HKS Mossavar-Rahmani Center for Business & Government

On November 10, 2008, over 20 senior representatives from academia, local chambers of commerce, international NGOs, the Saudi government, and Saudi foundations assembled in Riyadh to discuss the existing Saudi CSR environment and identify concrete steps for furthering CSR initiatives in the Kingdom of Saudi Arabia (KSA). The meeting was co-convened by the Saudi Arabian General Investment Authority (SAGIA), the Harvard Kennedy School's Corporate Social Responsibility Initiative (CRI), and the King Khalid Foundation, in cooperation with Accountability, the International Business Leaders Forum, Tamkeen Consulting, Tomorrow's Company, the United Nations Office for Partnerships, and the World Bank Institute The Saudi Arabian General Investment Authority was established in 2000, and under its 10x10 Initiative, is working to establish Saudi Arabia as one of the world's 10 most competitive economies by 2010. To achieve this, in addition to promoting legal and fiscal reforms that facilitate increased competitiveness, SAGA is supporting a number of initiatives that build on Saudi Arabia's foundation for corporate responsibility to support and increase responsible business practices in the Kingdom.

The benefits of expanding and strengthening an economy's private sector are well established. A healthy private sector fosters increased investment, improved productivity, job creation and growth. Creating and sustaining a productive private sector in fragile or conflict-affected areas involves particular challenges and requires concerted leadership and commitment on the part of business leaders, governments and donors. The payoff for addressing these challenges, however, can be significant in terms of expanding economic opportunity, tackling poverty and improving human security, especially where formal private sector enterprises may be few in number and small in size.

This report profiles the experience of the National Beverage Company (NBC), the local Coca-Cola bottler in the West Bank and Gaza, where the private sector underperforms relative to many of its regional neighbors, and is consequently underutilized as a driver of economic growth, job creation and social development. The challenges to private sector development in the West Bank and Gaza stem from a variety of well-known sources and include political instability, restriction on movement of goods and people, lack of access to capital, and shortages of water and other natural resources, with the situation obviously particularly difficult in Gaza.

There is an increasing chorus of consensus when the public and private sectors discuss the value of educating girls. Such investments are almost unanimously described in a positive light, both for the long and short term. An influential global constituency, ranging from thought leaders at the World Economic Forum and the World Bank, to prominent business practitioners from many of the world's most profitable companies, is coalescing around the idea that delivering on the universal right to education, with a particular emphasis on girls' education, is one of the most effective ways to generate a significant social and economic return on investment.

The obstacles to girls' access to education around the world have long been recognized as a significant barrier to social and economic progress. As noted economist Gene Sperling said at The Council on Foreign Relations in 2004, ""Girls' education is an integral part to virtually every aspect of development. And what is just striking is the amount of hard, rigorous academic data that is, not only about what girls' education does in terms of returns for income, and for growth, but in terms of health, AIDS prevention, the empowerment of women, and prevention of violence against women.

One of the interesting elements of President Barack Obama's statement on economic development in his 2009 Cairo speech is his inclusion of business volunteers as facilitators of development. The President's remarks underscore the degree to which the private sector has become a critical player in development. Many firms have recognized that as the global economy evolves, the sophistication and skill level of consumers, workers and business partners shape not only national standards of living, but feed firm innovation, productivity and profitability as well. In particular, a growing number of corporations are joining governments and public sector actors in building and improving ecosystems to facilitate entrepreneurship, which itself is increasingly identified as a catalyst for economic and social development. Corporations are working strategically to build the culture, develop skills, provide financial resources and create markets to shape environments in which entrepreneurship can flourish.

In order to be held to account for its impact on human rights, a company must internalize human rights principles into the shared values - embraced at all of its levels - that drive its businesses on a day to day basis. Shared values comprise a company's culture, which may or may not always align with its stated goals. Ensuring a robust corporate culture that supports and respects human rights is critical to preventing business-related human rights abuses.

To achieve this culture, a company should take an integrated approach. First, the company must understand what the law forbids (e.g., directly abusing human rights and being complicit in human rights abuses by others) and what the law requires (e.g., identifying, mitigating, and reporting upon risk).

Second, the company must take into account so-called soft law arising from the growing international web of multi-stakeholder initiatives and public and private codes and norms. Although these norms are technically voluntary, they have significant bite in practice, as a result of the absence of a centralized command-and-control system of international law. This has been characterized as a new ""law merchant,"" so named for self-regulatory rules and principles based on usages and customs that medieval European merchants followed in order to fill in the gaps created by what was, at the time, an unresponsive civil law.

Finally, the company must internalize these internal and external standards by living up to their letter and spirit. This requires sound management and authentic leadership, resulting in the adoption of human rights values as core corporate values that manifest themselves in day-to-day actions.

One of the interesting elements of President Barack Obama's statement on economic development in his 2009 Cairo speech is his inclusion of business volunteers as facilitators of development. The President's remarks underscore the degree to which the private sector has become a critical player in development. Many firms have recognized that as the global economy evolves, the sophistication and skill level of consumers, workers and business partners shape not only national standards of living, but feed firm innovation, productivity and profitability as well. In particular, a growing number of corporations are joining governments and public sector actors in building and improving ecosystems to facilitate entrepreneurship, which itself is increasingly identified as a catalyst for economic and social development. Corporations are working strategically to build the culture, develop skills, provide financial resources and create markets to shape environments in which entrepreneurship can flourish.