Patrick Chalhoub is the Middle East North Africa regional honoree for the 2021 YPO Global Impact Award. The award focuses on YPO members making impact outside the organization that is both sustainable and scalable, affecting people, prosperity, peace or our planet.
While Chalhoub Group is synonymous with a luxury lifestyle in the Middle East, its Group President Patrick Chalhoub is quietly creating a benchmark for how companies in the region can do business responsibly. For more than a decade, he has led his company’s sustainability strategy to advance broader societal goals across a region strife with poverty and suffering. As a board member of the UN Global Compact and an active participant in various industry associations and forums, Chalhoub is also taking action globally to accelerate the adoption of universal sustainability principles.
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Syrian-born Chalhoub began his career in 1979 following his father’s vision to build a bridge between East and West and become the ambassador of the luxury lifestyle in the Middle East. He has since created a business success story, moving the company from a traditional distribution model to a retail network of more than 650 luxury stores and a workforce of 12,000 spread across 9 countries. But it was not all smooth sailing. On many occasions, the business had to be rebuilt because of the economic and geopolitical turbulence in the Middle East while adapting to the sector’s fast-paced digital transformation and shifting market trends.
The beginning of Chalhoub Impact
Created in 2009 by Patrick and his brother Anthony, Chalhoub Impact focuses on giving back to the community and engaging the team toward a common purpose. “From the start, we were not looking to publicize Chalhoub Impact or use it as a marketing tool. Instead, we wanted to keep it low-profile,” says Chalhoub.
Leveraging the team’s business skills, Chalhoub Impact focused on building a clear strategic framework to organize the different initiatives and help create measurable and meaningful results. “We put the human and financial means at our disposal to create a strategy for giving back to the community, focusing on areas where we could add the most value and make the most difference,” he adds. “The priority was for results-oriented initiatives in the region in which we operate in, initiatives that offer development and stability for the long term.”
Creating meaningful change
Today, the key pillars for Chalhoub Impact are: education, including supporting primary and university students as well as entrepreneurs through incubators and accelerators; environment, with various initiatives to reduce carbon footprint across the company’s operations and supply chain; and meeting the ongoing humanitarian crisis found in many parts of the region. A recent humanitarian program is the Lebanon Relief program, where USD1.2 million was donated to carefully selected nongovernmental organizations (NGOs) to support the population after the August 2020 explosion. Over the past 10 years since the introduction of sustainability measurements, the number of people positively impacted has reached 176,355, with 25,889 volunteers participating in 720 initiatives. (Chalhoub Sustainability Report 2019)
Throughout these initiatives, Chalhoub has taken a hands-on approach, visiting sites and personally meeting beneficiaries. He is particularly proud of a school in Lebanon where nearly 21,000 Syrian refugee children got a chance to receive an education. “Our involvement in Jusoor Literacy Center goes beyond just funding,” Chalhoub says. “Our team has put a lot of effort and time into this project, including being involved in trying to convince the parents to send their children to school rather than them earning money.”
Ongoing education initiatives also include more than 10 partnerships with universities in the region and Europe, including sponsoring scholarships and educational exchange programs. Chalhoub is particularly proud of the partnership he helped create with French university Science Po (The Paris Institute of Political Studies), a leading global research institute.
“Each year, we have 150 students attend Science Po university in a branch that has been set up in Menton, south of France. They not only study sociology, politics and economics as part of the Science Po curriculum, but also about French language and culture. Arab students mix with hundreds of French and European students who are also learning the Arab language and Middle Eastern culture,” says Chalhoub.
The program also follows some of the students’ career journeys and several graduates join the Chalhoub Group. “While the numbers may not be large, the individual success stories have been fantastic. I try to personally take the time to meet the graduates at least once a year and encourage them to continue the commitment of giving back to their communities.”
Challenges, but not obstacles
Looking back at the sustainability journey, Chalhoub says that while work has been gratifying for him and has generated a sense of purpose for the business as a whole, there were some challenges in scaling and streamlining the different initiatives. “I would not call them obstacles, but challenges which, even if difficult, can be overcome.”
— Patrick Chalhoub, Group President, Chalhoub Group share
One of the first challenges was defining a clear strategy. “There are heart-breaking stories across the region. We receive a constant solicitation, and we have had to learn to say ‘no’ to many good causes to remain focused. Otherwise, it will be a distribution of money, a dispersion of effort,” says Chalhoub. “But as in business, having a strategy in place has helped us make choices and has allowed us to use ambassadors or leaders across the region to scale and create a movement. We have leveraged the team’s business skills to be able to do our impact work in a disciplined, rigorous manner — not only from the emotional point of view but with objectivity.”
The second challenge early in the journey was how to engage the teams, “making the programs not only about financial support or being part of the discussion but also about engagement,” he says. Last year, 5,000 out of 12,000 employees actively participated in these programs, and more are planning to join this year. “We can’t force people to engage, but the initiatives have become an integral part of our corporate culture and help us create a sense of purpose.”
Another challenge was the lack of general public awareness, especially in addressing the need for environmental protection, in many communities. “In some instances, we had to fight with local governments to get permission to collect garbage. But things are changing. Especially in the last three years in the GCC (Gulf Cooperation Council), there has been a tremendous shift in attitude toward the environment as well as labor issues,” says Chalhoub. “The movement should also come from different stakeholders, including the people, in addition to business leaders and governments. So, I am optimistic that the region, especially the young generation, is becoming more aware of these issues.”
Why organizations, large and small, need to take action
For Chalhoub, any company, whatever the size or industry, can positively impact its community. “We want to share our journey to encourage, inspire and support CEOs to do the same and follow their journey to create a positive impact.” He cites the following rewards of business integrating sustainability in a symbiotic relationship.
- Creating more empathy for you and your team: “Sustainable companies help leaders and their teams become humbler, creating a mindset of empathy and humility,” says Chalhoub. He cites that it is beneficial to stay attuned to the real world in the luxury sector. “This work reminds us to keep our feet on the ground. Even if we sell dreams and luxury, we are all human, part of a global community. We need to move forward together instead of having a polarization of wealth and no consideration for the real world.”
- Developing a sense of purpose, especially useful in tough times: From the start, the team’s engagement has been a critical priority for Chalhoub Impact. “One, because a lot of those initiatives need a workforce, so it makes a lot of sense not only to provide financial support but talent. But equally important, it creates human bonding and a sense of common purpose,” says Chalhoub. He cites how the solid corporate culture and identification with shared principles and values helped keep everyone together and motivated during the lockdown.
- Answering consumers’ demands: From the Group’s long collaboration with global partners and suppliers, Chalhoub has witnessed the growing importance of sustainable practices to meet expectations from consumers, including millennials, globally and increasingly in the region. “In addition to the global compact business commitments, we are facing demand for sustainably made products from our consumers,” says Chalhoub, citing that business leaders in other sectors are facing similar pressure from their consumers.
- We owe it to the next generation: He adds that businesses’ collective action is a shared responsibility. “Our generation has exploited the planet, and I am part of that generation. We owe it to our children and our grandchildren to help transform the world through business with other stakeholders. Every one of us has a role to play.”
- It feels good: “While we need to make sure that the work is creating measurable results for the community first, these initiatives also impact us as individuals and change our attitudes toward life,” says Chalhoub, adding that often this is even more relevant in smaller organizations. He cites his experience supporting entrepreneurs scaling their business. “Often, they spend all their time on their direct core business, but they eventually find out that something is missing. And part of what is missing is the giving back element.”
Looking at the future of his company’s sustainability journey, Chalhoub says the company will continue to align its strategy with local and international frameworks — including the United Nations Sustainable Development Goals (UNSDGs) and the United Nations Women’s Empowerment Principles (WEPs). “We have big projects — including a project called School in the Cloud, currently in its pilot stage with Dubai Cares and Queen Rania Foundation around the education of thousands of displaced children in refugee camps. So, the ambition is much wider and much bigger than we have accomplished so far.”
As for his personal ambition, Chalhoub is looking forward to spending more time on the projects that create positive change through Chalhoub Impact or other vehicles, helping eradicate poverty and suffering in the Middle East. “I’m at an age where I have to start planning the next stage in life. A greater level of personal commitment towards creating impact is definitely part of the plan.”
