UAE companies will have to allocate funds and be involved in social responsibility initiatives by end of 2017, a top official said.
To implement the Year of Giving strategy, the Ministry of Economy launched 11 initiatives on Monday to create workplaces that take up philanthropy as part of its core values and helped the government keep a database and monitor the companies' compliance to philanthropy.
The ministry, which will implement its initiatives starting 2018, is currently working with different economic departments and the chamber of commerce to make the required modifications in current policies and laws to make Corporate Social Responsibility compulsory for UAE companies.
Sultan Bin Saeed Al Mansouri, Minister of Economy, said: 'Ever since the country declared 2017 as the Year of Giving, national efforts have started to contribute to the development of an integrated framework that will spread the culture of giving across the country.'
Therefore, by the end of the year, CSR will be mandatory to execute among 400,000 companies across the country, aiming to dedicate at least Dh500 million in cash or in-kind philanthropic work from companies.
Mohammed Ahmed bin Abdelaziz Al Shehhi, Undersecretary of the Ministry, said, 'Auditors will be required to present financial statements to verify CSR involvement.' He noted the audit declaration will be a requirement for their business license renewal.
However, the percentage of funds that companies will be required to allocate to CSR initiatives, whether monetary or in-kind, is yet to be announced.
"The percentage is under discussion and will be announced when new legislations are out," Al Shehhi said on the sidelines of the ministry's first annual Corporate Social Responsibility event held in line with Zayed Humanitarian Work Day.
An award system will be introduced to give financial privileges and exemptions for outstanding companies in the area of social responsibility.
"Financial privileges include partial exemption from bank guarantee for workers, corresponding to the value of the community contribution. Outstanding companies will also be given a priority in government contracts," said Al Shehhi.
CSR is one of the six pillars of the Year of Giving strategies announced to endorse the culture of giving among society members.
Al Shehhi noted that companies will be required to register in the smart platform www.csruae.ae that includes areas companies can contribute in depending on society's needs priorities. The electronic platform will also provide guides, examples and models on how to implement CSR, while also sharing success stories of companies.
The ministry also announced implementing the CSR Index that lists the ranking of entities in the country based on the percentage of their contributions to community responsibility projects.
Al Shehhi added that companies will start registering in July, and the evaluation process and results of the first annual report will be in June 2018 in line with Zayed Humanitarian Work Day. Workshops will be held to identify relevant stakeholders in the importance of community responsibility.
A "social responsibility passport" will also be given to the top five best performing companies in the field, based on the company's vision, its community strategy and the extent of innovation in its community programs. The passport will grant special privileges with local and federal government agencies.
An annual "social responsibility label" will be a sign used to promote companies that will reflect the extent of their contributions to community development and philanthropic work.
Al Shehhi said all these initiatives will come into action by 2018. "We cannot start giving the labels and passports except when we have new policies and legislations," he noted.
The initiatives aim to raise awareness and support the interaction of the private sector with economic, social and environmental development challenges, while encouraging them to support various community projects in the country.
Some of the ministry's 11 initiatives for the Year of Giving
- "Smart Platform" that will guide companies on CSR initiatives need in the country.
- "National Corporate Social Responsibility Index" that will list the ranking of companies involved in philanthropy.
- "Social Responsibility Passport" will be granted to top five performing companies in social responsibility that will give them priorities in federal and government projects.
- "Social Responsibility Label" that will hep market companies and reflect their extent of contributions to community responsible projects.
- Companies will be asked for mandatory declaration of their corporate social responsibility.
- Financial privileges will be granted to companies with high social responsibility contributions.
- A social responsibility committee will be formed to oversee the process.