Corporate Social Responsibility Of Banks Research Articles

An analysis of Indian banks' CSR initiatives

A corporation or organization can simply increase their goodwill in the marketplace by engaging in corporate social responsibility (CSR) activities. Upholding moral principles and benefiting society are the overarching goals of corporate social responsibility. CSR takes into account both internal and external elements in addition to the value for their customers. Businesses gain by contributing significantly to corporate social responsibility (CSR) in a number of ways, including enhanced funding availability, new opportunities, employee retention, stakeholder satisfaction, and brand image. As globalization accelerates, banks are becoming increasingly engaged in corporate social responsibility initiatives to broaden their clientele. The corporate social responsibility (CSR) programme of the Indian banking sector focuses on projects like health and medical care, rural area development, and poverty eradication. It also aims to address financial inclusion, provide financial services to support national investment, and promote the socio-economic development of the country. The Bank's corporate social responsibility endeavours are predominantly centred around environmental sustainability, Swachh Bharat Abhiyan, and educational initiatives such as Beti Bachao Beti Padhao Abhiyan, among numerous other projects. This study's goal is to evaluate the CSR programs that the banking sector has implemented. The bank's CSR report is the source of the data.

The impact of risk disclosure on the corporate social responsibility of banks

This paper’s objective is to examine how Jordanian banks exposing risks affects their corporate social responsibility (CSR) (Pham & Tran, 2020; Abu Qa’dan & Suwaidan, 2019). The primary purpose of the study is to evaluate how risk disclosure and CSR are related in Jordan’s banking industry. For this investigation, information was gathered from 23 Jordanian banks that are listed on the Amman Stock Exchange (ASE) throughout a ten-year period, from 2010 to 2019. CSR was utilized as the dependent variable in a regression model that included four independent variables to represent the risk disclosure. The investigation included measures to guarantee that the outcomes were unaffected by the age of each bank, its size, leverage, and return on equity (ROE). The study’s results indicate that there was a positive correlation between the independent variables and CSR. This implies that risk disclosure is a useful strategy for enhancing CSR in the banking sector. The results of this study have significant applications for policymakers, future scholars, and bank managers. In order to comprehend the connection between risk disclosure and CSR in different nations and within various industries, the study further emphasizes the significance of further research in this area.

Implementation of Corporate Social Responsibility (CSR) In Improving The Reputation of Islamic Banking: A Perspective of Shariah Enterprise Theory

This study underscores the importance of Corporate Social Responsibility (CSR) in the context of Islamic banking, which considers economic, moral, and ethical aspects in accordance with Islamic principles. Despite being the main focus of companies around the world, the concrete impact of CSR implementation in a sharia perspective on corporate reputation still needs to be better understood. This study uses the literature review method, by collecting and analyzing 13 journals from various sources of information related to the form of CSR in Islamic banks in the SET perspective. The results show that Islamic banks that implement CSR based on Shariah Enterprise Theory (SET) can improve their corporate reputation. By complying with the sharia principles in the SET concept, Islamic banks are able to build a positive image in the eyes of customers, investors, and the community, as well as create a favorable environment, and increase stakeholder trust. This study has an important contribution in illustrating the importance of CSR disclosure in the SET perspective to enhance the reputation of Islamic banks and promote sustainability in the Islamic banking industry.

Exploring the role of analysts in identifying and communicating the value of bank CSR activity

PurposeIn this study, the authors investigate if analysts, as knowledgeable information intermediaries, can correctly identify bank corporate social responsibility (CSR) activities and can reliably transmit that information to investors. Hence, the authors specifically explore if analysts perceive and behave differentially in the presence of genuine bank CSR activities (strengths). The authors also analyze if financial markets differentially assess bank CSR strengths. The authors further explore the viability of focusing on analyst and financial markets to validate genuine bank CSR strengths.Design/methodology/approachThe authors use COMPUSTAT and CRSP for firm and financial data, I/B/E/S for analyst reporting data and MCSI Research KLD for CSR data. The sample consists of 329 distinct banks and 2,525 bank-year observations from 2003 to 2016. The primary CSR score is the total number of CSR strengths less the total number of CSR concerns, across six of the seven dimensions for each firm in each year of the sample (Adjusted CSR Score). In addition, the authors estimate all the analyses with dis-aggregated measures of total CSR strengths and total CSR concerns (Adjusted Total Strength Score).FindingsThe authors find that analysts correctly distinguish and construe bank CSR strengths from CSR concerns. Specifically, bank CSR strengths increase analyst following and forecast accuracy, while decreasing analyst forecast dispersion. The authors further find that bank CSR strengths increase bank market returns. These results are reversed for bank CSR concerns. Additionally, the authors demonstrate that this method using knowledgeable intermediaries can help validate bank CSR strengths.Research limitations/implicationsThe sample is limited to US banks and financial markets. The regulatory and information environment is likely to be different from global or emerging markets. However, since banks in many countries aspire to emulate the US banks, these results would be a precursor of banking sectors conditions in emerging markets. Additionally, the availability of data limits the sample to a period that ends in 2016. To the extent that the importance of ESG and CSR concerns has increased in the intervening time, the results may not accurately reflect the current state of the market.Practical implicationsThis investigation benefits researchers, customers, banking executives, regulators and activist groups. First, the authors show that in addition to customers, analysts and the financial markets appreciate bank CSR strengths. Second, despite sophisticated financial reporting by banks, analysts correctly distinguish and construe bank CSR strengths. Third, the authors demonstrate a method for bank marketing researchers to validate genuine bank CSR activity, as well as provide additional support for customer related bank CSR outcomes. Fourth, the findings highlight the importance for banks to have high-quality CSR reporting. This might be especially helpful to a bank rebuilding its reputation after a CSR failure. Finally, this investigation using US banks could serve as a precursor for future bank CSR research and help develop CSR reporting guidelines for banks in emerging economies.Social implicationsThis investigation benefits researchers, customers, banking executives, regulators and activist groups.Originality/valueThis investigation benefits researchers, customers, banking executives, regulators and activist groups. First, the authors show that in addition to customers, analysts and the financial market appreciates bank CSR strengths. Second, despite sophisticated financial reporting by banks, analysts correctly distinguish and construe bank CSR strengths. Third, the authors demonstrate a method for bank marketing researchers to validate genuine bank CSR activity, as well as provide additional support for customer related bank CSR outcomes. Fourth, the findings highlight the importance for banks to have high-quality CSR reporting. This might be especially helpful to a bank rebuilding its reputation after a CSR failure. Finally, this investigation using US banks could serve as a precursor for future bank CSR research and help develop CSR reporting guidelines for banks in emerging economies.

Psychology in action: Social media communication, CSR, and consumer behavior management in banking.

In today's digitally interconnected world, social media emerges as a powerful tool, offering different opportunities for modern businesses. Not only do organizations use social media for marketing purposes, but they also endeavor to influence consumer psychology and behavior. Although prior studies indicate social media's efficacy in disseminating corporate social responsibility (CSR) communications, there remains a dearth of research addressing the impact of CSR-related messaging from banks on consumers' brand advocacy behavior (CBAB). Our study seeks to bridge this gap, exploring the CSR-CBAB relationship within the banking sector of an emerging economy. Additionally, we investigate the roles of consumers' emotions and values in mediating and moderating their CBAB, introducing two mediating factors, consumer happiness (HP) and admiration (BRAD), and moderating variable altruistic values (ATVL). Data collection involved an adapted questionnaire targeting banking consumers. The structural analysis revealed a positive correlation between a bank's CSR-related social media communications and CBAB. HP and BRAD were identified as mediators in this relationship, while ATVL emerged as a moderator. These findings hold significant theoretical and practical implications. For instance, our research highlights the indispensable role of social media in effectively conveying CSR-related information to banking consumers, subsequently enhancing their advocacy intentions.

Analisis Penyaluran Dana CSR pada PT Bank Sumut

Companies that benefit from the business they run should not think about themselves, companies must also think about the community and the surrounding environment to provide a form of social responsibility or Corporate Social Responsibility (CSR). One of the regional owned enterprises (BUMD) of North Sumatra, namely: PT. Bank Sumut which holds a Corporate Social Responsibility program regularly every year with funds from CSR programs distributed to several sectors, such as the education, health, social and economic sectors. This research is qualitative in nature, to collect data and information obtained in this study is primary data collected from interviews at PT. Bank of North Sumatra, as well as secondary data collected from the annual report site at Bank of North Sumatra. Related data were analyzed using descriptive method. Data collection techniques were analyzed using interviews and questionnaires from the Head of CSR. The results showed that the process of channeling CSR funds for the Bank of North Sumatra was carried out by submitting CSR proposals which were funding in nature, namely funding for programs that had been submitted to the North Sumatra bank as programs that would be funded with CSR. government work forum teams as well as those directly submitted to the North Sumatra bank will then be analyzed and reviewed by the company. After the CSR funds are handed over to the beneficiaries, the program can be directly run in accordance with the activities that have been proposed in the previous work budget proposal and costs. And accountability reports by beneficiaries and re-verified by the North Sumatra Bank CSR team.
 Keywords: CSR (Corporate Social Responsibility), Bank of North Sumatra

CORPORATE GOVERNANCE AND CORPORATE SOCIAL RESPONSIBILITY IN ISLAMIC BANKS: A SYSTEMATIC LITERATURE REVIEW

The main objectives of this study are two-fold. First, this study aims to review the research development on corporate governance (CG) and corporate social responsibility (CSR) in Islamic banks. Second, this study aims to identify the impact of CG on the CSR of Islamic banks. Several previous studies focused on CG and CSR in Islamic banks with empirical and theoretical approaches. Through a systematic literature review (SLR), 20 papers published in the Scopus database from 1997 to 2021 on the relationship between CG and CSR in Islamic banks were selected for analysis. The findings revealed that most of the research on CG and CSR in Islamic banks uses a quantitative approach to measure the level of CSR disclosure in the banks and the impact of CG on CSR disclosure. In addition, some evidence concludes that aspects of CG, such as the Shari’ah supervisory board (SSB), board of directors (BODs), and audit committee, positively or negatively influence CSR disclosure in Islamic banks. This study suggests that research on CG and CSR in Islamic banks still requires development on variables aspects, issues, and analysis development using other research methods such as qualitative approaches.

The Effect of Corporate Social Responsibility on Company Value in Financial Sector Companies on the Indonesia Stock Exchange

Today's company competition in Indonesia is getting tighter and more competitive. The company is an organization that has a specific purpose in running its business, every company wants to be able to meet the welfare and interests of its members and shareholders. This activity is known as Social Responsibility. Corporate social responsibility (CSR) emerged as an idea, companies are no longer faced with responsibilities that are based on a single bottom line, namely the value of the company which is reflected in its financial condition only. But the company's responsibility must rest on the triple bottom line, where the bottom line apart from finance is also social and environmental, because financial conditions alone are not enough to guarantee the company's value grows in a sustainable manner. The purpose of this study was to identify the effect of corporate social responsibility (CSR) disclosure on firm value with financial performance as a moderating variable. Data collection is carried out with data documentation based on financial reports and sustainability reports. All banking companies listed on the Indonesia Stock Exchange (IDX) during the 2016-2020 period are considered as the population of this study. The sample was selected using purposive sampling method. The number of research samples is 36 companies. This study uses Microsoft Excel and software Eviews12 with panel data regression model to test the hypothesis. At the 5% significance level, the results of the study show that CSR has a positive effect on the value of banking companies listed on the BEI, while financial performance is unable to moderate the effect of corporate CSR on firm value. In other words, CSR in banking has an effect on increasing the value of banking companies listed on the IDX.

SOCIAL RESPONSIBILITY DISCLOSURE OF ISLAMIC BANKING IN SOUTHEAST ASIA BASED ON ISLAMIC SOCIAL REPORTING INDEX

The study aims to analyze how the disclosure of Corporate Social Responsibility (CSR) in Islamic banking in southeast Asia based on the Islamic Social Responsibility Index. This study uses secondary data obtained from the annual report of Islamic banking in Southeast Asia which has been published for the period of 2020. The method used in this study is content analysis of the annual reports of Islamic banking. The results of this study indicate that the disclosure of CSR in Islamic banking in Southeast Asia in general has made quite informative disclosed. The disclosure of CSR has not fully implemented the Islamic Social Reporting Index with AAOIFI standards. This is due to the large number of disclosures of social performance in Islamic banking which refers to the Global Reporting Index.

Does stakeholder pressure matter in Islamic banks’ corporate social responsibility and financial performance?

PurposeThis study aims to examine the impact of stakeholder pressure on Islamic banks’ corporate social responsibility (CSR) practices and financial performance.Design/methodology/approachA close-ended questionnaire was collected from 282 Islamic bank’s branch managers. Partial least square structural equation modeling was used to test the hypothesized model. Both measurement and structural models were found to be fit for this research.FindingsResults indicate that all components of stakeholder pressure (management, client, competitor, Sharia advisory board and community) have a significant positive impact on Islamic CSR. The findings of this study further revealed that Islamic CSR is a significant predictor of bank’s financial performance. Based on the present empirical results, this study suggests that Islamic bank managers should develop the best CSR practices to gain a competitive advantage and sustainable financial performance.Originality/valueOverall, this study contributes significantly to the Islamic bank CSR literature. However, to the best of the authors’ knowledge, few studies have been conducted to establish a link between firm performance and CSR in Islamic banks using a comprehensive model of stakeholder pressure.

Is corporate social responsibility constrained by bank credit resource allocation?

AbstractCredit rationing theory suggests that the impact of bank credit allocation on corporate social responsibility (CSR) has the dual effect of adverse selection and moral hazard. In this study, the impact of credit allocation on CSR and its mechanisms are explored in the context of credit rationing theory based on Chinese listed companies from 2010 to 2019. The results show that the impact of bank credit allocation on CSR exhibits an inverted U‐shaped correlation, and there is a critical point (17.9134) at which the increase in credit allocation will promote the level of CSR until the critical point is exceeded, after which the level of CSR will gradually decrease. Credit allocation can influence CSR through information asymmetry (stock price informativeness, analyst tracking) and managerial overconfidence, respectively. Companies with overconfident managers and low transparency in non‐socially responsible weighting systems are more likely to have an inverted U‐shaped relationship between bank credit allocation and CSR. This study provides new empirical evidence to understand the impact of credit allocation on CSR and expands the theory of credit rationing to a certain extent, thereby providing a reference for CSR maximization.

Corporate Social Responsibility in Banks in Turbulent Times and Particularities in Central and Eastern European Countries

ABSTRACT This study empirically analyzes how corporate social responsibility contributes to creating value in banks in turbulent times, offering a comparative analysis of Central and Eastern European countries. It examines the role of corporate social responsibility in the relationship between banks and shareholders, depositors, and customers. The results emphasize the effectiveness and limits of using corporate social responsibility to create value in relationships with stakeholders during the 2008 financial crisis. The effects of the different types of corporate socially responsible actions – social, environmental, or community-focused – are analyzed separately for banks with high social performance.

Clustering of banks by the level of digitalization in the context of the COVID-19 pandemic

The COVID-19 pandemic has complicated the operating environment for banks around the world. Determining the drivers of digitalization of banking services based on the principles of corporate social responsibility of banks makes it possible to find a way out of the crisis. The objective of the study is to develop a model for clustering banks in terms of the level of digitalization on the principles of corporate social responsibility.In this study, a twofold model has been proposed: the first part includes the calculation of the level of digitalization of banking, and the second part includes mathematical simulation of the clustering of bank digitalization level. This study reveals new possible solutions to the digitalization of banking in the face of new threats. In particular, factor analysis identifies the main factors, cluster analysis ranks banks into three categories (A, B, C) of service digitalization, and a dendrogram identifies digitalization drivers. The model was tested on 22 banks. Eight per cent of the banks are rated A “Very good” and B “Good”. 92% have Level C “Satisfactory”. The results of the study prove that the model should be validated. It should be confirmed that the application of the developed methodology for increasing the digitalization of banking services will increase customer loyalty by 15%, improve sustainability by reducing risk by 10%, and make banks attractive for investment by 15-20%.

THE EFFECT OF BANKING ZAKAT AND CORPORATE SOCIAL RESPONSIBILITY ON THE PROFITABILITY RATIO OF SHARIA COMMERCIAL BANKS IN INDONESIA

This research is supported by not fit the theory to fact. Based on data obtained from syariahcommercial banks in indonesia as much as the percentage of the charity bank 9, banking corporate socialresponsibility and return on assets in fluctuation, but the increase that happened to the charity banking andcorporate social responsibility is not always followed by increase return on assets. The study aimed to identifythe charity banking and corporate social responsibility to the ratio of profitability syariah commercial banksin indonesia 2013-2018 good on this fact and simultaneously. This research is quantitative research, the dataderived from secondary data with the data format + cross-section 2013-2018 years time series. Data analysistechniques in a regression panel estimate data, with the t and the f. as using software analyzed eviews 9. Theresult showed on this fact charity banks significant impact on return on assets syariah commercial banksin indonesia, corporate social responsibility on this fact no significant impact on return on assets syariahcommercial banks in indonesia. Simultaneous meanwhile zakat banking and corporate social responsibilityhaving significant influence to return on assets syariah commercial bank in indonesia the R2 of 0.633020 or63.30 percent and 36.70 percent affected by other variables that not discussed in this study.

РОЗВИТОК КОРПОРАТИВНОЇ СОЦІАЛЬНОЇ ВІДПОВІДАЛЬНОСТІ БАНКІВ В УКРАЇНІ В КОНТЕКСТІ СТАЛОГО РОЗВИТКУ

Banks are aware of the need to form such a management system that would be able not only to support their effectiveness in the short term, but also to ensure the stability and efficiency of its development in the long term. The article examines the activities of banks in the field of corporate social responsibility (CSR). CSR is considered not as separate programs of social and environmental direction, but as a tool for ensuring sustainable development. The purpose of the study is to generalize the directions of corporate social responsibility of banks in Ukraine, outline the best practices of CSR and identify the connection between their implementation and indicators of bank sustainability. To reach this aim the CSR of banks was divided into internal and external practices. It was determined that as of 2022, only three banks operating in Ukraine are participants in the Global Compact, and therefore have undertaken systematically work on the implementation of sustainable development goals. The indicators of the development of PJSC "PUMB" were analysed and it was established that the active position of the bank in the field of CSR is accompanied by the improvement of indicators of financial efficiency. Using the example of the largest Ukrainian banks, it is illustrated that activity in the field of CSR correlates with the growth of their reliability. Adherence to the principles of sustainable development is gradually becoming part of the banking strategies and corporate management of Ukrainian banks, which are increasingly actively implementing the concept of CSR. Formally measuring the benefits of CSR for banks in the short term is practically impossible and not advisable, since promoting sustainability is a "long game". An innovative tool that is used by banks in developed countries and should be used in Ukraine – loans linked to sustainable development (SLL) is presented. The number of employed migrants, the reduction of energy or water consumption by the company can be considered as an ESG benchmark. It is noted that the special role of CSR of banks will be manifested during the reconstruction of Ukraine after the war.

ISLAMIC BANK SUSTAINABILITY IN INDONESIA: VALUE AND FINANCIAL PERFORMANCES BASED ON SOCIAL RESPONSIBILITY AND GREEN FINANCE

This paper investigates the sustainability perspective of Islamic banks' financial decisions, performance, and corporate value where Corporate Social Responsibility (CSR) and green finance are moderation variables. The analysis method used multivariate statistical methods, structural equation modelling with the WarpPLS software program and testing panel data regression models using the E-Views software program. The datasets used involves 34 Islamic banks in Indonesia. This study found a significant relationship between CSR and green finance implementation to financial decisions, financial performance, and corporate value of Islamic banks in Indonesia. However, the relationship is heterogeneous or dissimilar across different quantiles. This means that CSR and green finance implementation only achieve short-term profit, not long-term sustainability. The study also reveals that corporate social responsibility contributes the most to Islamic banks' investment decisions and market value. Thus, policies focusing on integrated CSR in Islamic banking are required to improve sustainability opportunities.

Comparative analysis of customers’ awareness toward CSR practices of Islamic banks: Bahrain vs Saudi Arabia

PurposeThis study aims to analyze the level of customer awareness of Islamic Banks’ activities toward corporate social responsibility (CSR) in the Kingdoms of Bahrain and Saudi Arabia and test whether both groups have similarities or not. The outcome of this study determines the extent to which customer awareness regarding Islamic banking activities furthering the betterment of society and achieving socioeconomic goals beyond their financial objectives.Design/methodology/approachQuantitative methods are used in this study covering Islamic Banks in both the Kingdoms of Bahrain and Saudi Arabia; using a survey questionnaire distributed to a total of 150 customers in the Kingdom of Bahrain and 100 customers in the Kingdom of Saudi Arabia. The weighted means are calculated, and statistical tests are used, such as, Kruskal–Wallis H and independent sample tests, in analyzing the data.FindingsThe results of the survey reveal that the level of customer awareness is generally low in terms of the pursuit of corporate social responsibilities by the Islamic Banks. The significant statistical difference in the data gathered from the sample is highlighted when they are grouped according to their respective banks. It proves that the level of customer awareness varies considerably among the Islamic banks in the survey. It was also found that there is no significant difference between the two groups of Islamic banks’ customers in the two countries in terms of their awareness toward the CSR practices of the Islamic banks.Originality/valueThe findings of this study could be used to aid policymakers in the field of CSR of Islamic banks to formulate a more efficient set of CSR activities that are better aligned with the ultimate goal of achieving society’s betterment. This study may also facilitate Islamic banks in the region to set up strategies that highlight their CSR efforts and raise the awareness levels of their customers.

Peningkatan Kinerja Bank Syariah: Analisis Peran Corporate Social Responsibility dan Reputasi

This research aims to test the influence of corporate social responsibility (CSR) on the financial performance of Sharia banks, both directly and through reputation mediation. The data used consists of primary and secondary data. Primary data was obtained from questionnaires of 215 respondents, while secondary data was obtained from the 2018 annual report of seven sharia public banks. The analysis method used in this research is partial least square (PLS) using SmartPLS software version 2.0. The findings reveal that CSR has no effect on the performance of sharia banks, and reputation cannot mediate the relationship between the two. This result contributes literature on the relationship between CSR, reputation and performance of sharia banks, and can be used as a guideline for Sharia banks to continue to carry out CSR activities.

Comparative analysis of QISMUT+3’s Islamic corporate social responsibility

PurposeThe purpose of this study is to analyze the impact of corporate social responsibility (CSR) disclosure on the financial performance of Islamic banks across nine countries as major markets that contribute to international Islamic bank assets (Indonesia, Malaysia, Saudi Arabia, UAE, Kuwait, Qatar, Turkey, Bahrain and Pakistan or further will be called QISMUT + 3 countries).Design/methodology/approachIslamic Social Reporting Disclosure Index (ISRDI) is being used as a benchmark for Islamic bank CSR performance that contains a compilation of CSR standard items specified by the Accounting and Auditing Organization for Islamic Financial Institutions. The secondary data is collected from the respective bank’s annual reports and it used the regression analysis techniques for statistical testing.FindingsThis study found that CSR disclosure measured by ISRDI has a positive effect on financial performance. Almost all ISRDI sub-major categories have a positive effect on financial performance except the “environment” subcategory. The highest major subcategory for ISRDI is the “corporate governance” category (82%) and the “environment” category (13%) is the lowest. For the UAE, Kuwait and Turkey, the ISRDI is positively affected by financial performance and the other countries on this research are not.Originality/valueThis study highlighted the economic benefits of social responsibility practices as a part of business ethics in nine countries that uphold the value of religiosity. Thus, the development of the results of this research for subsequent research is very wide open.

CORPORATE SOCIAL RESPONSIBILITY IN BANKING SECTOR: A STUDY ON INDIAN BANKING SECTOR

CORPORATE SOCIAL RESPONSIBILITY IN BANKING SECTOR: A STUDY ON INDIAN BANKING SECTOR