studies_agri food industry

5/25/2018 Studies_Agri Food Industry

1/78

Corporate Social Responsibility Strategy for the

Agro-Food Industry in Egypt

From Corporate

SocialResponsibilit

y to Corporate

Competitive

Advantage

May 2013


2/78

Corporate Social Responsibility Strategy for the Agro-Food Industry in Egypt

| P a g e

This Corporate Social Responsibility Strategy for the Agro-Food Industry in Egyptwas created

as part of a Diagnostic Corporate Social Responsibility (CSR) study from Heliopolis University

for Sustainable Development along with ECRC/UNDP.

For any questions or remarks please contact:[email protected]

Cairo, May 2013
mailto:[email protected]:[email protected]:[email protected]:[email protected]


3/78


2| P a g e

TABLE OF CONTENTS

ABREVEATIONS AND ACCRONYMS ............................................................................... 3

ABSTRACT ............................................................................................................................. 5

THE STRATEGIC PATH TOWARDS RENEWAL ........................................................... 7

PART ONE: BURNING ISSUE IDENTIFICATION............................................................................ 7

Background Information on Egypt in Relation to the Agricultural Sector ............................. 7

Challenges Around Integrated Food security ........................................................................ 9

Alarming Realities On The Ground ...................................................................................... 12

Stakeholder Analysis: The Egyptian Agri-Food Industry ...................................................... 16

PART TWO: STRATEGIC CSR AS DRIVER FOR COMPETITIVE ADVANTAGE............................... 19

Strategic CSR: The Relation between CSR, Sustainable Development and Competitive

Advantage ........................................................................................................................... 19

Good Governance: The Three Key Pillars of Sustainable Development .............................. 22PART THREE: DESK STUDY, STAKEHOLDER CONSULTATION, QUESTIONNAIRE ...................... 27

Desk Study: Findings of Current CSR Practice in the Egyptian Agri-Food Industry .............. 27

Stakholder Consultation: Discussing Strategic CSR development in the Egyptian Agro-Food

Industry ................................................................................................................................ 29

Questionnaires among Industry Representatives ................................................................ 36

PART FOUR: CSR STRATEGY FORMULATION and IMPLEMENTATION TOOL ........................... 43

Architecture: Vision & Mission of the CSR Strategy ............................................................. 43

The Sustainability Flower: A Strategic Framework For Sustainable Development .............. 45

PART FIVE: ACTION PLAN FOR CSR STRATEGY IMPLEMENTATION ......................................... 51

1. Awareness Raising ........................................................................................................ 51

2. Capacity Building Events .............................................................................................. 51

3. Journal and Knowledge Transfer .................................................................................. 52

4. Quick Assessment of Sustainability Flower .................................................................. 52

5. Social Innovation Process (SIP) ..................................................................................... 55

CONCLUSION ...................................................................................................................... 59

Annex ................................................................................................................................... 60

CSR Questionnaire ............................................................................................................... 60

MEETING MINUTES April 8

th

2013 ....................................................................................... 67MEETING MINUTES April 18

th2013 ..................................................................................... 69

MEETING MINUTES May 19th

2013 ..................................................................................... 71

Quick Assessment Questionnaire ........................................................................................ 74

Bibliography ...................................................................................................................... 76


4/78


3| P a g e

ABREVEATIONS AND ACCRONYMS

AFI Agro-Food Industry

CSR Corporate Social ResponsibilityECRC The Egyptian Corporate Responsibility

Centre

ENCC Egyptian National Competitiveness Council

HU Heliopolis University for Sustainable

Development

IBSC Integrated balanced scorecard

IAP International Association for Partnership in

Ecology and Trade

KPI Key performance indicator

MDG Millennium Development Goals

NGO Non-governmental organizationPESTLE analysis Political, economic, social, technological,

legal, and environmental analysis

SD Sustainable Development

SF Sustainability Flower

UNDP United Nations Development Program

WBCSD World Business Council for Sustainable

Development


5/78


4| P a g e

Index and Tables

Figure 1: Elements affecting food security in Egypt (adapted by author) .............................. 11

Figure 2: Maximizing Philantrophy's Value ............................................................................. 21

Figure 3: Corporate Involvement in Society: A Strategic Approach ........................................ 22

Figure 4: Strategic Elements of Strategic CSR in the Agro-Food Industry ............................... 43

Figure 5: The Sustainability Flower Framework ...................................................................... 45

Figure 6: Sustainable Development Management Cycle ........................................................ 46

Figure 7: Sustainability Flower Balanced Scorecard System ................................................... 47

Figure 8: The Sustainability Flower Quick Assessment ........................................................... 53

Figure 9: Critical Steps for implementing the SF Quick Assessment ....................................... 54

Figure 10: Overview of SF Quick Assessment Outcome .......................................................... 54

Figure 11: Social Innovation Process Flow .............................................................................. 55

Figure 12: Examples of SF Quick Assessment Questions ........................................................ 74

Table 1: Alarming Realities in the Egyptian Agricultural Sector .............................................. 12

Table 2: Civil Society Stakeholders .......................................................................................... 17

Table 3: Public Sector Stakeholders ........................................................................................ 18

Table 4: Desk Study on CSR Communication......................................................................... 28

Table 5: Questionnaire Population .......................................................................................... 36

Table 6: Sustainable Development Balance Score Card - Evaluation Methodology ............... 48


6/78


5| P a g e

ABSTRACT

The first part examines the societal needs of Egypt nowadays and identifies the most critical

burning issues that are related to the Agro-Food Industry (AFI), namely the Water-Energy-

Food nexus. The subsequent section highlights the systemic context in which the challenges

are embedded. This entails a mapping of all relevant stakeholders relevant for the AFI.

In the second part it is argued that strategic CSR can combine business and societal benefits.

It is assessed in how far CSR can be much more than philanthropy and even increase

corporate competitive advantage. This has a strong link to the concept of Sustainable

Development (SD). Furthermore, it is made clear how important good governance is in this

context and how this is constituted. A focus lies hereby on stakeholder communication and

SD reporting. As seen later communication practice and subsequent stakeholder dialogue is

still limited among the majority of AFI companies.

In the third part the results from the four general stakeholders consultation meetings, the

survey among industry representatives with 42 questionnaires and the online benchmark

study on CSR communication practice of local companies are presented. The general findings

are that CSR is not new to the industry but it can be used more strategically and also

standard application can be extended beyond the usual application relevant for export.

In the fourth part, concrete elements of the CSR strategy are presented including a

suggestion for a vision and missionthat came out of the stakeholder consultation meeting

and interviews with experts and opinion leaders in the field. To give a concrete example of

how an implementation of the strategyon company level can look like an integrated

balanced scorecard (IBSC) is presentedincluding specific key performance indicators (KPI).

This IBSC is called the Sustainability Flower framework.

Each chapter contains implications for a CSR strategy in terms of recommended actions andpriorities.In the last chapter a summary of the recommendations for the CSR strategy for the

Egyptian Agro-Food Industry is presented as follows:

1. A series of awareness raising events regarding CSR are to be held. Specific topics

that should be covered include "systemic interrelations of food security challenges"

as well as "integrated sustainability reporting schemes", including concepts like ISO

26000, GRI and its supplement framework for food processing, other frameworks

used in the industry like the Sustainability Flower framework currently applied by

Sekem.


7/78


6| P a g e

2. As indicated in a survey done in the industry, training events for companies that

want to adopt or improve their CSR programs should primarily cover the following

topics:

a. in the societal dimension of CSR: health and safety (priority A), employee

loyalty and motivation, labor rights;

b. in the environmental dimension: energy management (priority A), soil

management, animal and plant management;

c. in the economic dimension: product portfolio, customer responsibility and

relationship, marketing and brand management.

3. The companies of the AFI should be informed about local CSR best practices on a

regular basis and share their experiences and knowledge. Hence, a monthly journal

on CSR practices as well as sector-wide meetings and visitations are to be

introduced.

4. An industry wide introduction of the Sustainability Flower framework is

recommended based on a developed quick assessment tool on individual company

level. The participation is not mandatory and the quick assessment scope can be

adapted to the different company need. The quick assessment is linked to the wider

scope of the Sustainability Flower Balanced Scorecard and allows for an effective

and holistic assessment of company performance with regard to sustainabilityissues. Based on that assessment future priorities and areas for collaboration can be

identified.

5. An industry-wide social innovation process is suggested, in order to address societal

challenges faced by the AFI. According to the industry survey the biggest challenge

for Egypt identified is energy scarcity. A social innovation process integrates key

stakeholders from different disciplines, cultures, sectors of society, and layers of

organization to solve related challenges within the industry and its related

stakeholders. The process ensures collaboration of these stakeholders throughout

the four phases of social innovation:

a. Problem Diagnostics,

b. Solution Finding,

c. Solution Testing,

d. Solution Up-Scaling.


8/78


7| P a g e

THE STRATEGIC PATH TOWARDS RENEWAL

PART ONE: BURNING ISSUE IDENTIFICATION

Background Information on Egypt in Relation to the Agricultural Sector1

Egypt produces the following agricultural products: cotton, rice, corn, wheat, beans, fruits,

vegetables, cattle, water buffalo, sheep, and goats.

The economic situation is quite poor, as Egypt is still underdeveloped. Below are the facts on

the Egyptian economy:

GDP (ppp) = $537.8 billion

GDP/capita = $1,976

GDP annual growth rate = 2.2%

Unemployment rate = 13%

Youth Unemployment = 24.8%

Inflation rate = 7.59%

Interest rate = 9.75%

Agriculture as a % of GDP = 14.7% (of which 24.5% is derived from livestock)

The problems facing Egypts economy, in terms of its agriculture, are a lack of confidence

and cooperation between the owners of the land and the tenants, leading to low attention

given to land maintenance and deterioration in conditions. Further, the land markets are

marked by severe imbalance whilst investment in agriculture is dwindling.

Below are some relevant facts regarding Egyptian agricultural production:

Wheat production = 8.2 million Mt (metric tons)

Corn production = 5.87 million Mt

Cattle = 5 million

Buffalo = 4 million

1If not stated otherwise, the information of this chapter has been drawn from FAOs country study onEgypt (FAO 2011).


9/78


8| P a g e

Sheep = 5.5 million

Goats = 4.55 million

Poultry = 96 million

Regarding livestock, the vast majority is integrated into crop production, as 83% of cattle

and 94% of buffalo are kept on agricultural land.

Only 5% of animal feed comes from rangeland, whilst the majority is the Egyptian clover

(Berseem), to which 1 million hectares are dedicated to the cultivation of. Berseem is itself

not given enough attention to as it is vital to Egyptian agriculture, for the following

reasons:86% of Egypts seed exports are Berseem. It improves soil quality by releasing

nitrogen. Once mowed, it is used as manure. It fights desalination and has high salt

resistance. It does not require pesticides. It is the main forage crop for bees.

Perhaps more importantly, Berseem is the

foundation of reclaimed lands. In order to

make the desert soil fertile farmers introduce a Berseem and livestock cropping system thatintroduces nutrients into the soil, and this has become a rule of thumb for successfully

cultivating reclaimed lands. With this system fertile soil can be achieved in 3-5 years, faster

than any other system. However, Berseem is not invested in. If it were made more efficient,

more land usually kept for Berseem could be allocated to other crops such as wheat.

Below are the relevant social facts regarding the Egyptian population:

Population = 85 million

Population under 24 years of age = 50%

Population growth rate = 1.92%

Literacy = 72%

Urbanization = 43.4%

Agricultural workforce = 32% (of whom 60% are illiterate)


10/78


9| P a g e

The problem facing agriculture is the trend of young people to seek service-sector jobs,

often in the cities, contributing to an increasingly aged agricultural workforce. Older farmers

are less likely to adopt new technology. However, there is still a lack of work even in the

cities so the agricultural workforce does not face a particularly dire threat as of yet.

However, the Egyptian peasants (who work the farms) are among the poorest in the

population.

In Egypt, there are 89.700 tractors in use. This means on average 1 tractor per 929 feddan

which shows the strong technological underdevelopment.

Egypts total area is approximately 1 million square kilometers, of which only3.5% is arable.

Of the 3.5 million hectares of arable land, 3.276 are in the Nile Basin and Delta. The

remainder is rain-fed areas and oases.

Its weather is mostly arid, and has little rainfall. Carbon dioxide emissions currently stand at

196.5 million metric tons.

Of Egypts agricultural land, 94% is dedicated to annual and rotational crops, whilst 6% is

home to permanent crops. 3.53 million hectares are irrigated, representing 99.8% of

cropland. 3 million of these hectares use outdated surface irrigation.

Challenges Around Integrated Food security2

The agricultural sector employs some 40 percent of Egypts workforce and contributes some

20 percent of GDP (MOP, 2012). Egypts food trade deficit of more than US$ 8 billion (CBE,

2011) has a direct impact on its low performance in the macroeconomic environment set of

GCI indicators. While policies that address FS&S are essential to reduce this food trade

deficit, they are taking on an additional high level of urgency as a result of the looming food

security crisis in Egypt.

2

This chapter is taken with kind permission from the Egyptian National Competitiveness Council(ENCC) and its sub-council on Food Safety and Security (FSS) (ENCC, 2013).


11/78


1| P a g e

Increasing food prices coupled with reduced effective earnings have increased the

percentage of Egyptians living below the food poverty line (extreme poverty)3 from 3.8

percent in 2004/05 to 6.7 percent in 2008/09 (World Bank, 2011). The development of the

agriculture sector is recognized as a prime contributor to inclusive growth and poverty

reduction (ENCC, 2008 and 2009), and to food safety, given that it relies on local goods and

services and as such indirectly stimulates economy in rural areas (Gavian et al., 2002).

The urgency of the need to improve the productivity of the agriculture sector is further

enhanced after the January 25 2011 revolution. The January 25 revolution had a few basic

simple demands for bread, freedom, dignity and social justice. The bread demand is a

reflection of the urgent need of the people to be able to provide decent food to their

families, i.e. at minimum, to guarantee food security. While the January 25 revolution was a

massive and peaceful revolt of the people, political analysts continue to warn of a second

Revolution of the Hungry; one that they anticipate will not be as peaceful. This second

revolution is believed to be inevitable if we do not immediately take concrete and significant

steps to reform agricultural and other policies that impede Egypts ability to ensure its own

national food security. At the heart of this security is the wellbeing of the smaller farmers

(4.8 acres or less) who operate 90 percent of the number of farms in Egypt4and who form

the foundation of this sector.

In recognition of the above, ENCCs Food Security & Safety (FS&S) sub-council hasidentified a

variety of factors that determine the performance of the agriculture sector in Egypt in

general and constitute real determinants for food security and safety in particular (see

Figure 1).

Government policies and the awareness (or lack of awareness) of the facts by some of the

stakeholders, parliamentarians and politicians determine the impact of these factors.

3

Extreme poverty is the inability to meet basic food needs (World Bank, 2011).4Some 90 percent of owners own less than 2 ha, 6 percent own between 2-5 ha, and 4 percent morethan 5ha (Booz Allen, 2008).


12/78


| P a g e

Figure 1: Elements affecting food security in Egypt (adapted by author)


13/78


2| P a g e

Alarming Realities On The Ground5

To date, the agricultural sector is one of the largest employers in the country, yet it has

failed to develop to its full potential over the last 50 years. The sector makes up some 20

percent of the gross domestic product and 20 percent of exports, employs about 40 percent

Egypts workforce, and is a source of income for about 55 percent of the population,

according to the Central Agency for Public Mobilization and Statistics. The most

alarmingalarming realties are presented in the table below:

Table 1: Alarming Realities in the Egyptian Agricultural Sector

5

This chapter is taken with kind permission from the Egyptian National Competitiveness Council(ENCC) and its sub-council on Food Safety and Security (FSS) (ENCC, 2013).


14/78


3| P a g e


15/78


4| P a g e

It is worth noting that - in addition to the above alarming signals - crop wastage in Egypt isconsidered one of the highest in the world, both in grain and perishable crops, due to an

inadequate supply chain mechanism. Lack of mechanization in the field, improper handling,

insufficient cold storage and pack house facilities, in addition to the low intake of water and

the low intake of the food industry from agriculture produce. All these factors contribute to

the unjustified wastage up stream. In addition to that, improper channels of distribution and

refrigerated display contributes further to the wastage phenomena downstream. Only 1% of

retail outlets in Egypt are considered, organized modern trade, where as 99% of outlets

belong to the informal economy. A good part of the problem is land allocation for

developers of modern trade facilities close to population centers and likewise with regards

to logistic centers close to production areas. It is estimated that the reduction of wastage to

the internationality acknowledged levels can contribute up to 1% growth in Egypt GAP.

Handling procedures are not fully recognized in Egypt. Here agriculture may be characterized

as disjointed. Production is not linked with marketing. With perishable crops like fruits and

vegetables, storage, packaging, transport and handling technologies are practically non-

existent. Hence, considerable amounts of produce are lost. Thus, as more fresh fruits and


16/78


5| P a g e

vegetables are needed to supply the growing population in Egypt, and as more produce is

transported to non-producing areas, and as more commodities are stored longer to obtain a

year-round supply, post-harvest loss prevention technology measures become paramount. It

is distressing to note that so much time is being devoted to the culture of the plant, so

muchmoney spent on irrigation, fertilization and crop protection measures only to be

wasted about a week after harvest. It is therefore important that post-harvest procedures

be given as much attention as production practice; beginning with planting until the product

reaches the consuming public.

All these mentioned challenges are priorities to be tackled jointly from the private, public

and civil sector. It describes excellent field of engagement in terms of strategic CSR and it is

highly recommended to coordinate the actions of the AFI together with the ENCC sub-

council on FSS.


17/78


6| P a g e

Stakeholder Analysis: The Egyptian Agri-Food Industry

Private Sector

Companies Link

Alfa Misr www.alfamisroil.com

Al shams Group www.al-shams-group.com.eg

Aratco www.aratcoegypt.com

alAhram Beverages www.alahrambeverages.com

Belco www.belco.com.eg

Consukorra www.consukorra.com

Kraft Foods www.mondelezinternational.com

Daltex www.daltexcorp.com

Danone www.danone.com

Edita www.edita.com.eg

Farm Frites www.farmfrites.com.eg

Hashem Brothers for oil and aromatic products www.hashembrothers.com

Magrabiagri . MAFA www.magrabi-agriculture.com

Mansour Group for distribution www.mansourgroup.com

Nestle Egypt www.nestle.com.eg

Rich Bake www.richbake.com

Sekem www.sekem.com

Sobh for food industries & Cold stores www.sobh.com.eg

Unilever www.unileverme.com

Associations Link

CFI (Chamber of Food Industries) www.egycfi.org.eg
http://www.alfamisroil.com/http://www.al-shams-group.com.eg/http://www.aratcoegypt.com/http://www.alahrambeverages.com/http://www.belco.com.eg/http://www.consukorra.com/http://www.mondelezinternational.com/http://www.daltexcorp.com/http://www.danone.com/http://www.edita.com.eg/http://www.farmfrites.com.eg/http://www.hashembrothers.com/http://www.magrabi-agriculture.com/http://www.mansourgroup.com/http://www.nestle.com.eg/http://www.richbake.com/http://www.sekem.com/http://www.sobh.com.eg/http://www.unileverme.com/http://www.unileverme.com/http://www.sobh.com.eg/http://www.sekem.com/http://www.richbake.com/http://www.nestle.com.eg/http://www.mansourgroup.com/http://www.magrabi-agriculture.com/http://www.hashembrothers.com/http://www.farmfrites.com.eg/http://www.edita.com.eg/http://www.danone.com/http://www.daltexcorp.com/http://www.mondelezinternational.com/http://www.consukorra.com/http://www.belco.com.eg/http://www.alahrambeverages.com/http://www.aratcoegypt.com/http://www.al-shams-group.com.eg/http://www.alfamisroil.com/


18/78


7| P a g e

EBA (Egyptian Business Association) www.eba.org.eg

EJB (Egyptian Junior Business www.ejb.org.eg

Egyptian Federation of Industries www.fei.org.eg

GACIC (German Arab Chamber of Industry andCommerce) www.ahkmena.com

HEIA www.heiaegypt.com

Civil Society

Table 2: Civil Society Stakeholders

Civil Society Abbreviation Link

End Water Povertyhttp://www.endwaterpoverty.org/

Global Water http://www.globalw.com/

IRC International Water and Sanitation Centre

IRC http://www.irc.nl/

WaterAid http://www.wateraid.org/uk

Food and Agriculture Organisation of the United

Nations, Egypt

FAO- Egypt

http://www.fao.org/index_en.

htm

Deutsche

GesellschaftfrInternationaleZusammenarbeit,

Egypt

GIZ-Egypt http://www.giz.de/en/

United Nations Development Programme

UNDP

http://www.undp.org/content

/undp/en/home.html

International Fund for Agricultural Development

IFAD http://www.ifad.org/

Arab Water Council

AWC

http://www.arabwatercouncil.

org/

World Water Council

http://www.worldwatercounci

l.org/

United Nations Educational, Scientific and

Cultural Organization

UNESCO-

Cairo

http://www.unesco.org/new/

en/

International Center for Agricultural Research in

Dry Areas ICARDA http://www.icarda.org/

Japan International Cooperation Agency

JICA http://www.jica.go.jp/english/
http://www.fei.org.eg/http://www.endwaterpoverty.org/http://www.endwaterpoverty.org/http://www.globalw.com/http://www.irc.nl/http://www.wateraid.org/ukhttp://www.fao.org/index_en.htmhttp://www.fao.org/index_en.htmhttp://www.giz.de/en/http://www.undp.org/content/undp/en/home.htmlhttp://www.undp.org/content/undp/en/home.htmlhttp://www.ifad.org/http://www.arabwatercouncil.org/http://www.arabwatercouncil.org/http://www.worldwatercouncil.org/http://www.worldwatercouncil.org/http://www.unesco.org/new/en/http://www.unesco.org/new/en/http://www.icarda.org/http://www.jica.go.jp/english/http://www.jica.go.jp/english/http://www.icarda.org/http://www.unesco.org/new/en/http://www.unesco.org/new/en/http://www.worldwatercouncil.org/http://www.worldwatercouncil.org/http://www.arabwatercouncil.org/http://www.arabwatercouncil.org/http://www.ifad.org/http://www.undp.org/content/undp/en/home.htmlhttp://www.undp.org/content/undp/en/home.htmlhttp://www.giz.de/en/http://www.fao.org/index_en.htmhttp://www.fao.org/index_en.htmhttp://www.wateraid.org/ukhttp://www.irc.nl/http://www.globalw.com/http://www.endwaterpoverty.org/http://www.endwaterpoverty.org/http://www.fei.org.eg/


19/78


8| P a g e

Arab Region Environmental Information

Network AERIN http://www.irc.nl/page/6610

Centre for Environment and Development for

Arab Region and Europe

CEDARE http://www3.cedare.int/

International Development Research Centre IDRC

http://www.idrc.ca/EN/Pages/

default.aspx

Holding Company for Drinking Water and

Wastewater

HCWW

http://www.hcww.com.eg/en

/Content.aspx?ID=1

Nile Basin Capacity Building Network for River

Engineering

NBCBN-RE http://www.nbcbn.com/

World Health Organisation Regional Office for

the Eastern Mediterranean EMRO http://www.emro.who.int/

United Nations Water http://www.unwater.org/

Egyptian National Competitiveness Council

ENCC http://www.encc.org.eg/

Public Sector

Table 3: Public Sector Stakeholders

Public Sector Abbreviation Link

Ministry of Water Resources and Irrigation MWRI http://www.mwri.gov.eg/

National Water Research Centre NWRC http://www.nwrc-egypt.org/

Ministry of Agriculture and Land Reclamation MALR

http://www.agr-

egypt.gov.eg/En_Default.aspx

Ministry of State for Environmental Affairs EEAA http://www.eeaa.gov.eg/

National Association of Water Companies NAWC http://www.nawc.org/

Egyptian Public Authority for Drainage Projects EPADP http://www.epadp.org.eg/

Water User's Associations WUAs
http://www.irc.nl/page/6610http://www3.cedare.int/http://www.idrc.ca/EN/Pages/default.aspxhttp://www.idrc.ca/EN/Pages/default.aspxhttp://www.hcww.com.eg/en/Content.aspx?ID=1http://www.hcww.com.eg/en/Content.aspx?ID=1http://www.nbcbn.com/http://www.emro.who.int/http://www.unwater.org/http://www.encc.org.eg/http://www.mwri.gov.eg/http://www.nwrc-egypt.org/http://www.agr-egypt.gov.eg/En_Default.aspxhttp://www.agr-egypt.gov.eg/En_Default.aspxhttp://www.eeaa.gov.eg/http://www.nawc.org/http://www.epadp.org.eg/http://www.epadp.org.eg/http://www.nawc.org/http://www.eeaa.gov.eg/http://www.agr-egypt.gov.eg/En_Default.aspxhttp://www.agr-egypt.gov.eg/En_Default.aspxhttp://www.nwrc-egypt.org/http://www.mwri.gov.eg/http://www.encc.org.eg/http://www.unwater.org/http://www.emro.who.int/http://www.nbcbn.com/http://www.hcww.com.eg/en/Content.aspx?ID=1http://www.hcww.com.eg/en/Content.aspx?ID=1http://www.idrc.ca/EN/Pages/default.aspxhttp://www.idrc.ca/EN/Pages/default.aspxhttp://www3.cedare.int/http://www.irc.nl/page/6610


20/78


9| P a g e

PART TWO: STRATEGIC CSR AS DRIVER FOR COMPETITIVE

ADVANTAGE

Strategic CSR: The Relation between CSR, Sustainable Development and

Competitive Advantage

There is an obvious connection between the private sector and its activities and the

sustainability of a nation. Companies can be considered as the main driver behind economic

growth and they affect natural resource depletion and social conditions in a society

substantially. In this section the focus lies on deriving an ethical need for companies to

adopt the genuine wealth approach that was discussed for the national level.

The social contract theoretical view of the corporation defines it as a group or a chain of

implicit and/or explicit contractions between individuals and groups.6 The stakeholder

theory sees corporations involved in the social system and to the new social contract7

which presents a mix of reciprocal expectations of the role and responsibilities of each of the

involved parties in a corporate and social environment. These expectations are for instance

articulated by the European Commission and ask corporations, in addition to economic and

legal rights or duties, to perform social, ethical and environmental responsibilities. 8This

basically means that companies should also act in the interest of stakeholders.9

Porter together with Kramer came up with an article on this topic called Strategy and

Society: The Link Between Competitive Advantage and Corporate Social Responsibility

(Porter, 2006). The authors basically see no inherent contradiction between improving the

companys competitive context and making sincere commitment to bettering society. They

criticize that many firm have an approach to CSR that is disconnected from business and

misses the greatest opportunities for companies to benefit society. For the authors the

more closely tied a social issue is to a companys business, the greater the opportunity to

leverage the firms resources and benefit society. (Porter, 2006, p.88)

6Jensen (1976), p. 427Carroll (1999), p. 43

8European Commission (2001), p. 139 According to Freemans widely referred definition [a] stakeholder in an organization is (by

definition) any group or individual who can affect or is affected by the achievement of the

organization's objectives. Freemam (1984), p. 46


21/78


21| P a g e

The logic of the authors builds on Porter's concept of the National Diamond of

Competitiveness. The four elements of a national competitive diamond are: (1) Factor

Conditions; (2) Context for Strategy and Rivalry; (3) Related and Supporting Industries; and

(4) Demand Conditions.

Factor Conditions

High level of productivity depends on trained workers, high-quality scientific and

technological institutions, adequate physical infrastructure, transparent and efficient

administrative processes (such as company registration or permit requirements), and

available natural resources (like water).

Implication for CSR strategy: (1) Organize position papers and lobby work; (2) Engage in

water efficiency monitoring activities along the value chain

Demand Conditions:

With demand condition Porter describes the size of the local market, the appropriateness of

product standards, and the sophistication of local customers. Sophisticated customers

enhance a region's competitiveness by providing companies with insight into emerging

customer need and applying pressure for innovation.

Implication for CSR strategy: (1) Organize position papers and lobby work; (2) Start

customer education awareness on sustainability impact on products standard

development

Context for Strategy and Rivalry:

This dimension includes the rules, incentives and norms that govern competition in a region

or in a nation. These can have a great influence on productivity. Government policies that

encourage investments, protect intellectual property, open local markets to trade, break upor prevent monopolies and cartels, and reduce corruption make a location more attractive

to business.

Related supporting Industries:

High quality supporting industries and services that are nearby can enhance a company's

productivity a lot. Using distant suppliers via outsourcing is of course possible in our

globalized world but using capable local suppliers of services, components, and machinery is

more efficient. The reason is because proximity enhances responsiveness, exchange of


22/78


2| P a g e

information, and innovation. This comes on top of the benefits of lower transportation and

inventory cost.

Implication for CSR strategy: (1)Include supply chain in the awareness and capacity

building processes and also report on total social and environmental product footprint.

Finding the best synergy between the two extremes of pure philanthropy and pure business

is one key for management to identify the what of corporate sustainability management.

The desired array of actions is illustrated inFigure 2 as the brightly shaded triangle area.

Figure 2: Maximizing Philantrophy's Value

Source: Porter (2006)

This synergetic value creation is also supported by the findings of Post: According to the

Stakeholder View, the critical challenge for contemporary management is recognition of the

mutual interests among the firm and its stakeholders, leading to the development of

consistent and supportive policies for dealing with them. (Porter, 2006, p. 91)

It becomes clear that Porter et al clearly do not see companies responsible for all the worlds

problems. In their eyes a companys main contribution for society is to contribute to a

prosperous economy.


23/78


22| P a g e

Figure 3: Corporate Involvement in Society: A Strategic Approach

Source: Porter, 2006, p. 88

In their analysis Porter and Kramer focus more on the social aspect of CSR and corporate

philanthropy. This is inherent in their external perspective because the improvements in the

competitive context are mainly related to social stakeholders. Still, Porter et al would rather

not agree to the social contract per se and see an ethical obligation to do CSR. Engaging in

this field is only justified by the motivation of maximizing profit which is in their eyes the

main task of a corporation. Porter and his colleague for instance did not point out the need

to incorporate the social dimension into the measurement of success. Their rationale is that

a healthy society creates expanding demand for business.

Good Governance: The Three Key Pillars of Sustainable Development

Hess' (2008) approach presents a New Governance regulation for firms that focuses on

decentralized, participatory, problem-solving-based approach to regulation that foresees

three necessary requirements for social reporting in order to be effective: disclosure of

material information, dialogue with stakeholders, and the moral development of the firm.

He considers social reporting as the crucial driver to make corporations more sustainable

provided it is done right.

Hess' governance based approach lies between the traditional command-and-control

regulations and private market approach (which would be only voluntary reporting).10In

10"Using regulation to achieve sustainable economic development faces significant challenges. Thefailings of traditional, command-and-control regulation have been covered extensively in the legal

literature and include arguments of inefficiency, over-deterrence, normative legitimacy, significant

time delays in responding to new harms or changing societal expectations, limitations of enforcement(e.g., discovery of compliance failures), and focusing only on minimal, technical compliance with

regulatory standards rather than encouraging corporations to work toward higher goals that their


24/78


23| P a g e

response to the shortcomings of both markets and traditional regulation, he suggests a new

approach that complements and also replaces traditional regulation.

Disclosure and not Dissembling

This requirement asks companies report on all relevant and material information that isrelated to the company's environmental and social performance and policies. This is the

basis for an "action cycle" This cycle starts with (1) the company discloses new information,

then (2) stakeholders process the information and then they (3) decide how to react on the

information. Afterwards, (4) companies take into account the alteration of behavior and (5)

respond accordingly. With each new report or disclosure action that reflects on the changes

made the action cycle starts again.

Proper disclosure fails when companies do not report true information, or only report what

is good for them and leave the bad news unreported, or do not provide enough context

information to interpret the presented information right. Hess calls this dissembling.

Another dissembling practice is to report on policies but not providing any information in

how far these policies got implemented. Empirical evidence shows that more and more

firms are dissembling their information in their social reports. Hess describes this as a "form

over substance problem" which interestingly comes from the stakeholder's demand for

information. "The greater the public intolerance for corporate irresponsibility, the greater

the costs to the firm if it discloses negative information. This leads to the ironic result that

the more stakeholders want information and tend to act upon it, the less willing firms are to

disclose such information." Often a firm's voluntary disclosure about their social and

environmental performance has nothing to do with their actual social and environmental

performance.

Gray remarks that in practice many companies issue a superficial presentation of data that

does not cover all aspects of sustainable development and therefore no sensible judgementon the basis of an organizations reporting in their Sustainability Reports on whether or not

the organization was unsustainable.

Standardization yes but mandatory? Hess also recognizes the danger in the existing

voluntary reporting frameworks like GRI. They could actually prevent the establishment of

stronger mechanisms like stronger regulation that make some social and environmental

capabilities make attainable." At the other extreme, markets have well-known failings of their own.Simply stated, the general concern is that "private markets cannot be relied on to give appropriate

weight to public interests over private ones without active public involvement."'"


25/78


24| P a g e

information disclosure mandatory. The big danger is that companies can freely select what

they disclose.

The application of reporting standards and the completeness of that reporting are, at best,

uneven. Therefore the widespread upbeat claims about the quality, diversity and incidence

of reporting on sustainability that are not carefully qualified might be thought to be, at

best, misleading. Equally, any report which only covers selected elements of an

organizations activity around a concept that it blatantly fails to define might, and not

entirely unkindly, be thought a trifle dishonest, perhaps?

Paul Hawkenanalysed the socially responsible investment (SRI) industry and found out that

the existing SRI mutual funds have no common standard, definitions, or codes of practices.

Even companies like Enron, McDonalds, General Electric, Lockheed Martin, and over 90

percent of Fortune 500 companies could be found on the lists of SRI funds. In other words,

the cumulative investment portfolio of the combined SRI mutual funds was virtually no

different than the combined portfolio of conventional mutual funds. (Hawken, 2004, p.17)

Implication for CSR strategy: (1) Improve CSR reporting and in the best case integrate this

into sustainable development reporting scheme on company level; (2) Harmonize the

reporting standards and frameworks among AFI companies and assure comparability of

selected indicators to allow for benchmarking as well as best practice exchange.

Dialogue and not Directing

The element of dialogue between the company and its stakeholders is focused on problem-

solving and continual improvement. It is important that throughout the dialogue process

consensus building about the underlying norms and goals of the company's operations takes

place. This is currently not addressed through the traditional reporting frameworks. There

should be a reflection of what the stakeholders suggest and a transparent determination

which suggestions are implemented and which not. The dialogue should provide

justifications for the company's actions. In other word the companies should address their

legitimacy to operate in society.

Unfortunately, the reality looks different. The KMPG surveyof large corporations in 2009

found out that 32 percent of firms search feedback from their stakeholder and only eight

percent gave feedback to them in public. This leaves the meaningfulness of the remaining 92

percent companies with their stakeholder questionable. Hess actually concludes that

companies are directing the process of stakeholder dialogue to limit stakeholder


26/78


25| P a g e

participation and power. But without power stakeholder cannot effect change from

dialogue. Hess remarks a tendency of corporation to even ignore comments of less-powerful

stakeholders. The problem is that without a proper dialogue it is not possible to guide a

multi-stakeholder, open-ended discussion about the company's progress towards

sustainable development.

Implication for CSR strategy: (1)Establish platform for stakeholder dialogue based on

reporting initiatives; (2) come up with process for industry wide coordination of activities

through mutual priority setting based on stakeholder needs assessments.

Development and not Decoupling

The aim of the New Governance Reporting is to improve corporate sustainable

development. It relies on the assumption that a huge part of corporate sustainable

development is not only enforced by external pressure but must come from inside the

company through a self-critical reflection of its behavior, processes and organizational

norms that are the basis for decision making. Hess speaks of the "moral development" that

should be part of the strategic management that takes information from the environmental

and social accounting process into account. This development is also part of the criteria for

internal resource-based competitive advantage described in section 3.5.2.

The pillar development requires that companies incorporate social and environmental

information into their policies and practices in a meaningful way. It is a big problem if

companies use reporting only for cosmetic reasons and that the information is decoupled

from their actual operations. One form of decoupling is known as "Greenwashing" which

reduces social reporting to a superficial public relation (PR) strategy.

Hess points out that this decoupling cannot only create external distortion but also may

cause a false impression internally. A sign of decoupling is when people from insight and also

from outside the company attest that the corporations communication and reality are two

different worlds.

Disclosure, Dialogue and Development should work closely together to create an effective

form of New Governance regulation. What could have been seen is that the current

tendencies of dissembling, directing and decoupling are counterproductive forces that

prevent companies form becoming sustainable.


27/78


26| P a g e

Implication for CSR strategy: (1)Incorporate sustainability indictors into company

governance and receive assistance and training to do so; (2) come up with integrated

Balanced Scorecard System to track development over time.


28/78


27| P a g e

PART THREE: DESK STUDY, STAKEHOLDER CONSULTATION,

QUESTIONNAIRE

Desk Study: Findings of Current CSR Practice in the Egyptian Agri-Food

Industry

A comparative study of international and Egyptian

companies in the agro-food industry within the scope of

the CSR Diagnostics study showed that:

International companies are dealing with CSR on

corporate level regardless the sustainability of their core

business model,

The majority of Egyptian companies have rather a

philanthropical approach rather than a strategic CSR

approach,

The majority of Egyptian companies in the Agro-

Food industry do not have a published report on social, environmental and

economic data,

The majority of Egyptian companies in the Agro-Food industry do not have any

communication about their CSR activities in form of a document

Only some Egyptian companies in the Agro-Food industry report on their CSR

activities online,

In general, there is no coordination between companies CSR activities in one

industry,

See overview on findings coming out of the online desk studybelow:


29/78


28| P a g e

Table 4: Desk Study on CSR Communication

Implications for the CSR strategy: There is an urgent need for communication on the

companies CSR activities. This requires adequate documentation and measurement

activities about the CSR activities among the companies in the Egyptian AFI.


30/78


29| P a g e

Stakholder Consultation: Discussing Strategic CSR development in the

Egyptian Agro-Food Industry

The following events took place in order to come up with the content of the CSR strategy. It

has to be mentioned that Heliopolis University, through its strong partnership together with

Sekem Holding, has a long history of engaging with CSR in the Agro-Food Industry.

Workshop 1: International Stakeholder Meeting

Date: 18-20thJanuary 2013

Participants:

International Association for Partnership in Ecology and Trade (IAP): In 1996, the network

was established by SEKEM and several of its long-term European business partners to create

a dynamic interaction between farmers, producers, and traders with the goal to provide

consumers with high quality organic products. The IAP is a cooperation forum for organic

agriculture that enhances commitment to nature and a higher food quality. The partners

have cooperated since 1984 to strengthen the basis for biodynamic and organic agriculture

world-wide. IAP members exchange market information, plan strategic initiatives for

marketing of organic products, finance new projects and strengthen existing ones. These

actions are taken to facilitate the development of organic cultivation movements across the

world. The partners try to meet four times annually to evaluate progress, implement

decisions, and discuss new strategies. Currently, there are 14 constant members who are allhigh-level businessmen in their respected companies.

Outcome:

Discussion of the challenges of the current economic system and the need for a

paradigm shift,

Formulation of the need to define agriculture in wider terms and to see behind the

basis for societal development (see later vision& mission of agriculture for the

future),Commitment to support the movement beyond the organic communities and to

search for open dialoguewith any other form of agriculture.


31/78


31| P a g e

Workshop 2: Local Stakeholder Meeting I

Date: 8thApril 2013

Participants:

AminaGhanem ENCC Executive DirectorMaryam El Masry HU Fundraising Specialist

EssamSelim IBIS Chairman

MamdouhAboulEish ISIS General Manager

AshrafAdawy Al Rashidi El MizanMaintenance

ImanTawfik El Agroudy Cesam Foods- Supply Chain Manager

Mohamed Riad Chamber of Food Industries

Technical Specialist

Khaled Gasser Egreen - General manager

Heba Ibrahim AratcoExport Manager Assistant

Ibrahim Saad ISIS

Ahmed Rashad Sekem for Land reclamation general

manager

Abdel Dayem Libra General Manager

Ismail Aoul el eish ISIS FoodFactory manager

Sameh Abdel Hamid El MizanProduction Manager

Gehad Salem Lotus OrganicGeneral manager

HatemShafie Sekem Holding CFO

Kadria Abdel Motaal HU research Director

Naglaa Ahmed Eco Tech, sustainable Development

AkramMarwan ECRC/ UNDP UNGC officer

RashaWahieb HU Lecturer

Outcome:

CSR strategy was presented to workshop participants by HelmyAbouleish (seeAnnex),

In the discussion it came out that:

o There should be a quick win situation for both the company and employees.

This means to help employees to get more involving in applying CSR

activities instead of enforcing them.

o Awareness campaign should be arranges for companies to apply CSR, this

will clarify advantages for example:

The company will gain a good reputation in local and international

markets

Resources management improvements


32/78


3| P a g e

o Awareness campaign should focus on strategic CSR: how to gain profit but

also to serve the society,

o Government should participate also in CSR application,

o Bigger companies can contract small farmers for long term period and help

them to improve cultivation practices and in order to get better selling

prices,

o Decoding of CSR to reach all levels from labors to higher level of

management in each company is necessary.

Workshop 3: Local Stakeholder Meeting II

Date: 18thof April 2013

Participants:

Mr. Maximilian Abouleish, Social Innovation Centre, Heliopolis

University

Mrs. Naglaa Ahmed, Sustainable Development Department,

Sekem

Mr. Yousry El Tenawy, Food Sector managing Director , CFI

Mr. Mohamed Riad, Technical specialistCFI

Mr. Youssef Maher, Export Manager, Al Ahram Beverages

Mr. Ahmed Refaay, Operation Manager , Farm Frites Egypt

Eng. Yossef Ali, Quality Management Daltex

Mrs. Ola Lotfy, Corporate affairs Manager , Kraft Foods

Mr. MahmoudGhanem, Kraft Foods

Mr. FathiGaber, Arama

Outcome:

CSR strategy was presented to workshop participants by Maximilian Abouleish

It was offered that Heliopolis University and other members can use CFI as a

marketing platform for marketing CSR idea through CFI network,

CFI can provide communication channel such as journal and newsletter to spread

information about CSR activities,

A CSR initiative would allow for pooling resources and distributing competences

according to strengths of partners,

Kraft foods, discussed the support of establishing a factory for recycling paper,


33/78


32| P a g e

Introducing the Sustainability Flower network through a Quick Assessment would

help participants in the CSR initiative to establish a learning framework hat helps for

mutual learning, benchmark and communication,

It was agreed to have regular monthly meetings with a rotating host organization,

CFI invites all CSR initiative members to provide information about own CSR best

practice in order to come up with a CSR best practice catalogue of the Agro-Food

Industry,

The strategy needs to be further discussed and simplified in order to be able to

communicate it to all levels of employees,

Need for further discussing the Sustainability Flower framework,

Heliopolis University can offer trainings or summer school for CSR and technical

support for implementing Sustainability Flower framework, especially with the data

collection (e.g. soil assessment)


34/78


33| P a g e

Workshop 4: Local Stakeholder Meeting III

Date: 19thof May 2013

Participants:

Mr. HelmyAbouleish, Sekem Vice President & CEO

Mr. HatemElShafie, CFO

Mr. Max Abouleish , Sustainable Development Manager

Mrs. Naglaa Ahmed, Sustainability Department

Mrs. RashaWahieb, LecturerHeliopolis University

The following members of ECRC were present : -

Mrs. SherineElShorbagy

Mr. AkramMarawan

Miss Sara ElRafie

Miss Alia Wagih

Te following attendance from Agro Food companies and other sectors were present : -

Mis Mona Fouad , Kraft Foods

Mr. MohmoudGanem , Kraft foods

Mr. Ahmed Refaai, farm Frites

Mr. KhalilNasrallah, Wadi foods

Mr. Mohamed Riad , CFI

Miss Christine Samir, Consukurra

Miss Nancy Gerges, Al Ahram Beverages

Mr. MufaddalSeifEldin, Wahba


35/78


34| P a g e

Mr. Ali Hussien, Wahba

Mr. Mohamed Fares, Wahba

Mr. Omar Abdin, Leafs Egypt

Mrs. SherifaRashad , Leafs Egypt

Mr. Bernard Rohkemper, GIZ

Mr. GregorSchueler, GIZ

Outcome:

CSR can be much administrated, through the sustainable development flower

framework which reduce effort while offer a tool

What is the entity to promote sustainable development flower

Is there a point to share experiences of companies which have CSR

One of the comments to indicate water , child labour, labour rights etc. are important

issues , how to deal with it ?

We need to know what are the other projects of CSR to avoid duplication

ECRC involved in the CSR sharing by government , but private sector has to

concentrate on their role as a stakeholder. Activities, measurements have to be developed .its not essential at this stage to

involve government at lease to gather ideas and strategy to start with. Where is the

policy angel.

Resource pooling & benchmark are required to map best approaches to avoid

double efforts

To start CSR initiatives from bottom to top levels of management and also to be more

easier for understanding

Do we have possibility of how we continue CSR approach in umbrella of CFI which

can play a role to its member behave

Many of the international clients asked to fulfill some requirements indicated under

CSR like water & carbon footprint. There must be compliance with some standards

most of the exporter see that this is additional cost and efforts and not increasing

sales

Is it a way of competitiveness ?of course yes, as you will learn to use it as a tool for

business sustainability for the future. Competitiveness is to stay longer in the market

at the same time it is a way of change

To start each company its priority and how to get use of CSR pillars in the industry

and all companies to form a cluster.


36/78


35| P a g e

Each company can stick a label of CSR initiatives like ( i.e. product has carbon

footprint less, not using child labour ). Product tracing tools including sustainable

development flower and KPIs. ISO and global compact can develop indicators

There are principals and standards to follow but the problem is that the companies

dont know where to start

There is no certain definition of CSR but for example if you apply ISO 26000

guidelines you can define your CSR activities like what you can do to develop water

and labors

How much this comprehensive work on this meeting to find a way to increase

productivity and apply CSR

Examples : water scarcity and growing organic

If you grow organic and will find that you are using less quantity of water comparing to

conventional growing.

There will be CO2 tax and this will increase competitiveness

Most of the companies who dont have time or team to work on CSR so they can hire

NGO to apply it


37/78


36| P a g e

Questionnaires among Industry Representatives

This chapter presents the findings from the questionnaire distributed to different companies

from the AFI. The sample size was 69 individuals from 11 companies.

Table 5: Questionnaire Population

Company Name

Number of

Questionnaires

Aratco 5

ATOS 5

Daltex 1

El Shams Group 4

ISIS Foods 6

ISIS Herbs 6

Juhayana 7

Magrabi 1

NatureTex 7

Total 42

Pending

Questionnaires 78

Status: 01.05.13

Comment: The original questionnaire can be found in the Annex.

Q3: The majority of the respondents of the questionnaires (75%) were

manufacturers, followed by (17%) suppliers and the remaining 6% were farmers and

2% retailers.

- Q5: The majority of the respondents of the questionnaires (43%) work in companies

with 201-500 employees, followed by 38% of the companies employing between 51

and 200 people, then 15% employing more than 1000 and only 2% between 501 and

1000 employees.


38/78


37| P a g e

- Q6: Concerning the concept of CSR, 37% of respondents replied that they already

have a CSR program and 20% stated that they actively think about it and aim to

establish one. 22% of stated that they have been exerting some effort to better

understand its pros and cons. Only 10% mentioned to have only little knowledge

about the subject and 12% said that they have no idea of what CSR is.

Implication for CSR strategy: General CSR awareness and clarification session

needed for almost half of the companies

- Q7: Almost half of the respondents believe that CSR in companies should be

implemented in a cross functional department collaboration manner, followed by

33% who think that the CSR department should exist as an independent

department, the remaining 18% have no precise organizational structure for a CSR

department in mind.

- Q8: The majority of 32% of respondents have the opinion that CSR should be

addressed towards the companys employees, followed by 23% who find that local

communities should have priority in CSR activities, 14% think CSR should go towards

the companys customers, and the remaining 10% think the government needs

should be addressed, 9% think shareholders needs should be prioritized, 7% believethat CSR should address the companys suppliers, and 5% vote for NGO support.

Implication for CSR strategy:Focus of CSR actions on companys employees and

community relevant for company.

- Q 9: Regarding the question of why the respective company of the respondents is

interested in applying CSR, 17 % checked that this would improve their business

performance, followed by 16 % who want to increase their competiveness, 12%

indicate that CSR would be aimed to charity and for environmental concerns relating

to products or services, 10% checked that this would solve social concerns related to

products and services, 8% want to attract new investors, 7% would do it for legal or

regulatory obligations, 6% want to use it as a differentiation opportunity, 5%

because of customers demand and another 5% because of community pressure, and

the remaining 2% want to do CSR because of information demand by stakeholders


39/78


38| P a g e

- Q 10: Regarding the objective of CSR activities with respect to the addressed

stakeholders, the majority of 24% chose that it will be for social care and workers,

followed by 19% to internal business performance improvement, 15% for social and

environmental impact assessment and another 15% for attracting and/or retaining

talented personnel, then 14% for analyzing stakeholders needs and expectations, 5%

for the provision of a holistic reporting effort, and the remaining 8% are divided into

two equal groups, first for the provision of a future oriented business perspective

and second for benchmarking.

Implication for CSR strategy: CSR activities should achieve the following:

Benefit the social conditions of workers

Improve business performance

Be transparent on companys social and environmental impact on

community and environment

- Q11: Regarding the qualitative objective of CSR activities with respect to their

company, the response of the majority of 23% of respondents was to enhance

innovation potential and creativity, followed by 22% of respondents was

strengthening the corporate culture, 21% to enhance employee commitment, 16%

to enhance as internal and external communication tool, 10% internal and external

information provision, and 7% input on strategy formulation and assessment.

- Q 12: Concerning the quantitative objective of the CSR activities with respect to their

company, the majority of the respondents of 24% checked to increase productivity

efficiency, followed by 19% to increase resource efficiency, 17% to reduce

customers complaints, 12% to reduce accident, 10% to improve the energy balance,

9% to increase stakeholder engagement, 4% to reduce rejects, and 4% to increase

delivery reliability.

Implication for CSR strategy: CSR activity should target productivity and

resource efficiency

- Q 13: The majority of 81% of respondents said that their companies adopted and

implement a code of ethics or code of conduct, the remaining 19% negated this.


40/78


39| P a g e

Implication for CSR strategy: Workshop for benchmarking Code of Ethics or Code

of Conduct among Companies to learn from each other and to come up with

industry-wide guidance document.

- Q 14: The majority of 91% of interviewees said that their company has drawn up an

environmental friendliness policy and objectives, while 9% negated this.

Implication for CSR strategy:Rotating show-case events forbenchmarking

environmental friendliness policies and objectives to learn from each other and to

spread best practices.

- Q 15: The majority of 97% of interviewees said that their reporting system already

encompasses environmental and/or social and/or sustainability indicators, the

remaining 3% negated this.

Implication for CSR strategy: Workshop forbenchmarking environmental and/or

to learn from each other and to come up with industry-wide guidance document.

- Q 16: The majority of 33% of interviewees adhere to ISO 9001 standards in the field

of environmental, social and human rights, followed by 27% who adhere to theOSHAS 18001, followed by 22% who are ISO 14001 certified, 4% adhere to the UN

Global compact, another 4% to the universal declaration of human rights, 3% follow

ISO 26000, another 3% GRI, and the remaining 1% follow the OECD guidelines.

Implication for CSR strategy: Awareness event for other standards related to

CSR, sustainability and agriculture other than ISO 9001, OHSAS 18001 and ISO

14001. Furthermore, assistance of implementation of other standards is needed.

- Q 17: About the social dimension in the CSR activities of the respective company,

13% chose health and safety, 12% employee loyalty and motivation, 11% labor

rights, 10% training and education, 8% diversity and equality, another 8% awareness

raising and policy management, 7% employee self-fulfillment and vitality, another

7% cultural rights, 6% research and development, another 6% communication and

reporting activities, 5% community management and another 5% charity

management, and the last 3% chose governance and compliance.


41/78


41| P a g e

Implication for CSR strategy: Concerning social dimension for related training

events health and safety has been prioritized, followed by employee loyalty

and motivation and labor rights

- Q 18: About the economic dimension in the CSR activities of the respective

company, 14% chose product portfolio, 13% customer responsibility and

relationship, 12% marketing and brand management, another 12% formulation of

corporate vision, mission and values, 10% innovation management, another 10%

economic value distribution, 9% partner and supply chain management, another 9%

business expansion and investor attraction, then 6% organizational process

management, and the last 4% chose enhancement of corporate governance.

Implication for CSR strategy:Concerning economic dimension for related training

events product portfolio has been prioritized, followed by customer

responsibility and relationship and marketing and brand management

- Q 19: About the environmental dimension in the CSR activities of the respective

company, 19% chose energy management, 15% soil management, 14% plants and

animal management, 12% water management, 11% waste and hazardous materials

management, 10% communication and reporting of environmental performance,another 10% chose the establishment / support for an environmental management

system, and the last 9% chose management of greenhouse gas emissions and

mitigation of climate change.

Implication for CSR strategy:Concerning environmental dimension for related

training events product portfolio has been prioritized, followed by customer

responsibility and relationship and marketing and brand management

- Q 20: Regarding the issue of whether the respective company has interest in joining

a National CSR Network, 56% checked that it is very much interested, 44% chose

perhaps, and no respondents ticked no.

Implication for CSR strategy:Huge interest in National CSR network.

- Q21: Regarding the question of what the respondent expects from joining a National

CSR Network in terms of benefits, 16% chose sharing experience and case studies,

another 16% anticipate CSR assessment and consultancy to develop CSR strategy,


42/78


4| P a g e

15% chose training workshops, 14% cooperation among organizations and another

14% anticipate CSR certifications, 9% ticked information on CSR, another 9% on

starting coordinated industry initiative on CSR, and the remaining 6% chose

management tool.

Implication for CSR strategy: Focus CSR activities on:

1. Sharing experience and case studies

2. CSR assessment and consultancy to develop CSR strategy

3. Chose training workshops

- Q 22: Regarding the question of how and whether the interviewee expects CSR to

pay back, 45% believe by both decreasing production cost and adding value, 26%

think by improving company image in general, 13% ticked by adding value to

products, 6% think by decreasing production cost per unit, and only 10% dont

expect CSR efforts to pay back.

- Q23: Regarding whether companies should align their business model to the needs

of the society in order to stay competitive, 55% of the interviewees fully, 38% partly

agreed, 3.5% did not agree, the last and 3.5% did not know. Regarding the

statement that CSR and the concept of corporate sustainable development are thesame, 28% indicated they did not know, about 38% partly agreed to that statement

and another 35% agreed fully. The statement that a company that serves the need

of society does not need CSR was refused by 44.5% of respondents, 17.4% did not

have an opinion, 9% partly agreed, and about 31% fully agreed to this statement.

- Q24: By mistake the same as Q23

- Q 25: The question of the biggest challenges for the respective company in the

coming 5 years, the majority of the respondents of 26% checked raising raw material

and other input costs, followed by 25% who think it will be stronger competition on

the market, 21% who think it will be finding qualified employees, 20% raising energy

costs, 4% think its decreasing demand, and only 3% think that the biggest challenge

in the next 5 years will be stronger social and environmental laws and regulations.

Implication for CSR strategy:In order to solve biggest company challenges with

CSR activities the focus should lie on:


43/78


42| P a g e

1. Reduce raw material and other input cost

2. Distinguish Company from (international) competitor

- Q 26: To the question of what the biggest current challenge is that Egypt is facing,

the majority of 27% chose energy scarcity as the currently biggest challenges for

Egypt, followed by 21% who chose high unemployment, 19% who think its education

quality, 17% water scarcity, and the remaining 15% food scarcity.

Implication for CSR strategy:In order to solve biggest challenges from Egypt with

CSR activities the focus should lie on:

1. Energy scarcity

2. High Unemployment

- Q27: To the statement that various organic agricultural methods contribute to the

high carbon sequestration rate of soils and to minimized emissions, the majority of

39% fully agreed, 32% did not know, and 29% partly agreed. To the statement of

whether Organic Agriculture makes farms and people more resilient to climate

change, due to its water efficiency, resilience to extreme weather events and lower

risk of complete crop failure, 50% fully agreed, 20% did not know, and 20% partly

agreed whereas 10% did not agree. To the statement that Organic Agriculture buildsup soil instead of fostering land degradation and therefore contributes to global

Food security, 63% of the respondents fully agreed, 22% partly agreed, and 16% did

not know. The last statement that Organic Agriculture is in the long run more

competitive than conventional agriculture, was fully agreed to by 62% of

respondents, while 15% partly agreed, 15% did not know, and the final 9%

disagreed.

Implication for CSR strategy:Consider Organic agriculture as a strategic mean to

solve societal burning issues and to contribute to companys

futurecompetitiveness.


44/78


43| P a g e

PART FOUR: CSR STRATEGY FORMULATION and IMPLEMENTATION

TOOL

Architecture: Vision&Mission of the CSR Strategy

The following description came out of the different focus group workshops and is a basis for

further development and discussions.

Figure 4: Strategic Elements of Strategic CSR in the Agro-Food Industry

Vision

Our business:

Advances the regeneration and sustainable development of the earth through the

human

Impels and empowers people to unfold their individual potential and develop their

consciousness

Produces high-quality wholesome food and other agricultural products, that nourish

body, soul and spirit

Fosters people to live and work together in dignity and mutual respect and tolerance


45/78


44| P a g e

Mission

In order to achieve our vision, we want to

ensure for sustainable soil enlivenment and fertility

counteract the tendency of the degradation of the earth and advocate the

regeneration of destroyed natural habitat of animals and plants

do problem-oriented and transdisciplinary work and research in order to find social

and technological innovations that solve our challenges

embrace traditional, organic, spiritual and alternative cultivation methods and

beyond that be in open dialogue with modern and conventional forms of agriculture

in order to learn from each other

advocate and support costumer education and awareness-raising and create

customer responsibility

provide farmers with schooling and capacity building in order to improve the quality

of work

continuously work and develop our vision, mission and principles together with all

relevant stakeholders

stop the unsustainable use of resources in production as well as consumption

create and foster cooperation and partnerships along the whole value chain,

supporting industries and the civil society

apply technology consciously only when it serves our goals and does not harm the

living

support members of our movement to open up new markets

develop and nurse individual communities that conduct agriculture embedded in

their specific context

advocate and do political consulting for the creation of parameters that encourage

sustainable development (currently especially the establishment of a price structure

which is based on the true costs of production)

formulate standards and guidelines in order to develop a trustworthy label that is

certified and protected


46/78


45| P a g e

The Sustainability Flower: A Strategic Framework For Sustainable

Development

The Sustainability Flower represents a management, assessment and communication tool

symbolizing the concept of sustainable development in its four dimensions. In the dimension

ECONOMIC LIFE, an organization reflects what kind of products it sells and in which way it

distributes values along the value chain. In SOCIETAL LIFE, the protection and regulation of

human rights is in the focus. CULTURAL LIFE concentrates on the question of how to support

the development of the individual. These three areas of society are surrounded by the six

sub- dimensions of ECOLOGY: SOIL, PLANTS, ANIMALS, ENERGY, AIR, and WATER; to

understand the positive and negative impact on the environment.

Figure 5: The Sustainability Flower Framework

Each dimension consists of several performance aspects, defined in detail through

performance indicators. These are, wherever possible and applicable, linked on theinternational standard for sustainability reporting, the GRI G3.1 of the Global Reporting

Initiative or the ISO 26000 guideline and are also conform with the Global Compact

principles.

The SF framework is applicable for all stakeholders of the food chain who ever want to learn

more about the aspects of being not only sustainable but resilient in a holistic approach,

such as

Farmers

Processors


47/78


46| P a g e

Traders

Retailers

The SF supports companies in:

Understanding all important development processes, setting targets and taking

action accordingly,

Making development transparent for all stakeholders (clients, employees,

customers, investors, business partners, media etc.),

Giving a platform to disclose companys self-concept as a responsible company and,

thus, make it possible that the company serves as a role model for other

organizations that aim at sustainable development,

If applied as a shared assessment tool within a common CSR initiative in the AFI, the SF

would:

Guide the CSR partner companies to develop a shared understanding of sustainable

development

Provide a framework for common action and measurement that can be continuously

developed,

Allow for benchmark to identify best practice among companies and allow for

targeted learning

Allow for effective marketing with the SF as a differentiation tool

For the annual evaluation process, strategic, tangible targets aligned with an organizations

vision, mission and policies need to be formulated. The continuously ongoing data collection

on economic, social, cultural and ecological performance results in a Sustainable

Figure 6: Sustainable Development Management Cycle


48/78


47| P a g e

Figure 7: Sustainability Flower Balanced Scorecard System

Info: This SBSC is an example applied by Sekem

In order to assess its overall performance of continuous sustainable development and

regeneration, the Sustainable Development Balance Score Card (SBSC) can be used.

Basically, the evaluation steps are represented in the traffic light colors green stands for

excellence, red for no action or negative impact and yellow means that awareness exists and

actions have been taken, but that there is room for improvement. Each aspect has its own

logic:


49/78


48| P a g e

Table 6: Sustainable Development Balance Score Card - Evaluation Methodology


50/78


49| P a g e


51/78


51| P a g e


52/78


5| P a g e

PART FIVE: ACTION PLAN FOR CSR STRATEGY IMPLEMENTATION

1. Awareness RaisingAwareness raising events regarding CSR are to be held before the end of 2013. Specific

topics that should be covered include "systemic interrelations of food security challenges" as

well as "integrated sustainability reporting", including concepts like ISO 26000, GRI, other

frameworks used in the industry such as the Sustainability Flower framework.

An external expert will help to organize and design at least two events covering the

mentioned topics.

2. Capacity Building EventsThree capacity building events will be held before the end of 2013. Based on the industry's

interests assessed in a survey, the training sessions should cover three dimensions and

specific topics related to them:

Training 1: Social Dimension

In the social dimension of CSR:

o Priority A: health and safety: Labor conditions, H&S management, health

services to the community, etc.

o Priority B: employee loyalty and motivation: employee fluctuation, intrinsic

and extrinsic employees motivation mechanisms, etc.

o Priority C: labor rights: social workers, compliance with ILO and UN Global

Compact requirements, Fairtrade schemes, etc.

Training 2: Economic Dimension

In the economic dimension:

o Priority A: product portfolio: eco- and socio-friendliness of product portfolio

proven by labels and certificates, etc.

o Priority B: customer responsibility and relationship: customer relationship

management, consumer research, distribution channels, etc.

o Priority C: marketing and brand management (focus on CSR)

Training 3: Environmental Dimension

In the environmental dimension:

studies_agri food industry

Documents