Sustainable Development in Kuwait and the Arab World

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Introduction

Corporate social responsibility or CSR refers to the adoption of business models with a high degree of self-regulation. Such models assist companies in becoming socially accountable to the public, the major stakeholders, and their own labor forces. Sustainability or organizational development without causing natural resource depletion is another prominent trend in organizational philosophies. This paper explores CSR and sustainable development in the context of the Arab nations and Kuwait, including the state and significance of CSR activities, factors that predispose Kuwait to success in fostering sustainability, and possible difficulties that Kuwaiti organizations encounter as they strive for developmental sustainability and socially responsible operations.

CSR Practices in the Arab World and Kuwait

CSR in the Petrochemical Industry

In the Arab World, CSR finds use in the form of government-owned entities’ all-encompassing support endeavors. As a member of the OPEC consortium and a prominent oil exporter, Kuwait has seen an increase in CSR-oriented interventions that could be classified as ethical and philanthropic responsibilities as per Carroll’s CSR Pyramid (Kuwait Oil Company, n.d.). Kuwait Oil Company (n.d.), a government-owned daughter company of the Kuwait Petroleum Corporation, has been implementing CSR campaigns since the mid-1970s, including donations for disaster-stricken locations, power-saving rationalization campaigns, and donations to increase Kuwait Autism Center’s patient capacity. Kuwait’s public and environmental health also gains support from governmental entities’ large-scale recycling initiatives, blood donation awareness events, awareness-building campaigns focused on childhood obesity, and mass waste removal campaigns (Kuwait Oil Company, n.d.). Other CSR interventions comprise efforts to boost Kuwaiti society’s overall well-being and artistic potential while also maintaining the nation’s cultural and religious identity. To achieve this, Kuwait Oil Company (n.d.) actively sponsors the Holy Quran Competition, photography and gardening contests, and three sports and entertainment centers for the employees and their families. Therefore, oil companies have set a course for comprehensive CSR programs.

CSR in Financial Services

As a concept, CSR is becoming increasingly popular in financial services and the banking sector. Pursuing ISO 26000 certification to demonstrate socially responsible behaviors is an essential manifestation of CSR in the Arab World’s financial institutions (Sikorska, 2020). Unlike Europe, Muslim-majority countries in the Persian Gulf region incorporate accountability to God into CSR activities, resulting in adding religious meaning to justice as a CSR component in financial institutions (Sikorska, 2020). For instance, the Boubyan Bank in Kuwait incorporates Sharia law and the zakat principles into CSR. This results in limitations on interest-based products, active participation in charity campaigns, such as diabetes prevention programs, free lipid profile tests within the frame of obesity prevention efforts, ophthalmological health promotion, and moderate resource consumption initiatives, including restrictions on water usage (Sikorska, 2020). To some degree, through focused CSR actions, banks challenge the perception of financial institutions as exploiters.

Another prominent CSR use case in the banking industry is the Kuwait Finance House, Kuwait’s first Islamic bank. In line with Sharia law and the giving of alms, the institution refrains from “interest-based activities and speculation” and invests in CSR activities, such as continuous learning opportunities for the staff, extended employee benefits, and donations to support refugees in all states (Sikorska, 2020, p. 119). Environment-related and public health causes inform its approaches to CSR to a large extent, promoting active collaboration with the Kuwaiti Red Cross and local pediatric care associations, participation in diabetes and cancer literacy campaigns, community greening projects, recycling initiatives, and solar energy research (Sikorska, 2020). These activities prove the institution’s multifaceted role in promoting the served community’s holistic well-being.

CSR Activities’ Importance to Society, Economy, and Environment

The abovementioned activities’ importance to the environment, society, and Kuwait’s economy is tremendous. The environment-focused CSR projects aimed at well-controlled resource consumption or increasing community green space help reduce business activities’ harmful influences on the state’s overall ecological situation (Sikorska, 2020). From the viewpoint of economics, a higher share of entities practicing CSR boosts the state’s economic growth by supporting stable employment and promoting productivity at the individual level by improving public health. Recycling campaigns initiated by entities in the petrochemicals field support the state’s resource conservation strategy, thus creating new jobs and boosting local economies (Al-Kout Industrial Projects, n.d.). Kuwaiti business entities’ commitment to CSR brings various benefits to society, including access to entertainment spaces for employees and disease screening procedures increased accessibility. Since Kuwaiti businesses’ visions of CSR are inseparable from the spirit of zakat, local firms can benefit society by compensating for the imperfectly just distribution of wealth and engaging in charity events. With these effects in mind, the promise of CSR in the Arab World and Kuwait cannot be overstated.

Contributors to Sustainable Society/Future in Kuwait

Environmental Factors

Kuwait’s climate conditions contribute to its sustainable development potential by facilitating the instrumentalization of wind and solar energy. Achieving global recognition as a sustainable society involves the large-scale implementation of alternative energy sources that minimize natural resource exploitation. Being located in the desert region, Kuwait has a continental climate, short and warm winters, and hot and long summers, and is one of the leaders in terms of average insolation (Sedaghat et al., 2021). In Kuwait, the levels of solar irradiation per year exceed 2100 kW per sq m, which significantly increases the feasibility of solar energy development endeavors (Sedaghat et al., 2021). As for the anticipated status of this form of renewable energy in Kuwait, the country’s energy authorities strive to make renewable energy capacity, including solar energy, represent over 15% of its power generation capacity by the mid-2030s (Kuwait Institute for Scientific Research [KISR], 2019). Wind power is another key to Kuwait’s sustainable future, and the Shagaya Renewable Energy Park’s wind farms play an integral role in the country’s vision for achieving sustainability by 2027 (KISR, 2019). Therefore, Kuwait’s climate features could facilitate sustainable development at the state level.

Economic Factors

The potential for sustainable development is largely predicted by the signs of economic health, including stable economic activity and employment trends. The economic data peculiar to Kuwait from the World Bank (2020) suggest Kuwaiti businesses’ satisfactory economic sanity. Despite the COVID-19 infection’s financial and social effects, Kuwait has experienced rather modest declines in real GDP levels compared to the other members of the Gulf Cooperation Council – 1.1% in the first quarter of 2020 (World Bank, 2020). Kuwait’s active workforce, including 30.8% of the total female population and 47.7% of male citizens, is sufficient and could be conducive to the successful realization of sustainable development projects in the key industries (World Bank, 2020). The aforementioned trends signify Kuwait’s overall financial health, which might enable specific organizations to allocate funds to projects aimed at reducing natural resource depletion.

Social Factors

Kuwait’s current and future potential for sustainable development is heavily influenced by social factors. As of 2020, the mean life expectancy in Kuwait exceeded 75 years; the retirement age in Kuwait varies between 65 and 75 years old depending on the sector, so Kuwaiti organizations employ generationally heterogeneous workforces (World Bank, 2020). This might constitute a contributor to Kuwait’s sustainable future since there is a general assumption that individuals’ sensitivity to religious activities and duties intensifies with age. Following this logic, older adults’ active participation in the workforce could further emphasize the holiness of charitable zakat payments at the corporate level (Munandar et al., 2019). From social psychology research, individuals in Kuwaiti organizations have medium-to-high levels of collectivistic social orientation, which is in stark contrast with non-Muslim capitalist states, such as the U.S. (Alkhadher et al., 2020). Caring for future generations permeates the sustainable development concept, so collectivistic moods support Kuwaiti organizations in approaching sustainability.

Political Factors

From the perspective of political processes, Kuwait’s position on the autocracy-democracy scale could be used to achieve a sustainable future. As Alsayegh (2021) reports, in Kuwait, the development of renewable energy power plants is only available with governmental financing, so the degree of truly independent activity in the realm of business is severely limited. Kuwait is autocratic, so imposing the course toward obligatory sustainable development could be easier than in more liberalized states. The country’s moderately autocratic political system could create the required level of unity in putting a statewide vision of sustainability into practice in the future. This, however, will require developing realistic but universal sustainability plans.

Cultural Factors

As a non-secular Muslim-majority state, Kuwait has a country-level culture that is permeated by Islamic moral guidelines and theories of achieving social well-being through giving and protecting the underprivileged, so the country’s cultural identity factors into sustainable development. Within the frame of Sharia law, the practice of zakat, which is a charitable donation constituting about 2.5% of the entity’s surplus resources, promotes large businesses’ engagement in social and environmental issues (Sikorska, 2020). The stated factor could be a crucial contributor to the state’s sustainable future, but the proximity of Islamic theory and real-life business practice in Kuwait is what creates a more critical perception of the state’s potential for sustainability. Specifically, for the global research community, the rate of zakat adoption by Kuwaiti enterprises remains unclear, whereas the zakat model of the enterprise could be cited as utopian (Sikorska, 2020). Nevertheless, almsgiving’s embeddedness into Kuwaiti society’s ethical reference points represents an important asset for instrumentalization within the frame of sustainable development plans.

Difficulties in Striving towards Social Responsibility/Sustainable Development and Possible Suggestions/Recommendations

Opportunities for Sustainability in Production and Governmental Support

In the context of non-large organizations in Kuwait, one prominent barrier to sustainable development involves limited access to recycling and resource reuse opportunities. In spite of the government’s appraisal of the sustainability concept, the traditional industrial system with its “produce and dispose of” model is still prevalent in the country. In particular, Kuwaiti small and medium enterprises (SMEs) are affected by non-sustainable models and limited opportunities for making manufacturing activities more eco-friendly (Gulseven & Mostert, 2017). To conquer these difficulties, motivating the government to invest in circular economy research and economic transformation programs for SMEs might be crucial (Gulseven & Mostert, 2017). According to Gulseven and Mostert (2017), SMEs do not outperform other enterprise types in efficiency, making them the most cost-effective environment for circular economy experiments, including introducing resource recycling/reuse steps into production and consumption cycles. Although the hypothetical solution aligns with current research on Kuwaiti SMEs, its realization will be resource-consuming and depend on the authorities’ future economic development plans.

Lack of Training and Limited Awareness of Best Practices in CSR

Despite some prominent business cases, CSR in Kuwait remains sporadic and non-systemic, so companies willing to achieve social responsibility can simply lack experience with charitable events and community support initiatives, which hinders CSR strategy development. As per Jamali and El Safadi (2019), governmental regulations for CSR in Kuwait are currently lacking, and strategic CSR remains salient only in large entities influential in the market. The interventions to address this gap are all-encompassing and would require the government’s active assistance. One practically feasible suggestion involves encouraging the government to support industry-specific large-scale educational events and conferences for business leaders to disseminate takeaways from successful CSR cases and encourage the transfer of experience in pursuing CSR. For entities new to CSR, such events would become a crucial point of learning and enable realistic CSR goal-setting, resource allocation decisions, and more accurate assessments of community needs to inform projects. By providing local knowledge improvements, the suggested education-based solution would support Kuwait in enriching its integrative business culture with CSR-related concepts and transforming the manifestations of social responsibility aside from zakat into popular and achievable goals.

Private Sector Organizations’ Perceived Limited Ability to Take Initiative

Private sector companies in Kuwait are increasingly concerned about limited CSR-related opportunities stemming from the government’s enormous involvement in environmental issues and resource control. As per semi-structured interviews with the representatives of Kuwait Energy, public agencies’ responsibility for the environment and water quality “challenges the private sector to have a role in these areas” (White & Alkandari, 2019, p. 6). Non-governmental organizations’ perceived inability to contribute to resource conservation might be psychologically devastating and promote demotivation. The realistic and legitimate options for resolving this crisis might involve increases in the government’s commitment to the freedom of process improvement ideas. For instance, state-level open events and CSR project contests for private companies would enable Kuwaiti organizations outside of the public sector to make meaningful contributions to the country’s CSR knowledge base and offer innovative ways of serving communities that the government might want to implement. An emphasis on the public sector’s readiness for CSR proposals from external sources would support the culture of excellence and commitment to social change among privately owned businesses.

Conclusion

On a final note, sustainability and social responsibility affect organizational behaviors, corporate decision-making, and strategic planning in various countries, and Kuwait is not an exception. In Kuwait’s organizational environments, CSR-informed initiatives, including corporate zakat donations, charity events, health literacy projects, energy use rationalization efforts, and local area cleaning projects, enjoy popularity among prominent business players in the petrochemical and financial service industries, whereas private entities with non-large workforces cannot practice CSR to the same extent. Regarding building sustainability, Kuwaiti society enjoys a wide range of contributors to success, including the heritage of Islam and Muslim perspectives on almsgiving, climate profiles that facilitate wind and solar power development, overall economic sanity, authoritarianism, and collectivistic orientation. However, Kuwaiti organizations’ striving towards CSR adoption and developmental sustainability can be hindered by limited access to resource reuse options, unpreparedness for the realities of CSR implementation, limited understanding of best practices in CSR, and the lack of environmental control roles for private companies. Addressing these challenges might require circular economy solutions for SMEs and the government’s increased involvement in CSR project appraisal, knowledge dissemination, and the CSR field’s professionalization.

References

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