Corruption in least developed countries and ESG (responsible) investment: Standard Chartered Bank in Nepal

Abstract

PurposeThis study aims to explore the effects of responsible international investment in a least developed country (LDC) on ethics and corruption in the local industry. While investment growth in least developed countries (LDCs) is essential to meet the United Nations Sustainable Development Goals, international investment in LDCs poses challenges, including corruption. The authors explore perspectives from relevant stakeholders on the influence, if any, on an LDC’s banking sector, of investment in the LDC by a multinational bank with an environmental, social and governance focus – using a case study of Standard Chartered Bank (SCB) in Nepal.Design/methodology/approachThe authors conducted thematic analysis on: focus groups with current and former SCB Nepal management; semi-structured interviews with Nepal banking regulator representatives; senior staff from SCB global divisions; and management of other commercial banks in Nepal.FindingsKnowledge transfer, organisational enablers and constructive international competition contributed to the dissemination of best practices within the Nepal banking sector, supporting the notion of beneficial spill-over effects of multinationals on LDC host countries.Practical implicationsPractical insights will aid LDC governments, international businesses, investment funds and donor organisations seeking to invest in/assist LDCs with economic development.Originality/valueTo the best of the authors’ knowledge, this may be the first case study on ethics and anti-corruption practices of a multinational bank in a LDC. Through a practice-driven focus, the authors provide “on-the-ground” insights to better understand the complex nature of corruption.