Corporate Social Responsibility in Banks

Corporate Social Responsibility

Introduction

Corporate Social Responsibility has become an increasingly important part of the corporate body and it calls for corporations to conduct their activities in a socially responsible manner. There has been a major increase in the interest and expectations of a lot of stakeholders:investors, employees, consumers, governments, and communities, and as a result, businesses are assuming the frontline position, ensuring their continued support of and commitment to the needs of the community and the environment. The concept of CSR is becoming increasingly important nowadays because the business’s role in society is becoming much more important than it was before. The social and environmental concerns about how businesses do business and how they affect the community and environment in which they conduct their business are not new.Recently, and in order for businesses to achieve and maintain competitive advantage, they not only care about the bottom line and their economic and financial obligations, but also care about achieving their goals while being socially responsible, especially towards the environment in which they operate.Some businesses have gone as far as promoting their CSR program in order to improve their business image.

What is CSR?

To offer a straightforward definition of CSR like Ozpehlivan (2010) has is

rather difficult. There is, however, a major accordance that the corporate sector has a social role to play in order to secure its future in the global market. By default, CSR encompasses all the responsibilities and social obligations that businesses have to have towards the societies and environments within which they conduct their business. The Institute of Directors, UK (2002) states that CSR is about “businesses and other organizations going beyond the legal obligations in order to manage the impact they have on the environment and society at large”. CSR was originally developed in the 60s in the USA with the idea that businesses have responsibilities that go beyond their legal obligations. Enderle and Tavis (1998) define CSR as “the policy and practice of a corporation’s social involvement over and beyond its legal obligations for the benefit of the society at large”. According to the definition by Angelidis and Ibrahim (1993) , CSR is “corporate social actions whose purpose is to satisfy social needs”.

Over the years, and as the society kept on changing and evolving, so did both the concept and the practice of CSR in order to reflect all the new challenges. Businesses consider their social contributions today as investments with the intentions to benefit the company as well as the society and environment (Schwartz, 1996) . It is agreed that CSR is concerned with being committed to the society’s welfare.