**4.1. Saudi Arabia**

Companies in Saudi Arabia have been following a religious tradition of *Zakat* which is charitable giving that requires companies and individuals to give an annual endowment of 2.5% of their annual income or revenue [29]. This longstanding socially responsible tradition has transformed through business development to an obligatory institutional *Zakat* tax, commonly labeled by corporations as a CSR activity in recent years [29]. Therefore, CSR articulation has only come up in recent years in Saudi Arabia; initially there was a general traditional obligation on ethical business activities [14]. A study by CSR consultants in Saudi Arabia found that businesses are starting to leverage the benefits of CSR beyond merely charitable activities; focusing on a broader CSR scope involving employees, communities, and the environment [18].

## **4.2. United Arab Emirates**

sector. However, the state legal framework and enforcement is weak; there are no CG laws put in place and company regulations lack any reference to stakeholder's rights [28]. Due to its legal context, it is up to the firm to participate in socially responsible activities such as human and labor rights. A study on CG practices in businesses in Kuwait suggests the low level of development in that field with a salient lack of accountability, disclosure, shareholders' and stakeholders' rights. While some companies studied had assigned a board committee, others do not even have a selected board committee to look over governance issues [28]. There is no legal framework for social responsibility issues; however, some large sized companies exhibit some kind of participation in CSR practices [28]. This would be more organized and enhanced with well-structured legal regulations for accountability, CG, and social responsibility. Moreover, setting down regulations will be in line with the government's current privatization plan as proper CG laws with clear reference to the rights of shareholders and

*GGC governments are playing an integral role in putting the basic infrastructure and groundwork for securing a path towards a sustainable future in the region. Some GCC countries are trying to enhance and monitor CSR practices by diversifying national economy and supporting the private sector and civil societies, by launching philanthropic programs to aid sustainable development and reducing poverty and by establishing international networks to help other low-income countries. However, not all governments are as much involved, some are still lacking laws that enforce CSR practices and legal* 

Normative and institutional pressures resulting from belief systems have a great impact on CSR practices in the GCC [17]; Islamic teachings salient in the region, view social responsibility as an obligation to business activity [18], namely through the *Zakat* obligatory tax to be given to the poor on an annual basis, and a general requirement by Islam to enhance social welfare and preserve environmental ecosystems [29]. However, these traditional efforts fall short of the global CSR standard, as they are usually private, fragmented, lack accountability and a clear strategy to maximize effectiveness of business philanthropic efforts [21]. This section will discuss the religion-CSR logics and draw recommendations on the best course of

Companies in Saudi Arabia have been following a religious tradition of *Zakat* which is charitable giving that requires companies and individuals to give an annual endowment of 2.5% of their annual income or revenue [29]. This longstanding socially responsible tradition has transformed through business development to an obligatory institutional *Zakat* tax, commonly labeled by corporations as a CSR activity in recent years [29]. Therefore, CSR articulation has only come up in recent years in Saudi Arabia; initially there was a general traditional obligation on ethical business activities [14]. A study by CSR consultants in Saudi Arabia found that businesses are starting to leverage the benefits of CSR beyond merely charitable activities; focusing

on a broader CSR scope involving employees, communities, and the environment [18].

action for sustaining traditions while moving towards sustainable development.

stakeholders would encourage investment and economy diversification.

**4. GCC religion-CSR logics: philanthropic or strategic?**

*regulations for accountability.*

132 Globalization

**4.1. Saudi Arabia**

Philanthropy has always been practiced in UAE through *Zakat*. This has also been institutionalized and organizations are usually compliant with religious doctrines and practices. Due to the prevalent endowment behavior, organizations believe in their responsibilities towards society, apart from their shareholders [20]. The religious practices are not centralized and approached merely in an informal and unorganized manner. Unlike Saudi Arabia, a *Zakat* tax is not enforced or collected by the state. However, some have argued against the effectiveness of a centralized *Zakat* collection practice; such system does little to better the living standards of the needy [20]. CSR is very different from *Zakat* although philanthropy is included as one of the secondary pillars of CSR practice. *Zakat* has a spiritual end whereas CSR ought to be targeted towards social equality and sustainable development. CSR also includes concepts of preservation of resources, sustainable practices, and involving stakeholders in business operations and strategies [21].
