Sustainable Banking: Changing Face of Corporate Social Responsibility

Abstract

The major emphasis of banking players is placed on financial governance, financial soundness, financial discipline and corporate governance. The banking sector players are unable to cope with macro economic, social and ecological challenges. Banking players are now indulging themselves in corporate sustainability practices. Sustainable banking provides a new dimension in the financial sector. A United Nations (UN) initiative, the “Global Compact”, was launched in 2000 to bring companies together with UN agencies, labour, and civil society to support ten principles in the areas of human rights, labour and the environment, and anti-corruption. The Equator Principles were developed by private banks, with the support of the International Finance Corporation and the World Bank, as a “voluntary code”. They constitute a set of guidelines which banks can sign up to voluntarily, but which then prescribe certain requirements to be followed with regard to consideration of environmental and social issues in their project financing. The National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business released by the Ministry of Corporate Affairs, Government of India in July 2011.The objectives of the research work are to study the evolution of global sustainable banking and to analyse the business responsibility practices of selected Indian banks. One public Sector Undertaking bank, Bank of Baroda and another private sector bank, Axis bank are considered for the study. The research paper has taken into consideration the secondary data available in several research articles published in the different reputed national and international journals downloaded from EBSCO host and Emerald. Apart from these, different knowledge reports available in the public domain are also considered as the source of key information inputs. The proposed research work will provide a new dimension in the literature of sustainable banking.