Corporate Social Responsibility Disclosure by Islamic Banks in GCC Region

Abstract

This paper aimed to assess the level of CSR disclosure of Islamic banks in the GCC region against a backdrop of Islamic finance principles and Islamic moral economy, using content analysis to create the CSR disclosure index. As well, it employs the qualitative research approach, which is followed by measurement and the interpretation of the qualitative conclusions. This paper used the content analysis approach to examine data from annual reports a total of twenty-eight Islamic banks, analysing 334 annual reports from 2006 to 2019. Furthermore, Bahrain Islamic banks took first place, while Saudi Islamic banks earned the lowest rate in the region. However, when compared to previous studies, the level of CSR disclosure shows a slight improvement. Despite this, the data reveals that CSR disclosure remains low, at 55%. Commitment to debtors placed best in a cross-sectional analysis of CSR disclosure dimensions, with an overall value of 0.69. For Zakat, charity, and beneficent loans, the minimum score is (0.36). Several reports from the tested Islamic banks were found to be lacking CSR disclosure information, according to these findings. This research adds to the body of knowledge and will be valuable to policymakers, government entities, and regulators who may want to encourage Islamic banks to issue and determine a basic index for CSR disclosure policies in their annual reports and websites. In addition, future research may examine survey methodologies that include more in-depth interviews with administration and important stakeholder, which could improve the CSR disclosure degree of understanding in Islamic banking.