draft on Wednesday and will be meeting again on March 7 to discuss clauses pertaining to Corporate Social Responsibility (CSR). The meeting next month will examine the issue of how corporate companies can play a greater role in giving back to society. Among the proposals — which included introduction of a clause that makes it obligatory for companies to contribute towards environmental and social welfare, perhaps even promoting scientific research and development — the most favoured was to urge companies to voluntarily donate a sum towards a better society and cleaner environment. Up to 2 per cent of the company’s average profit over two years could be the starting point. This needs to be seen as a welcome move for UAE’s corporate sector, given the strong roots that corporate philanthropy has struck in the global soil over the last two decades.

The rise of CSR across the world is an organic consequence of the urgency to pay attention to sustainable resources and social welfare. The two are inextricably linked. Increasingly, companies are realising that profitability at the cost of sustainability will not endear them to consumers in the long run. A company that seeks to uphold CSV (Creating Shared Value), a corollary of CSR, also enjoys the natural bonus of brand differentiation — a key marker of profitability. With natural resources becoming an increasingly limited privilege to draw on, ethical consumerism is the new-age morality lesson we cannot afford to ignore. And with the emphasis on companies in the UAE ploughing back a small percentage of their earnings back into society, the grass will always be greener on this side.